JCIT (OSD)-Circle-4(2), New Delhi V. Beam Global Spirits & Wine (India) Private Limited, Gurgaon

ITA 1093/DEL/2020

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 6072 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 4 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Assessment Year: 2010-2011
• Appeal Filed On: 15-03-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Transfer pricing; International transaction; Tax effect

Judgement Text

1 ITA No. 1093/Del/2020 JCIT(OSD) Vs. Beam Global Spirits IN THE INCOME TAX APPELLATE TRIBUNAL [ DELHI BENCH: ‘I’ NEW DELHI ] BEFORE SHRI G. S. PANNU, PRESIDENT AND SHRI YOGESH KUMAR U.S., JUDICIAL MEMBER I.T.A. No. 1093/DEL/2020 (A.Y 2010-11) JCIT (OSD) Circle-4(2) Room No. 398D, C. R. Building, ITO, I.P Estate, New Delhi (APPELLANT) Vs. Beam Global Spirits & Wine (India) Pvt. Ltd. Building No. 10, Tower-C, 12 th Floor, DLF Cyber City, Phsae-2, Gurgaon, Haryana PAN No. AAACA1614R (RESPONDENT) ORDER PER YOGESH KUMAR US, JM The present appeal is preferred by the Revenue against the order dated 03/12/2019 passed by the Commissioner of Income Tax [Appeals]-42, New Delhi for the Assessment Year 2010-11. 2. The Revenue has raised the following grounds of appeal:- Assessee by : Mr. Rishabh Malhotra, AR Department by: Shri Vivek Verma, [CIT] – D.R.; Date of Hearing 04.07.2022 Date of Pronouncement 18.07.2022 2 ITA No. 1093/Del/2020 JCIT(OSD) Vs. Beam Global Spirits 1. Whether on the facts and in the circumstances of the case, whether the Ld. CIT(A) was correct in concluding that expenses incurred on advertisement, marketing and promotion (AMP) in promoting brand owned by the associated enterprise is not an international transaction as against the judgment of the Hon’ble Delhi High Court in the case of Sony Ericsson Mobiles Communications India Pvt. Ltd. vs CIT [(2015) 55Ttaxmann. Com 240] wherein the Hon’ble High court held that AMP expense is an international transaction. 192996490 2. Whether on the facts and in the circumstances of the case, whether the Ld. CIT(A) was correct in rejecting Bright Line Test (BLT) adopted by the TPO for ascertaining the amount of AMP expense incurred by the assessee for promoting brand owned by the associated enterprise without appreciating the fact that BLT was not used as a methoOd to determine the price but only as an economic tool to arrive at the cost of services rendered to foreign enterprises by the Indian entity and the TPO has the mandate to determine such cost as a primary step in ALP determination as provided under the Rules. 74,79,300/- 3. Whether on the facts and in the circumstances of the case, whether the Ld. CIT(A) was correct in rejecting Bright Line Test (BLT) adopted by the TPO at entity level for ascertaining the amount of AMP expense incurred by the assessee for promoting brand owned by the associated enterprise and directing to adopt TNMM with AMP intensity approach on segregated basis each for Manufacture and 3 ITA No. 1093/Del/2020 JCIT(OSD) Vs. Beam Global Spirits distribution segment. 2,71,167/- 4. The appellant craves leave for reserving the right to amend, modify, alter, add or forego any ground(s) of appeal at any time before or during the hearing of this appeal. Total Tax Effect Rs. 20,07,46,957/- 3. At the outset, the Ld. Counsel for the assessee submitted that, competent authorities of India & UK have agreed to resolve the issue of double taxation arising due to the TP Adjustments made by the Indian Tax Authority and pursuant to the agreement between competent authorities, the assessee has accepted the MAP Resolution. The Ld. Counsel for the assessee has produced the communication of Resolution of Dispute dated 17/07/2020 under MAP with the UK, issued by the Government of India, Ministry of Finance, Department of Revenue. The Ld. Counsel for the assessee further submitted that, under said Mutual Agreement Proceedings, complete relief has been granted to the assessee and adjustment made by the Ld. TPO on account of AMP Expenses has been reduced to NIL. Further, pursuant to the MAP Resolution, the Ld. TPO has passed an order giving effect to the MAP Resolution and reduced the adjustment of MAP expenses to NIL. Therefore, submitted that, the appeal filed by the Revenue Department has become infructuous and deserves to be dismissed. 4. The Ld. DR fairly conceded the submissions made by the Counsel for the assessee. 5. We have carefully considered the submissions made by the Ld. Counsel for the assessee, verified the MAP Resolution dated 17/07/2020 and the order of TPO dated 19/02/2020 giving effect to the MAP Resolution In view of the MAP Resolution, wherein the assessee has been granted with 4 ITA No. 1093/Del/2020 JCIT(OSD) Vs. Beam Global Spirits relief and an adjustment made by the TPO on account of AMP Expenses has been reduced NIL, the present Appeal has become infructuous. 6. In the result, the appeal filed by the Revenue is dismissed for having become infructuous. Order pronounced in the open court on 18 th th July, /2022. Sd/- Sd/- ( G. S. PANNU ) (YOGESH KUMAR U.S.) PRESIDENT JUDICIAL MEMBER Dated : 18/07/2022 *R.N* Copy forwarded to : 1. Appellant 2. Respondent 3. CIT 4. CIT (Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI