Johnson & Johnson Ltd., Gurgaon V. DCIT, New Delhi

ITA 381/DEL/2015

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 9241 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 11 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-12-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: I
• Assessment Year: 2010-2011
• Appeal Filed On: 19-01-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SANJAY I BARA
• Assessee Lawyers: NEHA GUPTA CAS
• Keywords: Capital asset; Business income; Depreciation; Transfer pricing; Business expenditure; Principle of natural justice; International transaction; Rule of consistency; Revenue expenditure
• Section: 143(3); 92B; 234B; 40(a)(ia); 37(1); 10B

Judgement Text

1 ITA NOS. 381 & 124/DEL/2015 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: I-1 NEW DELHI BEFORE SHRI N. K. BILLAIYA, ACCOUNTANT MEMBER AND MS SUCHITRA KAMBLE, JUDI CIAL MEMBER I.T.A. NO. 381/DEL/20 15 (A.Y 2009-10) JOHNSON & JOHNSON LTD. (ON BEHALF OF SYNTHES MEDICAL PVT. LTD. SINCE MERGED WITH JOHNSON & JOHNSON LTD.) PLOT NO. 118, SECTOR-44, INSTITUTIONAL AREA GURGAON AAACJ0866E (APPELLANT) VS DCIT CIRCLE-22(2) NEW DELHI. (RESPONDENT) ITA NO. 124/D EL/2015 (A.Y 2010-11) DCIT CIRCLE-11(1) C. R. BUILDING NEW DELHI. (APPELLANT) VS SYNTHES MEDICAL PVT. LTD. 207, ESSEL HOUSE, 10, ASAF ALI ROAD NEW DELHI AAACM3591K (RESPONDENT) APPELLANT BY SH. GAUTAM JAIN & PIYUSH KUMAR KAMAL, ADVS. SH. MUKESH GUPTA, & MS. NEHA GUPTA, CAS RESPONDENT BY SH. SANJAY. I. BARA, CIT-DR ORDER PER SUCHITRA KAMBLE, JM THESE TWO APPEALS ARE FILED BY THE ASSESSEE AND THE REVENUE AGAINST THE ORDER DATED 5/11/2014 PASSED BY DCIT, CIRCLE-7 (1), NEW DELHI U/S 143(3) READ WITH U/S 144C OF THE ACT FOR ASSESSMENT YEAR 2 010-11. DATE OF HEARING 18.10.2018 DATE OF PRONOUNCEMENT 21.12.2018 2 ITA NOS. 381 & 124/DEL/2015 2. THE GROUNDS OF APPEAL ARE AS UNDER:- I.T.A. NO. 381/DEL/2015 1. THAT THE LEARNED DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-7(1), NEW DELHI HAS ERRED BOTH IN LAW AND ON FACTS IN DETERMI NING THE INCOME OF THE APPELLANT AT RS. 35,96,36,200/- AS AGAINST RETURNED TOTAL INCOME OF RS. 20,04,81,143/- IN AN ORDER OF ASSESSMENT DATED 5.11 .2014 U/S 143(3) READ WITH SECTION 144C OF THE ACT IN PURSUANCE TO DIRECT IONS ISSUED BY LEARNED DISPUTE RESOLUTION PANEL-ILL, NEW DELHI (HEREINAFTE R REFERRED TO AS DRP) IN AN ORDER DATED 20.10.2014 U/S 144C(5) OF THE ACT. THE ADDITIONS MADE AGGREGATING TO RS. 15,91,55,055/- ARE HIGHLY UNJUST IFIED, ARBITRARY AND UNTENABLE. 2. THAT THE LEARNED DRP HAS COMMITTED GROSS ERRORS IN CONFIRMING THE ADJUSTMENT AGGREGATING TO RS. 7,88,19,769/- BY MECH ANICALLY CONFIRMING THE TRANSFER PRICING ADJUSTMENT PROPOSED BY THE LEARNED JOINT DIRECTOR OF INCOME TAX, TRANSFER PRICING OFFICER-II(2), NEW DELHI (HER EINAFTER REFERRED TO AS THE TPO) UNDER SECTION 92CA OF THE ACT. 2.1 THAT THE LEARNED TPO/AO/DRP HAS ERRED BOTH ON FACTS AND IN LAW IN HOLDING ADVERTISING, MARKETING AND PROMOTION (HE REINAFTER REFERRED TO AS AMP) EXPENDITURE AS A SEPARATE INTERNATIONAL TRAN SACTION UNDER SECTION 92B OF THE ACT, WITHOUT APPRECIATING THE FUNCTIONAL PRO FILE OF THE APPELLANT ACCORDING TO WHICH INCURRING OF AMP EXPENSES WAS PA RT OF THE APPELLANTS ROLES AND RESPONSIBILITIES AS A MANUFACTURER-CUM-DI STRIBUTOR AND THE APPELLANTS REMUNERATION WAS FIXED ACCORDINGLY. 2.2. THAT THE LEARNED TPO/AO/DRP HAS FAILED T O APPRECIATE THAT ACCORDING TO ITS COMPENSATION MODEL, THE APPELLANT WAS ALREADY REMUNERATED AT ARMS LENGTH IN RELATION TO ALL THE FUNCTIONS AN D RISKS UNDERTAKEN BY IT (INCLUDING AMP ACTIVITY) AND BENCHMARKING OF THE SA ME SEPARATELY AGAIN, HAS IN EFFECT, LED TO DOUBLE TAXATION 2.3. THAT THE LEARNED TPO/AO/DRP HAS FAILED TO APPR ECIATE THAT ONCE TRANSACTIONAL NET MARGIN METHOD (TNMM) HAS BEEN A CCEPTED AS THE MOST APPROPRIATE METHOD, THEN AN ANALYSIS OF THE INDIVID UAL ELEMENTS OF COST IS INCONSISTENT WITH THE TENENTS OF APPLICATION OF TNM M AS PER RULE 10B(L)(E) OF 3 ITA NOS. 381 & 124/DEL/2015 THE INCOME TAX RULES 1962 (HEREUNDER REFERRED TO AS RULES). 2.4. THAT THE CONCLUSION THAT THE AE, BEING THE LEG AL OWNER OF THE BRAND, SHOULD HAVE COMPENSATED THE ASSESSEE FOR ALLEGED EX CESSIVE AMP INCURRED AS THE AE DERIVES BENEFIT FROM SUCH EXPENSES THROUGH T HE CREATION OF MARKETING INTANGIBLE IS FACTUALLY AND LEGALLY MISCONCEIVED AN D THEREFORE UNSUSTAINABLE. 2.5 THAT THE LEARNED TPO/AO/DRP HAS OVERLOOKED THE CORROBORATIVE ANALYSIS USING RESALE PRICE METHOD UNDERTAKEN BY TH E ASSESSEE DURING THE TP ASSESSMENT PROCEEDINGS AND ALSO IGNORING THE FAC T THAT COMPARABLES OF SIMILAR FUNCTIONAL INTENSITY HAVE BEEN SELECTED. 2.6 THAT THE LEARNED TPO/AO/DRP HAS ERRED IN FAILIN G TO APPRECIATE THE INTERNATIONAL GUIDANCE IN RELATION TO THE MARKETIN G INTANGIBLES AND BRIGHT LINE TEST AS GIVEN IN OECD GUIDELINES AND OECD DIS CUSSION DRAFT ON INTANGIBLES AND AUSTRALIAN TAX OFFICER GUIDELINES I N CONTEXT OF A DISTRIBUTOR. 2.7 THAT THE LEARNED TPO/AO/DRP HAS FAILED TO APPRE CIATE THAT BRIGHT LINE TEST IS SIMPLY A COMPUTATIONAL TOOL AND NOT A METHOD PRESCRIBED UNDER THE ACT READ WITH THE INCOME TAX RULES, 1962 (THE RULES) AND HENCE THE ARITHMETIC MEAN OF THE AMP EXPENSES OF COMPARABLE C OMPANIES SHOULD NOT BE CONSIDERED FOR COMPUTING THE IMPUGNED TP ADJUSTMENT . 2.8 THAT THE LEARNED TPO/AO/DRP HAS FAILED TO APPRE CIATE THAT IN ABSENCE OF ANY CHANGE IN FACTS AND CIRCUMSTANCES IN THE YEAR UNDER CONSIDERATION, NO ADJUSTMENT WAS WARRANTED IN THE I NSTANT YEAR ON THE PRINCIPLE OF CONSISTENCY AS DURING THE EARLIER YEAR S IDENTICAL INTERNATIONAL TRANSACTIONS WERE FOUND TO BE AT ARMS LENGTH. 2.9 THAT THE LEARNED TPO/AO/DRP HAS FURTHER ERRED B OTH IN LAW AND ON FACTS IN A) INCORRECTLY COMPUTING THE AMP EXPENSES/SALES RA TIO OF THE ASSESSEE BY TAKING INTO ACCOUNT THE ITEMS LIKE SELLING COMMI SSION OF RS. 5,22,19,479/- SELLING EXPENSES OF RS. 2,34,35,961/- AND CONFERENCE & SEMINAR EXPENSES OF RS. 3,36,19,859/- WITHOUT APPRE CIATING THAT THESE EXPENSES HAVE BEEN INCURRED BY THE ASSESSEE CONSIDE RING THE NUANCES OF THE ORTHOPEDIC INDUSTRY; B) NOT TAKING COGNIZANCE OF THE RULING PRONOUNCED B Y THE HONBLE 4 ITA NOS. 381 & 124/DEL/2015 INCOME TAX APPELLATE TRIBUNAL (TAT), DELHI BENCH IN THE CASE OF DISTRIBUTOR NAMELY BMW INDIA (P) LTD. (BMW INDIA) FOR ASSESSMENT YEAR(AY) 2008-09 WHICH WAS SUBMITTED BEFORE THE TPO WHEREIN HONBLE ITAT HAD ADJUDGED THAT IF A DISTRIBUTOR IS SUFFICIE NTLY COMPENSATED BY THE AE THROUGH THE PRICING OF PRODUCTS, I.E. THROUGH HI GHER MARGINS, THE SAME WOULD HAVE CATERED TO EXTRA AMP EXPENSES SPENT BY T HE DISTRIBUTOR AS COMPARED TO THE COMPARABLES; ACCORDINGLY, NO SEPARA TE COMPENSATION IN THE FORM OF REIMBURSEMENT OF EXCESS AMP EXPENSES WA S REQUIRED FROM THE AES C) INCORRECTLY HOLDING THE AMP EXPENSES INCURRED BY THE ASSESSEE TO BE EXCESSIVE ON THE BASIS OF A BRIGHT LINE LIMIT A RRIVED AT BY THE DERIVING A ARBITRARY SET OF 4 COMPARABLES WITH THE PRE-CONCEIV ED APPROACH TO MAKE A CASE OF BRIGHT LINE FOR THE ASSESSEE D) ERRONEOUSLY APPLYING A MARK-UP OF 12.25% IN RES PECT OF ASSESSEES ALLEGED EXCESSIVE AMP EXPENSES AS PER TP ORDER. 3. THAT THE LEARNED DCIT/DRP HAS ERRED BOTH IN LAW AND ON FACTS IN MAKING A DISALLOWANCE OF A SUM OF RS. 4,54,56,549/- BY RES TRICTING THE CLAIM OF DEDUCTION IN RESPECT OF LOANER AND DEMO SETS AT RS. 2,68,48,473/- INSTEAD OF CLAIM OF RS. 7,23,05,022/- BY THE APPELLANT COMPANY . 3.1 THAT THE LEARNED DCIT/DRP HAS FAILED TO APPRECI ATE THAT LOANER AND DEMO SETS GIVEN TO HOSPITALS/DOCTORS ON RETURNABLE BASIS FOR USE OF PRODUCTS SOLD BY THE APPELLANT COMPANY ARE PART OF INVENTOR Y OF APPELLANT COMPANY HAVING AN ESTIMATED USEFUL LIFE OF THIRTY SIX MONTH S AND AS SUCH DEDUCTION CLAIMED WAS ALLOWABLE ON SUCH SETS IN ACCORDANCE WI TH ACCOUNTING STANDARD- 2 ISSUED BY THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA. 3.2. THAT FURTHER MORE THE FINDING THAT SUCH ASSETS ARE CAPITAL ASSETS ELIGIBLE FOR DEPRECIATION IS BASED ON FUNDAMENTAL M ISCONCEPTION OF FACTS AND PROVISIONS OF LAW AND HENCE OTHERWISE UNTENABLE. 3.3. THAT DISALLOWANCE MADE BY THE LEARNED DCIT/DR P IS OTHERWISE CONTRARY TO THE PRINCIPLE OF CONSISTENCY UPHELD BY THE APEX COURT IN THE CASE OF CIT VS. EXCEL INDUSTRIES LTD. REPORTED IN 395 IT R 295 MORE PARTICULARLY 5 ITA NOS. 381 & 124/DEL/2015 SINCE IDENTICAL CLAIM OF DEDUCTION HAD BEEN ALLOWED FROM ASSESSMENT YEARS 2002-03 TO 2006-07 IN ASSESSMENTS FRAMED U/S 143(3) OF THE ACT. 3.4. THAT IN ANY CASE THELEARNED DCIT/DRP HAS FAILE D TO APPRECIATE THAT EXPENDITURE CLAIMED WAS ELIGIBLE REVENUE EXPENDITUR E INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS AND AS SUCH ELIGIBLE FOR DEDUCTION U/S 37(1) OF THE ACT. 3.5. THAT WITHOUT PREJUDICETO THE AFORESAID AND IN THE ALTERNATIVE THE LEARNED DCIT/DRP OUGHT TO HAVE DIRECTED THAT DEPRECIATION B E ALLOWED THE CAPITALIZED VALUE OF ASSET IN THE SUCCEEDING YEARS. 4 THAT THE LEARNED DCIT/DRP HAS FURTHER ERRED BOT H IN LAW AND ON FACTS IN MAKING A DISALLOWANCE OF SUM OF RS. 12,58,878/- OUT OF EXPENDITURE INCURRED OF RS. 25,17,756/- UNDER THE H EAD ADVERTISEMENT AND SALES PROMOTIONAL EXPENSES INCURRED BY THE APPELLAN T COMPANY 4.1. THAT THE FINDING OF THE LEARNED DEPUTY COMMI SSIONER OF INCOME TAX THAT EXPENSES INCURRED BY THE ASSESSEE SEPARATELY UNDER VARIOUS HEADS WHICH ARE DIRECTLY RELATING TO THE IN CREASE IN SALE OF THE ASSESSEE AND ENHANCING ITS PROFITABILITY, THE EXPEN SES INCURRED ON ADVERTISEMENT AND SALES PROMOTION AMOUNTING TO RS. 25,17,756/- ARE BEING AMORTIZED OVER A PERIOD OF TWO YEARS AND HENCE ONLY 1/2 OF THE EXPENDITURE SHALL BE ALLOWED IN THIS YEAR IS FACTUALLY INCORRE CT, LEGALLY UNTENABLE AND HENCE UNSUSTAINABLE. 4.2 THAT EACH OF THE BASIS STATED BY THE LEARNED DC IT/DRP TO MAKE THE DISALLOWANCE OF ELIGIBLE BUSINESS EXPENDITURE INCUR RED AND CLAIMED BY THE APPELLANT IS WHOLLY MISCONCEIVED, MISPLACED AND ALS O CONTRARY TO THE ORDERS IN PRECEDING YEARS. 5. THAT THE LEARNED DCIT/DRP HAS ERRED BOTH IN LAW AND ON FACTS IN MAKING A DISALLOWANCE OF RS. 3,36,19,859/- REPRESENTING EX PENDITURE INCURRED UNDER THE HEAD SEMINAR AND CONFERENCES BY THE APPELLANT COMPANY BY INVOKING SECTION 40(A)(IA) OF THE ACT. 5.1 THAT THE LEARNED DCIT/DRP HAS FAILED TO APPRECI ATE THAT SUCH EXPENDITURE WAS INCURRED TOWARDS CONVENTIONS, EDUCA TION SUPPORT, OPR 6 ITA NOS. 381 & 124/DEL/2015 COURSES AND SYMPOSIUM EXPENSES IN THE NATURE OF SEM INAR AND CONFERENCE (BOTH IN INDIA AND OVERSEAS) WHOLLY AND EXCLUSIVELY FOR THE BUSINESS OF THE ASSESSEE COMPANY 5.2 THAT THE FINDING OF THE LEARNED DCIT/DRP THAT A PPELLANT WAS OBLIGED TO DEDUCT TDS U/S 194H OF THE ACT ON SUCH P AYMENTS SINCE SUM INCURRED WERE INDIRECT FORM OF COMMISSION/INCENTIVE S FOR INCREASING SALE OF PRODUCTS IS FACTUALLY AND LEGALLY MISCONCEIVED AND THEREFORE UNSUSTAINABLE. 5.3. THAT THE LEARNED DCIT/DRP HAS FAILED TO APPR ECIATE THAT SUCH EXPENDITURE WAS INCURRED TOWARDS CONVENTIONS, EDUCA TION SUPPORT, OPR COURSES AND SYMPOSIUM EXPENSES IN THE NATURE OF SEM INAR AND CONFERENCE (BOTH IN INDIA AND OVERSEAS) DOES NOT FALL IN THE S COPE OF PROHIBITIONS COVERED BY INDIAN MEDICAL COUNCIL UNDER PROFESSIONAL CONDUC T ETIQUETTE & ETHICS REGULATION 2002 OR CBDT CIRCULAR 5/2012 AS SUCH FAC TUALLY AND LEGALLY MISCONCEIVED AND THEREFORE UNSUSTAINABLE. 6. THAT THE LEARNED DCIT HAS FURTHER ERRED BOTH IN LAW AND ON FACTS IN LEVYING INTEREST UNDER SECTION 234B OF THE ACT AND UNDER SECTION 234D OF THE ACT WHICH ARE NOT LEVIABLE ON THE FACTS OF THE INST ANT CASE. IT IS THEREFORE PRAYED THAT, ADJUSTMENTS AND DISALL OWANCES MADE BY THE LEARNED TPO/DCIT/DRP ALONG WITH INTEREST LEVIED IN THE IMPUGNED ORDER OF ASSESSMENT U/S 143(3)/144C OF THE ACT BE DELETED AN D, APPEAL OF THE APPELLANT COMPANY BE ALLOWED. ITA NO. 124/DEL/2015 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE HONBLE DRP-III ERRED IN LAW AND ON FACTS IN DELETING THE ADDITIONS TO RS .41,07,645/- ON ACCOUNT OF RECRUITMENT AND TRAINING EXPENSES MADE BY THE A.O I N THE DRAFT ASSESSMENT ORDER. 3. THE SYNTHES GROUP IS ONE OF THE WORLD'S LEADING MEDICAL DEVICE GROUP, SPECIALIZING IN THE DEVELOPMENT, PRODUCTION MARKETI NG AND SALE OF INSTRUMENT, IMPLANTS AND BIOMATERIALS FOR THE SURGICAL FIXATION , CORRECTION AND REGENERATION 7 ITA NOS. 381 & 124/DEL/2015 OF THE HUMAN SKELETON AND ITS SOFT TISSUES. SYNTHES MEDICAL PVT. LTD. IS A SUBSIDIARY OF SYNTHES HOLDING AG, SWITZERLAND AND H AS BEEN OPERATING IN INDIA SINCE 1992 AND IS PRIMARILY ENGAGED IN THE SALES DI STRIBUTION AND MARKETING IN INDIA OF MEDICAL IMPLANTS IN THE AREA OF ORTHOPEDIC TRAUMA & SPINE, TOOLS AND EQUIPMENT IMPORTED FROM OTHER GROUP COMPANY. A DRAF T ASSESSMENT ORDER U/S. 144C DATED 24/02/2014 WAS PASSED AND SENT TO ASSESSEE BY SPEED POST ON 26/02/2014. THE ASSESSEE PREFERRED OBJECTIONS BE FORE THE DISPUTE RESOLUTION PANEL-ILL, NEW DELHI. THE DIRECTIONS OF THE DISPUTE RESOLUTION PENAL U/S. 144C(5) OF THE INCOME TAX ACT 1961 PASSED VIDE ORDER DATED 20/10/2014 WERE RECEIVED IN THIS OFFICE ON 05/11/2014. THE FIN AL ASSESSMENT ORDER IS ACCORDINGLY PASSED AFTER INCORPORATING THE DIRECTIO NS OF THE DISPUTE RESOLUTION PANEL. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE CASE WAS REFERRED TO TPO U/S 92CA FOR COMPUTATION OF ARMS LENGTH PRICE W ITH PRIOR APPROVAL OF CIT-3 DELHI. AS PER ORDER OF TPO PASSED U/S 92CA O F THE ACT AND ADDITION OF RS.7,88,19,769/- WAS MADE ON ACCOUNT OF TRANSFER PR ICING ADJUSTMENT. THUS, THE ASSESSING OFFICER MADE AN ADDITION OF RS.7,88,1 9,769/- TOWARDS TRANSFER PRICING ISSUES. THE ASSESSING OFFICER ALSO MADE AD DITION TOWARDS CORPORATE ISSUES. THUS, THE ASSESSING OFFICER MADE DISALLOWA NCE ON ACCOUNT OF AMORTIZATION OF LOANERS SETS AMOUNTING TO RS.4,54,5 6,549/-. THE ASSESSING OFFICER ALSO MADE DISALLOWANCE OF ADVERTISEMENT AND SALE PROMOTIONS FOR RS. 12,58,878/- AS WELL AS DISALLOWANCE OF CONFERENCE E XPENSE OF RS.3,36,19,859/-. 5. AGGRIEVED BY THE ASSESSMENT ORDER, THE REVENUE A S WELL AS THE ASSESSEE ARE BEFORE US. 6. THE LD. AR SUBMITTED THAT AS REGARDS GROUND NO. 2 TO 2.9, THE SAME IS RELATING TO TRANSFER PRICE ADJUSTMENT OF RS. 7,88,1 9,769/- ON ACCOUNT OF ADVERTISING, MARKETING & PROMOTION. THE LD. AR SUB MITTED THAT AMP 8 ITA NOS. 381 & 124/DEL/2015 EXPENDITURE IS NOT A SEPARATE INTERNATIONAL TRANSAC TION U/S 92B OF THE ACT. AMP EXPENDITURE WAS INCURRED BY THE ASSESSEE WITH S OLE OBJECTIVE OF CREATING A TECHNICAL SALES SPOT AND THEREBY INCREASING AWARENE SS ABOUT USAGE AND CHARACTERISTICS OF THE PRODUCTS DISTRIBUTED BY THE ASSESSEE, THEREFORE, SUCH EXPENSES WERE PART OF ROLLING AND RESPONSIBILITIES OF THE ASSESSEE AS DISTRIBUTOR. THE LD. AR FURTHER SUBMITTED THAT EXPENSES, THEREFO RE, INCURRED BY THE ASSESSEE WITH SOLE PURPOSE OF INCREASING ITS SALES AND NONE OF THE EXPENDITURE WAS INCURRED BY THE ASSESSEE TO PROMOTE BRAND OF IT S AES. FURTHERMORE, THEIR EXIST A DISTINCTION BETWEEN A FUNCTION AND TRANSACT ION, EVERY EXPENDITURE FORMING PART OF FUNCTION CANNOT BE CONSTITUTED AS T RANSACTION. THE LD. AR RELIED UPON THE FOLLOWING DECISIONS:- (I) MARUTI SUZUKI LTD. VS. CIT 381 ITR 117 (DEL) (II) BAUSH & LOMB EYECARE (INDIA) (P) LTD. VS. ADDL . CIT 381 ITR 227 (DEL) (III)CIT VS. WHIRLPOOL OF INDIA LTD.381 ITR 154 (DE L) (IV) TOSHIBA INDIA (P) LTD. VS. DCIT ITA NO. 944/D/ 2016 (V) HYUNDAI MOTORS INDIA LTD. VS. DCIT 187 TTJ 97 ( CHENNAI) (VI) INDIA MEDTRONIC (P) LTD. VS. DCIT ITA NO. 1246 /M/2016 7. THE LD. AR FURTHER SUBMITTED THAT BLT CANNOT BE USED TO FIND OUT VALUE OF INTERNATIONAL TRANSACTION TO DETERMINE ALP OF AM P EXPENSES. THE LD. AR SUBMITTED THAT WITHOUT PREJUDICE TO THIS, EVEN IF A MP EXPENDITURE IS HELD TO BE A SEPARATE INTERNATIONAL TRANSACTION; ALP OF THE SA ME IS LIABLE TO BE DETERMINE AS PER THE SIX METHODS EXPLICITLY PROVIDED IN RULE 10B OF THE RULES, WHERE BLT IS NOT METHOD SPECIFIED UNDER RULE 10B OF RULES FOR DETERMINATION OF ALP. THE LD. AR FURTHER SUBMITTED THAT INDIAS POSITION IN U NITED NATION PRACTICAL MANUAL ON TP FOR DEVELOPING COUNTRIES (2017) DOES N OT MENTION BLT AS A METHOD TO DETERMINE ARMS LENGTH COMPENSATION FOR F UNCTIONS PERFORMED, ASSETS USED AND RISK ASSUMED BY INDIAN ENTITY. THE LD. AR RELIED UPON THE FOLLOWING DECISIONS:- I) SONY ERICSSON MOBILE COMMUNICATIONS (P) LTD. VS. CIT 374 ITR 118 (DEL) II) HONDA SIEL PRODUCTS LTD VS. DCIT 283 CTR 322 (D EL) 9 ITA NOS. 381 & 124/DEL/2015 III) DIAGEO INDIA (P) LTD. VS. DY CIT ITA NO. 7545/ M/2012 IV) NIVEA INDIA (P) LTD. VS. ACIT 92 TAXMANN.COM 16 5 (MUM) V) FUJI FILM CORPORATION VS. ITO 92 TAXMANN.COM 411 (DEL) 8. THE LD. AR FURTHER SUBMITTED THAT INCLUSION OF S ELLING COMMISSION, SELLING EXPENSES AND CONFERENCE EXPENSES UNDER ADVE RTISING & PROMOTION EXPENSES ARE PURELY LINKED TO SALES AND ARE NOT IN NATURE OF ADVERTISEMENT & PROMOTION ACTIVITIES. THE ASSESSEE IS ENGAGED IN S ALE OF TECHNOLOGY RELATED PRODUCTS, WERE ITS PRIMARY CUSTOMERS AND DOCTORS WH O ARE NOT INFLUENCE BY BRAND PRODUCTS, BUT RATHER BY UTILITY OF THE PRODUC TS. THEREFORE, IN ORDER TO MAKE THE DOCTORS AWARE ABOUT THE PRODUCTS, COMPANY PRODUCTS IN HOUSE REMUNERATION, WORKSHOPS AND CONFERENCE. THE EXPENS ES INCURRED ON SUCH CONFERENCE AND REMUNERATIONS DO NOT HAVE ANY PURPOR TED NEXUS WITH ADVERTISING AND BRAND PROMOTION ACTIVITIES, THEY WE RE INCURRED SOLELY FOR THE PURPOSE OF INCREASING SALE OF THE ASSESSEE. THE SEL LING COMMISSION AND SELLING EXPENSES ARE PURELY LINKED TO SALES AND ARE NOT IN NATURE OF ADVERTISEMENT AND PROMOTION ACTIVITIES. THE LD. AR RELIED UPON THE F OLLOWING DECISIONS:- I) FUJI FILM CORPORATION VS. ITO 92 TAXMANN.COM 411 (DEL) II) DCIT VS. M/S MARY KAY COSMETIC (P) LTD ITA NO. 4882/D/2014 III) DAIKIN AIR-CONDITIONING INDIA (P) LTD. VS. DCI T 92 TAXMANN.COM 112 (DEL) IV) PERFETTI VAN MELLE INDIA (P) LTD. VS. DCIT 166 ITR 229 (DEL) V) PANASONIC CONSUMER INDIA (P) LTD. VS. DCIT 61 TA XMANN.COM 336 (DEL) VI) HAIER APPLIANCES INDIA (P) LTD. VS. DY. CIT 65 TAXMANN.COM 74 (DEL) VII) CANON INDIA (P) LTD. VS. DCIT ITA NO. 4602/D/2 010 9. THE LD. AR FURTHER SUBMITTED THAT SELLING COMMIS SION AND SELLING EXPENSES HAVE BEEN EXCLUDED FROM AMP EXPENSES IN CA SE OF THE ASSESSEE IN PREVIOUS YEARS AND SUBSEQUENT YEARS WHICH WAS CONSI DERED BY THE TRIBUNAL FOR ASSESSMENT YEAR 2009-10 AND 2011-12 IN FAVOUR OF TH E ASSESSEE. THE LD. AR RELIED UPON THE FOLLOWING DECISIONS IN RESPECT OF P RINCIPLE OF CONSISTENCY. 10 ITA NOS. 381 & 124/DEL/2015 I) CIT VS. EXCEL INDUSTRIES 358 ITR 295 (SC) II) RADHASOAMI SATSANG SAOMI BAGH V. CIT 193 ITR 321 (S C) III) CIT VS. M/S. MALIBU ESTATE P. LTD. ITA 213/2015 & C M NO.4961/2015 (DEL) 10. THE LD. AR FURTHER SUBMITTED THAT THE DELHI TRI BUNAL IN THE ASSESSEES OWN CASE IN ITA NO. 1855/DEL/2014 FOR ASSESSMENT YE AR 2009-10 DECIDED THE ISSUE OF INCLUSION OF SELLING EXPENSES & SELLING CO MMISSION UNDER AMP EXPENSES IN FAVOUR OF THE ASSESSEE. 11. THE LD. AR FURTHER SUBMITTED THAT POSITION AFTE R EXCLUSION OF SELLING COMMISSION, OTHER SELLING EXPENSES AND CONFERENCE A ND SEMINAR EXPENSES FROM AMP EXPENSES:- SR. NO. PARTICULARS AMOUNT (RS.) I) TOTAL SALES 99,93,98,992 II) ARMS LENGTH LEVEL OF AMP (% OF SALES) - TPO 4.1 6% III) ALP OF AMP BY TPO 4,15,74,998 IV) AMOUNT ACTUALLY SPENT ON AMP EXP ADVERTISEMENT EXPENSES 25,17,756 V) AMOUNT SPENT IN EXCESS OF BRIGHT LINE ON CREATION OF MARKETING INTANGIBLES - VI) MARK UP @ 12.25% - VII) ADJUSTMENT - THE LD. AR SUBMITTED THAT EVEN OTHERWISE, ASSESSEE SATISFIES THE BRIGHT LINE TEST RELIED BY THE TPO AS AMP EXPENSES INCURRED BY ASSESSEE COMPANY AS A PROPORTION OF NET SALES ARE LESS THAT ALP OF AMP CO MPUTED BY THE TPO, THEREBY WARRANTING NO ADJUSTMENT ON ACCOUNT OF AMP EXPENSES . THE LD. AR FURTHER SUBMITTED THAT THE ASSESSEE WAS ALREADY REMUNERATED AT ALP IN RELATION TO ALL FUNCTIONS AND RISKS UNDERTAKEN BY IT. THERE WAS NO BRAND PROMOTION ACTIVITY CARRIED OUT IN ABSENCE OF WHICH THERE WAS NO REQUIR EMENT TO ADDITIONALLY COMPENSATE APPELLANT COMPANY AS SELLING EXPENSES AN D SALES COMMISSION WERE 11 ITA NOS. 381 & 124/DEL/2015 PAID TO CONSIGNMENT AGENTS AND DEALERS IN CONNECTIO N WITH THE SALES MADE BY THEM. THE LD. AR EMPHASIZED THAT ASSESSEE AND ITS A ES HAVE NOT ENTERED INTO ANY CONTRACT FOR BRAND BUILDING SERVICES, THUS AE CANNOT BE SAID TO HAVE BENEFITED AT THE EXPENSE OF ASSESSEE. THE LD. AR RE LIED UPON THE FOLLOWING JUDICIAL PRONOUNCEMENTS I. LOREAL INDIA (P) LTD VS. DCIT 49 ITR (T) 473). II. MONDELEZ INDIA FOODS (P) LTD VS. CIT ITA NO 547 0/M/2012 III. DIEAGO INDIA (P) LTD VS. DCIT ITA NO 7545/M/20 12 IV. DY CIT VS. MATTEL TOYS (INDIA) (P) LTD 183 TTJ 81 (MUM) V. THOMAS COOK VS. DCIT 49 ITR (T) 178 (MUM) VI. HEINZ INDIA (P) LTD VS. ACIT ITA NO 7732/M/2012 VII. NIVEA INDIA (P) LTD VS. ACIT ITA NO 7744/M/2012 DAT ED 21.3.2018 12. THE LD. DR RELIED UPON THE ORDER OF THE TPO AND ASSESSMENT ORDER. 13. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THIS ISSUE IS ALREADY DECIDED IN ASSESSEES OWN CASE BY THE TRIBUNAL FOR A.Y. 2009-10. THE TRIBUNAL HELD AS UNDER: 25. HONBLE JURISDICTIONAL HIGH COURT IN THE CASE MARUTI SUZUKI LTD. (SUPRA) HELD THAT WHEN THERE BEING NO INTERNATIONAL TRANSACTION IN AMP SPEND WITH AN ASCERTAINABLE PRICE, NEITHER SUBSTANTIVE NO R MACHINERY PROVISION OF CHAPTER X WERE APPLICABLE TO TRANSFER PRICING ADJ USTMENT EXERCISE. IN BAUSCH & LAMB EYECARE (INDIA) (P) LTD. (SUPRA), HON BLE JURISDICTIONAL HIGH COURT HELD THAT IN THE ABSENCE OF AN INTERNATIONAL TRANSACTION INVOLVING AMP EXPENSES BETWEEN ASSESSEE AND ITS AE, ADDITION IS N OT SUSTAINABLE. SIMILARLY, IN WHIRLPOOL OF INDIA LTD. (SUPRA) CASE ALSO, HONB LE COURT HELD THAT MERELY BECAUSE THERE IS AN INCIDENTAL BENEFIT TO AE, IT CA NNOT BE SAID THAT AMP EXPENSES INCURRED BY THE INDIAN ENTITY ARE FOR PROM OTING BRAND OF ITS AE. 26. IN THE INSTANT CASE, THE REVENUE HAS NOT BROUGH T ON RECORD ANY MATERIAL THAT BRAND LOYALTY HAS BEEN GENERATED BY MAKING PAY MENT ON ACCOUNT OF SELLING COMMISSION AND SELLING EXPENSES BY THE ASSESSEE COMPANY. FURTHERMORE, THE ASSESSEE HAS MADE PAYMENT UNDER AM P HEAD TO ITS INDEPENDENT PARTIES FOR PROMOTION OF ITS OWN BUSINE SS WHICH EXCLUDES THIS TRANSACTION FROM THE DEFINITION OF INTERNATIONAL TR ANSACTION PARTICULARLY IN THE FACE OF THE FACT THAT THERE IS NO AGREEMENT BETWEEN THE ASSESSEE AND ITS AE 12 ITA NOS. 381 & 124/DEL/2015 FOR SHARING AMP EXPENSES. WHEN WE EXAMINE ALL THESE FACTS IN THE LIGHT OF THE FACT THAT NO SUCH ADJUSTMENT HAS BEEN MADE BY THE R EVENUE IN EARLIER YEARS, THE DETAILS OF WHICH IS GIVEN IN TABULATED FORM BY THE ASSESSEE IN ITS SYNOPSIS AS HEREUNDER :- AY TOTAL TURNOVER (RS. LACS) EXPENDITURE IN NATURE OF AMP INCURRED CLAIMED RS. LACS) ADJUSTMENT IN ALP FOR AMPO EXPENSES BY TPO/AO (RS. LACS) ASSESSMENT U/S REMARKS 2003-04 2,164.22 YES NIL 143(3) NA 2004-05 2,101.04 YES NIL 143(3) NA 2005-06 2,557.92 YES NIL 143(3) NA 2006-07 3,186.01 YES NIL 143(3) NA 2007-08 4,204.15 YES NIL 143(3) NA 2008-09 5,204.54 YES NIL 143(3) NA 2009-10 7,646.64 YES 628.01 143(3) DISPUTED IN APPEAL THIS ADJUSTMENT MADE BY TPO IN NOT SUSTAINABLE IN T HE EYES OF LAW. 27. SO, IN THE GIVEN CIRCUMSTANCES, WE ARE OF THE C ONSIDERED VIEW THAT ADDITION MADE BY TPO/AO/DRP BY WRONGLY COMPUTING AM P EXPENSES BY INCLUDING SELLING COMMISSION OF RS 4,99,32,478/- AN D SELLING EXPENSES OF RS. 1,47,72,866/- AS PART OF TOTAL TURNOVER DURING THE YEAR UNDER ASSESSMENT IS NOT SUSTAINABLE IN THE EYES OF THE LAW. SO, GROUNDS NO. 2,2.1, 2.2, 2.3 2.4, 2.5, 2.6, 2.7, 2.8, 3.0 & 3.1 ARE DETERMINED IN FAV OUR OF THE ASSESSEE AND THE TPO/AO ARE DIRECTED TO BENCHMARK THE INTERNATIONAL TRANSACTIONS IN THE LIGHT OF THE FINDINGS RETURNED HEREIN ABOVE. THE FACTUAL ASPECT HAS NOT BEEN DISTINGUISHED BY TH E LD. DR IN THE PRESENT ASSESSMENT YEAR WHICH IS BEFORE US. THUS, THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNALS DECISION I N ASSESSEES OWN CASE FOR A.Y. 2009-10. THEREFORE, GROUND NO. 2 TO 2.9 ARE ALLOWED . 14. AS REGARDS GROUND NO. 3 TO 3.5 RELATING TO DISA LLOWANCE BY RESTRICTING THE CLAIM OF DEDUCTION ON AMORTIZATION OF LOANER AND DE MO SETS AT RS. 2,68,48,473/- OUT OF CLAIM OF RS. 7,23,05,022/-, TH E LD. AR SUBMITTED THAT THIS ISSUE IS ALSO COVERED BY THE ORDER OF TRIBUNAL FOR ASSESSMENT YEARS 2007-08 13 ITA NOS. 381 & 124/DEL/2015 (ITA NO. 6005/D/2013) AND ASSESSMENT YEARS 2008-09 (ITA NO. 6006/D/2013 AS WELL AS ASSESSMENT YEARS 2009-10 (ITA NO. 1855/D /2014 AND 979/DEL/2014). 15. THE LD. DR RELIED UPON THE ORDER OF THE TPO AND ASSESSMENT ORDER. 16. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE TRIBUNAL IN A.Y. 2009-10 HELD AS UNDER: 32. FOLLOWING THE DECISION RENDERED BY THE COORDIN ATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR AYS 2007-08 AND 2008-09 (SUPRA) AND BY FOLLOWING THE RULE OF CONSISTENCY, WHEN THERE IS NO CHANGE IN THE FACTS AND CIRCUMSTANCES, WE ARE OF THE CONSIDERED VIEW THAT D ISALLOWANCE OF AN AMOUNT OF RS. 2,98,34,660/- MADE BY THE AO IS NOT SUSTAINA BLE, HENCE DISALLOWANCE OF RS. 2,98,34,660/- IS ORDERED TO BE DELETED. CONS EQUENTLY, GROUNDS NO. 4, 4.1, 4.2, 4.3, 5 & 6 ARE DETERMINED IN FAVOUR OF TH E ASSESSEE. THE LD. DR COULD NOT DISTINGUISH THE FACTUAL ASPECT IN THE PRESENT ASSESSMENT YEAR AND THAT OF THE EARLIER ASSESSMENT YEARS. THER EFORE, THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE. GROUND NOS. 3 TO 3.5 ARE ALLOWED. 17. AS REGARDS GROUND NO. 4 TO 4.2, RELATING TO PAR T DISALLOWANCE OUT OF TOTAL EXPENDITURE OF RS. 25,17,756/- INCURRED UNDER THE H EAD ADVERTISEMENT AND SALES PROMOTIONAL EXPENSES, THE LD. AR SUBMITTED TH AT THIS ISSUE IS COVERED BY THE ORDER OF TRIBUNAL IN ASSESSEES OWN CASE IN ASS ESSMENT YEARS 2007-08 (ITA NO. 6005/D/2013) AND ASSESSMENT YEARS 2008-09 (ITA NO. 6006/D/2013) AS WELL AS IN ASSESSMENT YEARS 2009-10 (ITA NO. 1855/D/2014 AND 979/D/2014) 18. THE LD. DR RELIED UPON THE ORDER OF THE TPO AND ASSESSMENT ORDER. 19. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE TRIBUNAL IN A.Y. 2009-10 HELD AS UNDER: 36. IN THE FACE OF THE FACT THAT THE REVENUE HAS N OT DISPUTED THE EXPENSES INCURRED ON ADVERTISEMENT AND SALES PROMOT ION, WHICH ARE REVENUE 14 ITA NOS. 381 & 124/DEL/2015 IN NATURE, THE SAME CANNOT BE DEFERRED AS HAS ALREA DY BEEN HELD BY HONBLE APEX COURT IN THE CASE OF TAPARIA TOOLS LTD. VS. JC IT - 372 ITR 605 (SC). IN THE JUDGMENT IN TAPARIA TOOLS LTD. (SUPRA), IT IS H ELD BY THE HONBLE APEX COURT THAT THERE IS NO CONCEPT OF DEFERRED REVENUE EXPENDITURE WHICH CAN ONLY BE DEFERRED AT THE INSTANCE OF THE ASSESSEE. BARE P ERUSAL OF THE FINDINGS RETURNED BY AO AS WELL AS DRP DISALLOWING THE 50% O F THE EXPENDITURE INCURRED BY THE ASSESSEE ON ADVERTISEMENT AND PROMO TIONAL EXPENSES GO TO PROVE THAT THE SAME HAD BEEN MADE ON THE BASIS OF C ONJECTURE AND SURMISES. WHEN GENUINENESS OF THE EXPENDITURE INCURRED BY THE ASSESSEE IN THE COURSE OF ITS BUSINESS HAS NOT BEEN DISPUTED, THE ADDITION MADE ON ACCOUNT OF DISALLOWANCE OF EXPENSES IS NOT SUSTAINABLE. MOREOV ER, WHEN THE REVENUE HAS CONSISTENTLY ACCEPTED THE GENUINENESS OF THE EX PENDITURE IN QUESTION AS REVENUE EXPENDITURE IN THE PRECEDING YEARS IN THE S IMILAR SET OF FACTS AND CIRCUMSTANCES, THE DISALLOWANCE DURING THE YEAR UND ER ASSESSMENT IS WHOLLY UNTENABLE, HENCE DISALLOWANCE MADE BY THE AO TO THE TUNE OF RS. 6,16,568/- IS ORDERED TO BE DELETED. CONSEQUENTLY, GROUNDS NO. 7, 7.1 & 7.2 OF ITA NO. 1855/DEL/2014 ARE DETERMINED IN FAVOUR OF THE ASSES SEE AND GROUND NO. 2 OF ITA NO. 979/DEL/2014 IS DETERMINED AGAINST THE R EVENUE. THE LD. DR COULD NOT DISTINGUISH THE FACTUAL ASPECT IN THE PRESENT ASSESSMENT YEAR AND THAT OF THE EARLIER ASSESSMENT YEARS. THER EFORE, THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE. GROUND NOS. 4 TO 4.2 ARE ALLOWED. 20. AS REGARDS GROUND NO. 5 TO 5.3, RELATING TO DIS ALLOWANCE OF EXPENDITURE INCURRED UNDER THE HEAD SEMINAR AND CONFERENCE BY I NVOKING SECTION 40(A)(IA) OF THE ACT, THE LD. AR SUBMITTED THAT THIS ISSUE WA S REMANDED BACK TO THE ASSESSING OFFICER FOR EXAMINATION OF NATURE OF SEMI NAR IN ASSESSMENT YEAR 2009-10 (ITA NO. 1855/D/2014 AND 979/D/2014). THE L D. AR REQUESTED THAT IN THE PRESENT YEAR AS WELL THE ISSUE NEEDS TO BE E XAMINED, THEREFORE, BE REMANDED BACK TO THE FILE OF THE ASSESSING OFFICER. 21. THE LD. DR RELIED UPON THE ASSESSMENT ORDER. 22. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE TRIBUNAL IN A.Y. 2009-10 HELD AS UNDER: 15 ITA NOS. 381 & 124/DEL/2015 43. IDENTICAL ISSUE WAS DEALT WITH BY THE COORDINA TE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE IN AY 2008-09. AO A T PAGE 16 OF HIS ORDER OBSERVED THAT, EVEN IF THE ASSESSEE CONTENDS THAT MEETING OF CONFERENCE EXPENSES WAS JUST TO INCREASE THE KNOWLEDGE OF DOCT ORS ABOUT LATEST PRODUCT, THAN IT IS ALSO IMPORTANT TO JUSTIFY AS HOW THE EXP ENSE IS CLAIMED AS EXPENSE UNDER SECTION 37(1) OF THE IT ACT. 44. AO HAS NOT CALLED UPON ANY DETAIL OF THE EXPENS ES FROM THE ASSESSEE NOR HAS BROUGHT ON RECORD CURRICULUM OF THE SEMINAR AND CONFERENCES TO WORK OUT IF EXPENSES ARE COVERED U/S 37(1)OF THE ACT. AS SESSEE HIMSELF HAS NOT OFFERED TO BRING ON RECORD THE COMPLETE FACTS. EVEN LD. DRP HAS FOLLOWED THE ORDER PASSED BY THE CIT(A) IN ASSESSEES OWN CASE F OR AY 2008-09 WITHOUT CALLING THE REQUISITE DETAIL. WHEN WE EXAMINE THE O RDER PASSED BY THE COORDINATE BENCH IN AY 2008-09, THOUGH THE IDENTICA L ISSUE, THE COMPLETE DETAILS OF EXPENSES WAS BROUGHT ON RECORD AND EXAMI NED BY THE TRIBUNAL. SO, IN THESE CIRCUMSTANCES, WE FEEL IT NECESSARY TO RES TORE THE ISSUE BACK TO THE AO TO DECIDE AFRESH. ASSESSEE S AT LIBERTY TO BRING ON RECORD THE NECESSARY EVIDENCE IN SUPPORT OF ITS CLAIM. CONSEQUENTLY, GRO UNDS NO. 8 & 8.1 ARE DETERMINED IN FAVOUR OF THE ASSESSEE FOR STATISTICA L PURPOSES. SINCE THIS ISSUE IS REMANDED BACK TO THE FILE OF TH E ASSESSING OFFICER IN THE EARLIER ASSESSMENT YEAR I.E. A.Y. 2009-10 BY THE TR IBUNAL, IT WILL BE APPROPRIATE TO REMAND BACK THIS ISSUE TO THE FILE OF THE ASSESS ING OFFICER FOR EXAMINING THE SAME. NEEDLESS TO SAY, THE ASSESSEE BE GIVEN OPPORT UNITY OF HEARING BY FOLLOWING PRINCIPLES OF NATURAL JUSTICE. GROUND NOS . 5 TO 5.3 ARE PARTLY ALLOWED FOR STATISTICAL PURPOSE. 23. AS REGARDS GROUND NO. 6 RELATING TO INTEREST LE VIED U/S 234 B AND 234D OF THE ACT, THE SAME IS CONSEQUENTIAL IN NATURE, HE NCE NOT ADJUDICATED UPON AT THIS JUNCTURE. 24. AS REGARDS TO REVENUES APPEAL IS CONCERNED, TH E REVENUE IS CONTESTING DELETION OF ADDITION OF RS. 41,07,645/- ON ACCOUNT OF RECRUITMENT AND TRAINING EXPENDITURE. THE LD. AR SUBMITTED THAT THE SAME HA S BEEN ALLOWED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEE IN ASSESSMENT YE AR 2008-09 BEING ITA NOS. 6006/DEL/2013, 5807/DEL/2013. THE TRIBUNAL HAS ALS O ALLOWED THIS ISSUE IN 16 ITA NOS. 381 & 124/DEL/2015 FAVOUR OF THE ASSESSEE FOR ASSESSMENT YEAR 2009-10 BEING ITA NO. 1855/DEL/2014 AND 979/DEL/2014. 25. THE LD. DR RELIED UPON THE ASSESSMENT ORDER. 26. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE TRIBUNAL IN A.Y. 2009-10 HELD AS UNDER: 40. FOLLOWING THE DECISION RENDERED BY COORDINATE BENCH IN THE SIMILAR SET OF FACTS AND CIRCUMSTANCES AND THE FACT THAT IN THE GLOBALISED SET UP THOUGH THE EMPLOYEES FREQUENTLY CHANGES THEIR JOBS BUT THEIR TRAINING IS NECESSARY TO COMPETE IN THE BUSINESS AND SUCH TRAIN ING DO NOT CREATE ANY ENDURING BENEFITS IN FAVOUR OF THE ASSESSEE, WE FIN D NO GROUND TO INTERFERE INTO THE FINDINGS RETURNED BY LD. DRP DELETING THE ADDITION OF RS.1,21,71,558/- , HENCE GROUND NO. 1 OF ITA NO.979/DEL/2014 IS DETE RMINED AGAINST THE REVENUE. THE LD. DR COULD NOT DISTINGUISH THE FACTUAL ASPECT IN THE PRESENT ASSESSMENT YEAR AND THAT OF THE EARLIER ASSESSMENT YEARS. THER EFORE, THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE. GROUND NO. 1 OF REVENUES APPEAL IS DISMISSED. 27. IN RESULT, APPEAL OF THE ASSESSEE BEING ITA NO. 381/DEL/2015 IS PARTLY ALLOWED FOR STATISTICAL PURPOSE AND APPEAL OF THE R EVENUE BEING ITA NO. 124/DEL/2014 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST DECEMBER, 2018 . SD/- SD/- (N. K. BILLAIYA) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 21/12/2018 R. NAHEED * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 17 ITA NOS. 381 & 124/DEL/2015 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE OF DICTATION 29 .10.2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 29 .10.2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS 2 1 .1 2 .2018 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 2 1 .1 2 .2018 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 2 1 .1 2 .2018 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK