Bausch & Lomb India Pvt. Ltd., Gurgaon V. DCIT, circle-4(1), New Delhi

ITA 7808/DEL/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3481 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I1
• Assessment Year: 2014-2015
• Appeal Filed On: 07-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY I BARA; SANDEEP KR MISHRA
• Assessee Lawyers: SANDEEP S KARHAIL ADVS
• Keywords: Transfer pricing; International transaction; Application of stay; Wholly owned subsidiary; Commercial expediency
• Section: 92C; 143(3); 92B; 142(1); 234B; 10B

Judgement Text

1 ITA NO. 7808/DEL/2018 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: I-1 NEW DELHI BEFORE SHRI N. S. SAINI, ACCOUNTANT ME MBER AND MS SUCHITRA KAMBLE, JUDI CIAL MEMBER I.T.A. NO. 7808/DEL/20 18 (A.Y 2014-15) BAUSCH & LOMB INDIA PVT. LTD. 4 TH FLOOR, TOWER-B, UNITECH BUSINESS PARK, SOUTH CITY-1, GURGAON HARYANA, PIN: 122001 AABCB3877E (APPELLANT) VS DCIT CIRCLE-4(1) ROOM NO. G-15B, C. R. BUILDING, NEW DELHI (RESPONDENT) S.A NO. 976/DEL/2018 ( A.Y 2014-15) BAUSCH & LOMB INDIA PVT. LTD. 4 TH FLOOR, TOWER-B, UNITECH BUSINESS PARK, SOUTH CITY-1, GURGAON HARYANA, PIN: 122001 AABCB3877E (APPELLANT) VS DCIT CIRCLE-4(1) ROOM NO. G-15B, C. R. BUILDING, NEW DELHI (RESPONDENT) APPELLANT BY SH. NAGESHWAR RAO & SH. SANDEEP S. KARHAIL, ADVS RESPONDENT BY SH. SANDEEP KR. MISHRA, SR DR & SH. SANJAY I. BARA, CIT DR ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE AS SESSMENT ORDER DATED 26/10/2018 PASSED BY THE ASSESSING OFFICER U/S 143 (3) READ WITH SECTION 144C OF THE INCOME TAX ACT, 1961 FOR ASSESSMENT YEA R 2014-15. DATE OF HEARING 31.01.2019 DATE OF PRONOUNCEMENT .02.2019 2 ITA NO. 7808/DEL/2018 2. THE GROUNDS OF APPEAL ARE AS UNDER:- APPEAL UNDER SECTION 253(1) OF THE INCOME TAX ACT, 1961 ('ACT) AGAINST THE ORDER DATED JANUARY 26 OCTOBER, 2018 (RECEIVED ON 5 NOVEMBER 2018) PASSED UNDER SECTION 144C (13) READ WITH SECTION 143(3) OF THE ACT (IMPUGNED ORDER), BY THE LEARNED DEPUTY COMMISSIONER OF INCOME TAX, C IRCLE-4(1), NEW DELHI (AO). GROUNDS OF APPEAL 1. THAT ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AND IN LAW, IMPUGNED ORDER INCORRECTLY DETERMINED TAXABLE INCOME OF RS. 30,67,10,630/- AS AGAINST RETURNED INCOME OF RS. - 6,00,66,615/- BY MAKING FO LLOWING ADDITIONS: A) PURPORTED SUBSTANTIVE ADDITION OF RS. 24,79,23,197 /- MADE BY LD. TRANSFER PRICING OFFICER (TPO) BASIS SELF- CONTRA DICTORY AND CATEGORICAL FINDING THAT NO ADVERSE INFERENCE IS DRAWN IN RESPECT OF O THER INTERNATIONAL TRANSACTION [MEANING EXCEPT ADVERTISING, MARKETING AND PROMOTION EXPENSES (AMP)] AND B) ADDITION OF RS. 11,88,13,177/- MADE BY LD. TPO IN RESPECT OF SERVICES AVAILED BY THE APPELLANT FROM ITS ASSOCIATED ENTERP RISES (AES) BASED ON MISTAKEN NOTIONS AND CONTRADICTORY ASSUMPTIONS. TRANSFER PRICING ADJUSTMENT RELATING TO AMP EXPENDI TURE : ON THE FACTS AND IN CIRCUMSTANCES OF PRESENT CASE A ND IN LAW: 2. THAT LD. AO/TPO AND DRP HAVE ERRED IN MAKING AD JUSTMENT PURPORTEDLY IN RELATION TO AMP EXPENSES INCURRED BY APPELLANT, DISREGARDING DECISION OF HONBLE DELHI HIGH COURT IN THE APPELLANTS OWN CAS E FOR EARLIER YEARS. 3. THAT IMPUGNED ORDER ERRED IN NOT APPLYING PRINC IPLES LAID DOWN IN DECISION BY HONBLE HIGH COURT EVEN WHILE NOTING TH ERE IS NO DISTINCTION BETWEEN DISTRIBUTOR AND MANUFACTURER & ACCEPTIN G ABSENCE OF TOOLS TO MEASURE IMPACT UNDER EXTANT LAW. 4. THAT LD. TPO/AO/ DRP HAVE ERRED BY NOT ASSESSING INTERNATIONAL TRANSACTION AS ENTERED INTO WITH AE FOR ARMS LENGT H BUT RE-WRITING THE SAME ON IMAGINARY BASIS. 3 ITA NO. 7808/DEL/2018 5. THAT LD. AO/ TPO/ DRP HAVE ERRED IN ADOPTING I NTENSITY ADJUSTMENT, UNKNOWN TO LAW, AS BASIS FOR ADJUSTING NET PROFIT M ARGIN OF COMPARABLE COMPANIES WITHOUT APPRECIATING SAME IS NOTHING BUT MIRROR IMAGE OF BRIGHT LINE TEST (BLT) WHICH HAS ALREADY BEEN HELD TO BE UNLAWFUL BY HONBLE DELHI HIGH COURT. 6. THAT IMPUGNED ORDER EQUALISING OTHER EXPENSES ACROSS COMPARABLE COMPANIES ON THE PRETEXT OF MAKING INTENSITY ADJUS TMENT, WHICH METHOD IS NOT KNOWN TO LAW/ IS INVALID AS MUCH AS BLT, IN THE PROCESS OF APPLICATION OF TRANSACTIONAL NET MARGIN METHOD (TNMM) IS NOT AS PE R PROVISIONS IN CHAPTER X OF THE ACT AND RULES THERE UNDER. 7. THAT IMPUGNED ORDER FAILED TO APPRECIATE THAT N O LAWFUL ADJUSTMENT CAN BE MADE FOR DIFFERENCE IN INTENSITY OF FUNCTIONS, I F ANY, SOLELY BY REFERENCE TO QUANTUM OF SPENDING, IN ABSENCE OF ADEQUATE AND ACC URATE DATA BEING AVAILABLE IN PUBLIC DOMAIN. 8. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. AO/ LD. TPO/ HON'BLE DRP HAVE ERRED IN USING INTENSITY ADJUSTMENT TO ADJUST THE NET PROFIT MARGIN OF COMPARABLE COMPANIES WITHOUT A PPRECIATING THAT INTENSITY ADJUSTMENT LEADS TO THE ASSUMPTION THAT APPELLANT H AS NOT EARNED ANY BENEFIT IN TERMS OF SALES/PROFIT OUT OF AMP EXPENSE S AND IN ARMS LENGTH SITUATION. 9. WITHOUT PREJUDICE TO ALL OTHER GROUNDS, LD TPO/ AO ERRED IN PERFORMING SO CALLED INTENSITY ADJUSTMENT ON ALL INDIRECT EXPEN SES WHILE PROFESSING TO CONSIDER QUANTUM OF MARKETING RELATED FUNCTION AND FURTHER ERRED IN MAKING INAPPROPRIATE SELECTION OF COMPARABLES PROVIDING MA RKETING SUPPORT SERVICES AND HONBLE DRP ERRONEOUSLY UPHELD THE APPROACH OF LD. TPO/AO. 10. WITHOUT PREJUDICE TO ALL OTHER GROUNDS, LD. AO /TPO/ DRP ERRED IN MAKING INAPPROPRIATE SELECTION OF COMPANIES AS COMP ARABLE AND REJECTED COMPARABLE COMPANIES PROPOSED BY APPELLANT CITING I NCORRECT REASONS. 11. WITHOUT PREJUDICE TO ALL OTHER GROUNDS, LD. TP O/ AO/DRP HAVE MADE CERTAIN ERRORS WHILE COMPUTING INTENSITY BASE D ADJUSTMENT. 12. LD. AO/LD. TPO / DRP HAVE ERRED IN RETAINING P ROTECTIVE 4 ITA NO. 7808/DEL/2018 ASSESSMENT BASED ON BLT EVEN THOUGH THE SAME HAS BE EN HELD TO BE UNLAWFUL FURTHER, LD. TPO TRAVELLED MUCH BEYOND JUR ISDICTION CONFERRED IN LAW IN QUESTIONING THE REASONABLENESS, QUANTUM, AND COM MERCIAL EXPEDIENCY OF AMP EXPENDITURE INCURRED BY THE APPELLANT. 13. IMPUGNED ORDER ERRED IN NOT APPRECIATING THAT AMP EXPENSES WERE INCURRED BY APPELLANT IN NORMAL COURSE OF BUSINESS, WERE WHOLLY AND EXCLUSIVELY FOR GENERATING DOMESTIC SALES FOR ITS B USINESS OPERATIONS AND FURTHER ERRED IN PRESUMING THAT SUCH EXPENSES RESUL TED IN CREATION OF MARKETING INTANGIBLES FOR AES. 14. LD. AO/DRP/TPO HAVE ERRED IN NOT APPRECIATING THAT BENEFIT ARISING FROM INCURRENCE OF AMP EXPENSES BY APPELLANT HAS BE EN RECEIVED BY THE APPELLANT AND BENEFIT, IF ANY, RESULTING TO AES IS MERELY INCIDENTAL. 15. WHILE COMPUTING PROTECTIVE ADJUSTMENT, LD. AO/ TPO AND HONBLE DRP HAVE ERRED IN HOLDING THAT AMP EXPENDITURE INCU RRED BY THE APPELLANT, IS SEPARATE INTERNATIONAL TRANSACTION, DISREGARDING FINDINGS OF HON'BLE DELHI HIGH COURT IN THE APPELLANT'S OWN CASE FOR EARLIER YEARS. 16. WITHOUT PREJUDICE TO FACT THAT APPELLANT WAS F ULLY COMPENSATED FOR ITS EFFORTS AS IS EVIDENT FROM ARM'S LENGTH MARGINS EARNED AS DISTRIBUTOR, LD. AO/ LD. TPO/ HON'BLE DRP IN NOT APPRECIATING THAT A MP EXPENSES INCURRED BY APPELLANT DID NOT VIEW OF AN 'INTERNATIONAL TRANSACTION' PERTAINING T O RENDITION OF SERVICE, AS SECTION 92B OF THE ACT, DI STINCT FROM ITS FUNCTIONAL PROFILE AND RESPONSIBILITY AS A DISTRIBUTOR.. 17. LD.CIT(A) TPO/DRP HAVE ERRED IN SELECTING COMPA RABLE UNCONTROLLED PRICE (CUP) METHOD FOR DETERMINATION OF THE COST BASE IN CONSIDERING THE BRIGHT LINE CONCEPT AS A ID FURTHER ERRED IN NOT APPLYING CUP IN THE MANNER PRESCRIBED UNDER RULE 10B OF THE RULES. 18. TPO/ AO HAS ERRED IN LEVYING A FURTHER MARK-U P ON AMP EXPENSES INCURRED OVER AND ABOVE THE SO-CALLED BR IGHT-LINE LIMIT BY COMPARING WITH ENTITIES PROVIDING MARKET SUPPORT FUNCTIONS. 5 ITA NO. 7808/DEL/2018 TRANSFER PRICING ADJUSTMENT IN RELATION TO PAYMENT TOWARDS INTRA-GROUP SERVICES: ON THE FACTS AND IN CIRCUMSTANCES OF PRESENT CASE AND IN LAW: 19. THAT IMPUGNED ORDER ERRED IN DETERMINING ALP OF INTRA- GROUP SERVICES I.E., REGIONAL SUPPORT SERVICES AVAILED BY APPELLANT FROM ITS ASSOCIATED ENTERPRISES (AES) AT NIL AS AGAINST AC TUAL PAYMENT OF RS. 11,88,13,177/-, BY PURPORTEDLY APPLYING CUP, WHILE COMPLETELY IGNORING MATERIAL AVAILABLE ON RECORD, AS ALSO SEPARATE BENC HMARKING OF THIS INTERNATIONAL TRANSACTION ALREADY CARRIED OUT BY AP PELLANT. NEITHER SELECTION OF CUP AS MOST APPROPRIATE METHOD NOR ITS APPLICATION BY LD. TPO IS AS PER PROVISIONS OF CHAPTER X. 20. THAT ON FACTS AND IN LAW, LD. TPO ERRED IN MAK ING THE AFORESAID ADDITION WITHOUT DISCHARGING HIS STATUTORY ONUS OF ESTABLISHING THAT THE CONDITIONS SPECIFIED IN CLAUSE (A) TO (D) OF SECTIO N 92C (3) OF THE ACT ARE SATISFIED BEFORE DISREGARDING THE ARMS LENGTH PRIC E DETERMINED BY THE APPELLANT AND PROCEEDING TO DETERMINE THE ARMS LEN GTH PRICE HIMSELF. 21. LD. TPO/AO/DRP HAVE ERRED IN ALLEGING THAT APPE LLANT FAILED TO ESTABLISH ACTUAL RENDITION OR SERVICES WITHOUT APPRECIATING T HE DETAILED DOCUMENTATION AND EVIDENCES SUBMITTED. 22. THAT IN MAKING THE AFORESAID ADDITION, THE LD. TPO/AO/DRP PROCEEDED IN IRRELEVANT AND BASELESS PRESUMPTIONS T HAT THAT THE SERVICES RENDERED BY AES COULD HAVE BEEN AVAILED LOCALLY BY APPELLANT OR THAT THERE WAS NO NECESSITY OR BENEFIT ARISING FROM SUCH SERVI CES OR THAT SUCH SERVICES ARE STEWARD SHIP / SHAREHOLDER ACTIVITIES EVEN WHIL E ALLEGING THAT NATURE OF SERVICES IS NOT CLEAR. COMMON GROUNDS 23. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED AO HAS ERRED IN INITIATING PENALTY PROCEEDI NGS UNDER SECTION 271 (1 ) ( C) READ WITH SECTION 274 OF THE ACT. 24. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED AO HAS ERRED, IN CHARGING INTEREST UNDER SE CTIONS 234B AND 234D OF 6 ITA NO. 7808/DEL/2018 THE ACT. THE ABOVE GROUNDS ARE INDEPENDENT AND WITHOUT PREJU DICE TO EACH OTHER. 3. THE ASSESSEE COMPANY, BAUSCH & LAMB EYECARE (IND IA) PVT. LTD. IS WHOLLY OWNED SUBSIDIARY OF BAUSCH & LAMB SOUTH ASIA INC. USA AND ENGAGED IN THE BUSINESS OF MANUFACTURING SENSE CARE SOLUTIO NS AND TRADING OF CONTACT LENSES AND PROTEIN REMOVAL ENZYME TABLETS. THE COMP ANY IS ALSO ENGAGED IN THE TRADING OF OPHTHALMIC INTRA OCULAR LENSES AND SURGI CAL EQUIPMENTS. THE RETURN OF INCOME DECLARING LOSS OF (-) RS. 6,00,66,615/- U NDER NORMAL PROVISIONS OF THE I.T ACT, 1961 AND BOOK PROFIT (LOSS) OF (-) RS. 9,2 4,25,408/- WAS FILED ON 30/11/2014. THE CASE WAS SELECTED FOR SCRUTINY AND FIRST NOTICE U/S 143(2) OF THE ACT DATED 31/8/2015 WAS ISSUED AND SERVED ON AS SESSEE. SUBSEQUENTLY, NOTICE U/S 142(1) OF THE INCOME TAX ACT, 1961 WAS C ALLED FOR. IN RESPONSE THERETO, CA & ARS OF THE ASSESSES COMPANY ATTENDED THE PROCEEDINGS FROM TIME TO TIME AND FILED NECESSARY DETAILS AS CALLED FOR W HICH WERE EXAMINED AND PLACED ON RECORD. DURING THE PREVIOUS YEAR UNDER CO NSIDERATION, THE ASSESSEE ENTERED INTO INTERNATIONAL TRANSACTIONS WITH ASSOC IATED ENTERPRISES WITHIN THE MEANING OF SECTION 92B OF THE ACT THE DETAILS OF SA ID TRANSACTIONS WERE MENTIONED IN FORM NO, 3CEB FILED BY THE ASSESSEE. T HE CASE WAS REFERRED TO THE TRANSFER PRICING OFFICER AS PER PROVISIONS OF S ECTION 92CA(1) OF THE I T. ACT AFTER TAKING STATUTORY APPROVAL FROM THE COMMISSION ER OF INCOME TAX, DELHI-!, NEW DELHI FOR COMPUTATION OF ARM'S LENGTH PRICE IN RELATION TO THE INTERNATIONAL TRANSACTIONS. SUBSEQUENTLY, AN ORDER U/S 92CA(3) OF THE ACT WAS PASSED BY THE ACIT, TRANSFER PRICING OFFICER-I(L)(L). NEW DELHI O N 27/10/2017 WHEREIN AN ADJUSTMENT OF RS. 42,10,32,235/- AND PROTECTIVE ADDITION OF RS. 15,23,97,596/- ATTRIBUTABLE TO DIFFERENCE IN ARMS LENGTH PRICE OF THE INTERNATIONAL TRANSACTIONS ENTERED BY THE ASSESSEE WITH ASSOCIATED ENTERPRISES HAS BEEN MADE. IN VIEW OF THE DETAILED REASON IN TH E TPOS ORDER, THE ADDITION OF RS.42,10,32,235/- AND PROTECTIVE ADDITION OF RS. 15,23,97,596/- WAS PROPOSED ON ACCOUNT OF ARMS LENGTH PRICE DETERMINED BY THE TPO AND THE 7 ITA NO. 7808/DEL/2018 SAME WAS ADDED TO THE INCOME OF THE ASSESSEE COMPAN Y VIDE DRAFT ASSESSMENT ORDER DATED 28/12/2017. FURTHER, THE ASSESSES COMPA NY HAD RAISED OBJECTION VIDE OBJECTION NO. 76/2017-18 ON 24/01/201S BEFORE HONBLE DRP AGAINST THE DRAFT ASSESSMENT ORDER DATED 28/12/2017 ON THE ISSU E OF ARMS LENGTH PRICE OF INTERNATIONAL TRANSACTIONS. ACCORDINGLY, THE DRP PASSED AN ORDER U/S 144C(5) DATED 18/09/2018 AND THE DRP DIRECTED THE A O/TPO TO INCORPORATE THE REASONS GIVEN BY THE DRP IN RESPECT OF VARIOUS OBJECTIONS AT THE APPROPRIATE PLACES IN DIE BODY OF THE FINAL ORDER W HICH WAS RECEIVED IN LIDS OFFICE ON 24/09/2012 TO BE IMPLEMENTED BY THE ASSES SING OFFICER AS PER THE DIRECTIONS GIVEN BY THE DRP. IN VIEW OF THE DIRECTI ON OF THE DRP, THE TPO HAS PASSED APPEAL EFFECT ORDER ON 18/10/2018 GIVING EFF ECT TO THE DRPS DIRECTION WHICH WAS RECEIVED IN THIS OFFICE ON 22/10/2018. WH ILE GIVING EFFECT TO TIRE DIRECTIONS OF THE HONBLE DRP, THE FINAL LIST OF CO MPARABLES AND THE CALCULATION OF ALP IS AS UNDER: S.NO. NAME OF THE COMPANY ADJUSTED OP/OC (AS PER DIRECTION OF HONBLE DRP) 1 CRYSTAL HUES LTD. 5.23% 2 ICRA MANAGEMENT CONSULTING SERVICES LTD. 4.01% 3 KESTONE INTEGRATED MARKETING SERVICES PVT. LTD. 10.11% 4 MARKETING CONSULTANT & AGENCIES 9.41% AVERAGE 7.19 THEREFORE, THE TAXPAYER COMPANY SHOULD HAVE BEEN C OMPENSATED BY THE AE AT RS.12,73,69,491/- PLUS MARK UP @ 7.19% FOR UN DERTAKING ADVERTISEMENT, MARKETING AND PUBLICITY ACTIVITIES P URELY FOR AE AND MOST IMPORTANTLY CREATING A MARKETING INTANGIBLE FOR THE AE. THE NET ADJUSTMENT, 8 ITA NO. 7808/DEL/2018 THEREFORE, WORKS OUT TO RS. 13.65.27,35?/-ON PROTEC TIVE BASIS. AS REGARDS TO INTRA GROUP SERVICES, THE DRP MADE THE FOLLOWING OB SERVATION TOWARDS THE ADJUSTMENT OF INTRA GROUP SERVICES: HAVING CONSIDERED THE SUBMISSION OF THE ASSESSEE , WE FIND THAT (HE DRP IN AY 2011-12 & 2012-15 HAVE UPHELD THE TPOS ACTIO N, IN VIEW OF THE SLP UNDER PROCESS OF BEING FILED. IN VIEW OF THE FACT THAT HONBLE DELHI HIGH COURT HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE IN RESPECT OF IGS PAYMENTS, WE DIRECT THE TPO/AO TO VERIFY AND ASCERTAIN AS TO WHETHER THE SLP FILED IN ASSESSES S CASE AGAINST THE HIGH COURT'S ORDER DATE D 23.12.2015 AND 17.04.2017 CONTAINS THE GROUNDS RELATING TO IGS. IF THE GROUNDS OF IGS HAVE BEEN PREFERRED IN SLP, THEN ONLY THE TP ADJUSTMENT SHOULD HE RETAINED, OTHERWISE NOT ' THE ISSUE HAS BEEN TAKEN AS A GROUND FOR FILLING TH E SLP IN THE ASSESSEES OWN CASE FOR THE A.Y. 2011-12 AND THE SAID SLP IS S TILL PENDING BEFORE THE HONBLE APEX COURT AND YET NOT DECIDED. IN VIEW OF THIS AND AS PER THE ABOVE DIRECTION OF THE DRP, THE ADJUSTMENT MADE BY THE TP O IN RESPECT OF IGS WILL REMAIN SAME. AFTER GIVING EFFECT TO THE DIRECTIONS OF THE DRP ON ALL THE ABOVE ISSUES, THE CUMULATIVE ADJUSTMENT MADE BY THE TPO A RE AS UNDER:- S.NO. NATURE OF TRANSACTION ADJUSTMENT AF TER GIVING EFFECT OF HONBLE DRP 1 AMP ON PROTECTIVE BASIS RS.13,66,27,357/- 2 AMP ON SUBSTANTIVE BASIS RS.24,79,23,197/- 3 INTRA GROUP SERVICES RS.11,88,13,177/- TOTAL RS.36,67,36,374/- THE ASSESSING OFFICER ENHANCED THE INCOME OF THE T AXPAYER BY RS, 36,67,36,374/- AS A RESULT OF GIVING EFFECT TO THE DIRECTIONS OF THE DRP. IN VIEW OF THE ABOVE, THE PROPOSED ADDITION OF RS, 42,10,32 ,235/-(SUBSTANTIVE) AND RS. 15.23,97,596/-(PROTECTIVE) MADE IN THE DRAFT ASSESS MENT ORDER WAS REDUCED AMOUNTING TO RS.36,67,36,374/-(SUBSTANTIVE) & RS. 13,65,27,357/- (PROTECTIVE) WITH DIRECTIONS OF THE HONBLE DRP AS WELL AS TPOS ADJUSTMENTS. THEREFORE, THE AMOUNT OF RS.36,67,36,374/- WAS ADDED TO THE INCOME OF THE ASSESSEE 9 ITA NO. 7808/DEL/2018 COMPANY ON ACCOUNT OF TRANSFER PRICING ADJUSTMENT. 4. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASS ESSEE FILED PRESENT APPEAL BEFORE US. 5. THE LD. AR SUBMITTED THAT THE ISSUE IS SQUARELY COVERED BY THE DECISION OF THE HON'BLE HIGH COURT IN ASSESSEES OWN CASE F OR ASSESSMENT YEARS 2006- 07, 2007-08, 2008-09 & 2009-10 REPORTED IN (2016) 381 ITR 227 AS WELL AS IN ASSESSMENT YEAR 2012-13 BY THE TRIBUNAL. 6. THE LD. DR SUBMITTED THAT THE DEPARTMENT IS IN A PPEAL BEFORE THIS HONBLE APEX COURT IN RESPECT OF HON'BLE HIGH COURT S DECISIONS IN ASSESSEES OWN CASE FOR ASSESSMENT YEARS 2006-07, 2007-08, 200 8-09 & 2009-10. THE LD. DR COULD NOT CONTROVERT THAT THE FACTUAL ASPECT S OF THE PRESENT ASSESSMENT YEAR ARE IDENTICAL WITH THE EARLIER ASSESSMENT YEAR S WHICH WAS DECIDED BY THE HON'BLE HIGH COURT AS WELL AS TRIBUNAL FOR ASSESSME NT YEAR 2012-13. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. THE ISSUES INVOLVED ARE AMP EXPENSES AND TRANSFER PRICING ADJUSTMENT IN INTRA GROUP SERVICES BOTH THE ISSUES ARE SQUAREL Y COVERED IN ASSESSEES FAVOUR BY THE HON'BLE HIGH COURT AS WELL AS TRIBUNA L IN ASSESSMENT YEAR 2012- 13. THE HONBLE HIGH COURT HELD AS UNDER: 66. ON THE ISSUE OF THE INTRA-GROUP SERVICES, THE ASSESSEE IS JUSTIFIED IN CONTENDING THAT THE RE-CHARACTERIZATION OF ITS TRAN SACTION INVOLVING ITS AE FOR THE TWO YEARS WHICH HAVE BEEN FULLY DISCLOSED IN TH E TP STUDY ON THE BASIS OF IT NOT BEING FOR COMMERCIAL EXPEDIENCY OF THE ASSES SEE IS CLEARLY BEYOND THE POWERS OF THE TPO AND CONTRARY TO THE LEGAL POSITIO N EXPLAINED IN EKL APPLIANCES LTD.S CASE (SUPRA) 67. FOR THE AFOREMENTIONED REASONS THE COURT IS SAT ISFIED THAT THE REVENUE HAS NOT BEEN ABLE TO SHOW THE EXISTENCE OF AN INTERNATIONAL TRANSACTION INVOLVING AMP EXPENSES BETWEEN THE ASSE SSEE AND ITS AE, B&L, 10 ITA NO. 7808/DEL/2018 USA. QUESTION (II) IS ACCORDINGLY ANSWERED IN FAVOU R OF THE ASSESSEE AND AGAINST THE REVENUE. THE FACTS OF THE PRESENT ASSESSMENT YEAR ARE IDENTI CAL WITH THAT OF A.YS. 2006- 07 TO 2009-10. THEREFORE, APPEAL OF THE ASSESSEE IS ALLOWED AND STAY APPLICATION IS DISMISSED. 8. IN RESULT, APPEAL OF THE ASSESSEE IS ALLOWED AND STAY APPLICATION IS DISPOSED OFF ACCORDINGLY. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH FEBRUARY, 2019 . SD/- SD/- (N. S. SAINI) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 25/02/2019 R. NAHEED * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 11 ITA NO. 7808/DEL/2018 DATE OF DICTATION 1 .02.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 0 4 .02.2019 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 5 .0 2 .2019 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 2 5 .0 2 .2019 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 2 5 .0 2 .2019 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK