Beam Global Spirits & Wine India Private Limited, New Delhi V. DCIT, Circle-2(1), New Delhi

ITA 718/DEL/2020

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 9483 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: I1
• Assessment Year: 2010-2011
• Appeal Filed On: 07-02-2020
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SARAS KUMAR SENIOR
• Assessee Lawyers: ANUBHAV RASTOGI S
• Keywords: Transfer pricing
• Section: 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI FRIDAY BENCH FRIDAY BENCH FRIDAY BENCH FRIDAY BENCH A AA A : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI (THROUGH VIDEO CONFERENCING) (THROUGH VIDEO CONFERENCING) (THROUGH VIDEO CONFERENCING) (THROUGH VIDEO CONFERENCING) BEFORE SHRI G.S. PANNU BEFORE SHRI G.S. PANNU BEFORE SHRI G.S. PANNU BEFORE SHRI G.S. PANNU, ,, , VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND SHRI K. NARASIMHA CHARY SHRI K. NARASIMHA CHARY SHRI K. NARASIMHA CHARY SHRI K. NARASIMHA CHARY, JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER ITA NO ITA NO ITA NO ITA NO .718/DEL/2020 .718/DEL/2020 .718/DEL/2020 .718/DEL/2020 ASSESSMENT YEA ASSESSMENT YEA ASSESSMENT YEA ASSESSMENT YEA R : 2010 R : 2010 R : 2010 R : 2010 - -- - 11 1111 11 M/S BEAM GLOBAL S M/S BEAM GLOBAL S M/S BEAM GLOBAL S M/S BEAM GLOBAL S PIRITS & PIRITS & PIRITS & PIRITS & WINE INDIA PRIVATE LIMITED, WINE INDIA PRIVATE LIMITED, WINE INDIA PRIVATE LIMITED, WINE INDIA PRIVATE LIMITED, 12 1212 12 TH THTH TH FLOOR, TOWER FLOOR, TOWER FLOOR, TOWER FLOOR, TOWER- -- -C, C,C, C, BUILDING NO.10, DLF CYBER BUILDING NO.10, DLF CYBER BUILDING NO.10, DLF CYBER BUILDING NO.10, DLF CYBER CITY, PHASE CITY, PHASE CITY, PHASE CITY, PHASE- -- -II, II,II, II, GURGAON, GURGAON, GURGAON, GURGAON, HARYANA. HARYANA. HARYANA. HARYANA. PAN : AAACA1614R. PAN : AAACA1614R. PAN : AAACA1614R. PAN : AAACA1614R. VS. VS. VS. VS. DEPUTY DEPUTY DEPUTY DEPUTY COMMISSIONER OF COMMISSIONER OF COMMISSIONER OF COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -2(1), 2(1), 2(1), 2(1), NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : S HRI K.M. GUPTA & SHRI ANUBHAV RASTOGI, ADVOCATES. RESPONDENT BY : SHRI SARAS KUMAR, SENIOR DR. DATE OF HEARING : 2 22 21.08 1.08 1.08 1.08.2020 .2020 .2020 .2020 DATE OF PRONOUNCEMENT : 2 22 21.08 1.08 1.08 1.08.2020 .2020 .2020 .2020 INTERIM INTERIM INTERIM INTERIM ORDER ORDER ORDER ORDER PER G.S. PANNU PER G.S. PANNU PER G.S. PANNU PER G.S. PANNU, , , , VP VPVP VP : :: : THIS APPEAL BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2010-11 IS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIO NER OF INCOME TAX (APPEALS)-42, NEW DELHI DATED 3 RD DECEMBER, 2019. 2. WITH RESPECT TO THE CAPTIONED PROCEEDING, THE AS SESSEE HAS SOUGHT PERMISSION TO WITHDRAW THE FOLLOWING TWO GRO UNDS OF APPEAL RAISED IN THE MEMORANDUM OF APPEAL FOLLOWING THE RE SOLUTION OF THE DISPUTE UNDER MAP WITH UK, AND, IN SUPPORT, A COMMU NICATION OF CBDT ITA-718/DEL/2020 2 (FOREIGN TAX & TAX RESEARCH-I DIVISION) DATED 17 TH JULY, 2020 HAS BEEN PLACED ON RECORD :- 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW, THE LD.CIT(A) ERRED IN LAW IN TRAV ELING BEYOND THE SUBJECT MATTER OF APPEAL WHILE DIRECTING THE LD. TRANSFER PRICING OFFICER (TPO)/ASSESSING OFFICER (A O) TO CONSIDER AMP INTENSITY AS A FUNCTION FOR DETERMININ G ARMS LENGTH PRICE OF MANUFACTURING AND DISTRIBUTION SEGM ENT WITHOUT APPRECIATING THAT THE SUBJECT MATTER OF APP EAL WAS RESTRICTED TO WHETHER AMP IS AN INTERNATIONAL TRANS ACTION. HENCE, THE DIRECTION TO THE LD. TPO TO EXAMINE AND APPLY AMP INTENSITY IS BEYOND THE SCOPE OF POWERS OF CIT( A) UNDER SECTION 251(1) OF THE ACT. 4. THAT THE LD.CIT(A) GROSSLY ERRED IN LAW IN DIREC TING THE LD.TPO/AO TO CARRY OUT AN AMP INTENSITY ADJUSTM ENT, AFTER HAVING CONCLUDED THAT THERE WAS NO INTERNATIO NAL TRANSACTION VIS-A-VIS THE MANUFACTURING SEGMENT; 4.1 THAT THE LD.CIT(A) FAILED TO APPRECIATE THAT TH E DIRECTION TO CARRY OUT AMP INTENSITY ADJUSTMENT, GI VEN BY THE JURISDICTIONAL HIGH COURT IN THEIR RECENT DECIS IONS, WAS ON BASIS OF THE ADMITTED POSITION OF FACT IN SAID C ASES REGARDING THE EXISTENCE OF INTERNATIONAL TRANSACTIO N AND HENCE, NOT APPLICABLE TO THE INSTANT CASE; 4.2 THAT THE LD.CIT(A), IN THE GARB OF AMP INTENSIT Y ADJUSTMENT, HAS ERRED IN IMPLYING/CONCLUDING THAT T HE AMP FUNCTIONS CARRIED OUT BY THE APPELLANT MAY ALSO PRO VIDE PROFITS IN THE MARKET WHICH MAY BE DIFFERENT FROM T HE DISTRIBUTION/MANUFACTURING PROFITS; 4.3 THAT THE LD.CIT(A) ERRED IN INCLUDING THE SELLI NG AND DISTRIBUTION EXPENSES WHILE COMPUTING THE AMP SPEND OF THE APPELLANT IN COMPLETE DISREGARD OF THE RATIO LA ID DOWN BY THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CAS E OF SONY ERICSSON MOBILE COMMUNICATIONS INDIA PVT.LTD. VS. C IT ((2005) 374 ITR 118). 3. CONSIDERING THE PLEA OF THE ASSESSEE, WHICH IS N OT OBJECTED BY THE LEARNED SENIOR DR, THE AFORESAID TWO GROUNDS OF APPEAL ARE PERMITTED TO BE WITHDRAWN. ITA-718/DEL/2020 3 4. THIS INTERIM ORDER IS BEING ISSUED IN DEFERENCE TO THE PRAYER OF THE ASSESSEE AND THE REMAINING GROUNDS OF THE CAPTI ONED APPEAL SUBSIST AND SHALL COME UP FOR HEARING BEFORE THE RE GULAR BENCH IN DUE COURSE. ABOVE DECISION WAS ANNOUNCED IN THE PRESENCE OF BOT H THE PARTIES ON CONCLUSION OF VIRTUAL HEARING ON 21 ST AUGUST, 2020. SD/- SD/- ( (( ( K. NARASIMHA CHARY K. NARASIMHA CHARY K. NARASIMHA CHARY K. NARASIMHA CHARY ) )) ) (G.S. PANNU (G.S. PANNU (G.S. PANNU (G.S. PANNU ) )) ) JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VK. COPY FORWARDED TO: - 1. APPELLANT : M/S BEAM GLOBAL SPIRITS & WINE IND IA PRIVATE M/S BEAM GLOBAL SPIRITS & WINE INDIA PRIVATE M/S BEAM GLOBAL SPIRITS & WINE INDIA PRIVATE M/S BEAM GLOBAL SPIRITS & WINE INDIA PRIVATE LIMITED, 12 LIMITED, 12 LIMITED, 12 LIMITED, 12 TH THTH TH FLOOR, TOWER FLOOR, TOWER FLOOR, TOWER FLOOR, TOWER- -- -C, BUILDING NO.10, DLF C, BUILDING NO.10, DLF C, BUILDING NO.10, DLF C, BUILDING NO.10, DLF CYBER CITY, PHASE CYBER CITY, PHASE CYBER CITY, PHASE CYBER CITY, PHASE- -- -II, GURGAON, HARYANA. II, GURGAON, HARYANA. II, GURGAON, HARYANA. II, GURGAON, HARYANA. 2. RESPONDENT : DEPUTY DEPUTY DEPUTY DEPUTY COMMISSIONER OF INCOME TAX, COMMISSIONER OF INCOME TAX, COMMISSIONER OF INCOME TAX, COMMISSIONER OF INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -2(1) 2(1) 2(1) 2(1), NEW DELHI. , NEW DELHI. , NEW DELHI. , NEW DELHI. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR