Moet Hennessy India Pvt. Ltd., Mumbai V. ACIT, New Delhi

ITA 85/DEL/2015

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 8672 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 3 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Assessment Year: 2010-2011
• Appeal Filed On: 06-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: H K CHOUDHARY CIT DR MS NIMITA
• Keywords: Business income; Transfer pricing; Business expenditure; International transaction; Set aside
• Section: 205; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH I-2 : NEW DELHI) BEFORE SHRI KULDIP SINGH, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO.85/DEL/2015 (ASSESSMENT YEAR : 2010-11) M/S. MOET HENNESSY INDIA PRIVATE LTD., VS. ACIT, CI RCLE 5(1), UNIT NO.1903, TOWER 2, 19 TH FLOOR, NEW DELHI. INDIABULLS FINANCIAL CENTRE, SENAPATI BAPAT MARG, ELPHINSTONE ROAD, MUMBAI 400 013. (PAN : AACCM4079L) (APPLICANT) (RESPONDENT) ASSESSEE BY : SHRI SUMIT MANGAL, ADVOCATE SHRI SAKSHAM SINGHAL, CA REVENUE BY : SHRI H.K. CHOUDHARY, CIT DR MS. NIMITA PANDEY, SENIOR DR DATE OF HEARING : 27.03.2019 DATE OF ORDER : 09.04.2019 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : THE APPELLANT, M/S. MOET HENNESSY INDIA PRIVATE LTD . (HEREINAFTER REFERRED TO AS THE TAXPAYER) BY FILI NG THE PRESENT APPEAL SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 13.11.2014 PASSED BY THE AO IN CONSONANCE WITH THE ORDERS PASS ED BY THE LD. DRP/TPO UNDER SECTION 143 (3) READ WITH SECTION 144 C OF THE ITA NO.85/DEL/2015 2 INCOME-TAX ACT, 1961 (FOR SHORT THE ACT) QUA THE ASSESSMENT YEAR 2010-11 ON THE GROUNDS INTER ALIA THAT :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE ASSISTANT COMMISSIONER OF INCOME-TAX - CIR CLE 5(1) ('AO')/ TRANSFER PRICING OFFICER (TPO')/ DISPUTE RE SOLUTION PANEL ('DRP') ERRED IN CONFIRMING THE ADJUSTMENT OF RS.7,12,19,145 BY HOLDING THAT THE APPELLANT OUGHT TO HAVE RECEIVED REIMBURSEMENT FOR 'ALLEGED EXCESSIVE' ADVE RTISING, MARKETING AND PROMOTION (AMP') EXPENSES FROM ITS A SSOCIATED ENTERPRISES. ('AES'). 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE AO / TPO/ DRP ERRED IN: A) DISREGARDING THE FACT THAT THE PREMIUM PROFITS E ARNED BY THE APPELLANT COMPENSATED FOR THE ALLEGEDLY EXCESSI VE AMP EXPENSES, IF ANY, INCURRED BY IT; B) DISREGARDING THE TRANSFER PRICING POLICY OF THE MOET GROUP WHEREIN MOET INDIA IS PROVIDED WITH AN AGREED CONTRIBUTION MARGIN WHICH CLEARLY INDICATES THAT MO ET GROUP FUNDS THE AMP EXPENSES OF MOET INDIA; C) MISINTERPRETING OR PLACING INCORRECT RELIANCE ON THE INTERNATIONAL GUIDANCE IN RELATION TO THE 'MARKETIN G INTANGIBLES' FROM ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT ('OECD'), US TP REGULATIONS AND AUSTRAL IAN TAX OFFICE ('ATO') AND RELYING ON SEVERAL ERRONEOUS/ FA CTUALLY INCORRECT AND CONTRADICTORY STATEMENTS/ OBSERVATION S IN THE TRANSFER PRICING (TP') ORDER, WHICH ARE NOT RELEVAN T TO THE INSTANT CASE, ONLY IN ORDER TO JUSTIFY AN OTHERWISE INAPPROPRIATE AND UNWARRANTED TP ADJUSTMENT; D) INCORRECTLY HOLDING THE AMP EXPENSES INCURRED BY THE APPELLANT TO BE 'EXCESSIVE' ON THE BASIS OF A 'BRIG HT LINE LIMIT' ARRIVED AT BY DERIVING A DISTORTED AND INCORRECT SE T OF COMPARABLE COMPANIES; E) BY HOLDING THAT A MARK-UP OF 15% OUGHT TO BE EAR NED BY THE APPELLANT IN RESPECT OF THE 'ALLEGED EXCESSIVE' AMP EXPENSES, WITHOUT ANY BASIS; F) IN FOLLOWING THE DECISION OF THE HON'BLE SPECIAL BENCH IN THE CASE OF LG ELECTRONICS (152 TTJ 273) (DEL) (5B) WITHOUT APPRECIATING THE FACT THAT THE SAID DECISION WAS RE NDERED IN THE CONTEXT OF LICENSED MANUFACTURER AND HENCE NOT APPL ICABLE TO THE DISTRIBUTOR. ITA NO.85/DEL/2015 3 THE APPELLANT THEREFORE PRAYS THAT THE AFORESAID AD JUSTMENT BE DELETED. 3. WITHOUT PREJUDICE TO THE ABOVE, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE AO / TPO/ DRP ERRED IN CONSIDERING EXPENSES SUCH AS DISCOUNTS, REBATES, COMMISSION, TRADE COMPONENT COST, TRADE INCENTIVES, ETC. FOR CO MPUTING THE AMP SPEND RATIO OF THE APPELLANT. 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE CONTROVERSY AT HAND ARE : MOET INDIA, THE TAXPAYER HELD 99% BY CHAMPAGNE MOET & CHANDON, FRANCE (CMC) AND 1% BY JAS HANNESSY & CO., FRANCE (JHC). CMC IS ONE OF THE LEADING PRODUCERS OF CHAMPAGNE, WHICH IS A SPARKLING WINE M ANUFACTURED IN THE CHAMPAGNE REGION OF FRANCE. JHC IS A LEADIN G PRODUCER OF COGNAC (SPIRITS). 3. THE TAXPAYER IS INTO THE BUSINESS OF IMPORTING A ND DISTRIBUTING DIFFERENT KINDS OF WINES AND SPIRIT S AND EXECUTING (EX-BONDED) WAREHOUSE SALES IN INDIA. THE TAXPAYER UNDERTAKES MARKETING AND SALES PROMOTION OF PRODUCTS IN ITS TR ADING PORTFOLIO AND IS ASSISTED BY ITS ASSOCIATED ENTERPRISES (AE) IN CARRYING OUT THIS FUNCTION. THE TAXPAYER IMPORTS ADVERTISING AN D PROMOTIONAL MATERIAL FROM ITS AE SUCH AS WINE GLASSES, MENU HOL DERS ETC. TO BE GIVEN AS COMPLIMENTARY PRODUCTS TO ITS CUSTOMERS. 4. DURING THE YEAR UNDER ASSESSMENT, THE TAXPAYER E NTERED INTO INTERNATIONAL TRANSACTIONS WITH ITS AE AS UNDER :- ITA NO.85/DEL/2015 4 SR. NO. NATURE OF TRANSACTION METHOD USED BY ASSESSEE AMOUNT MHIPLS OPERATING MARGIN/SALES METHOD PLI 1. PURCHASE OF FINISHED GOODS TNMM OP/ SALES 189,956,058 7.72% 2. SALE OF FINISHED GOODS 7,66,15,647 3. REIMBURSEMENT OF EXPENSES CUP 8,353,558 - 4. RECOVERY OF EXPENSES CUP 604,740 TOTAL 275,530,003 4. LD. TPO HAS ACCEPTED ALL THE AFORESAID INTERNATI ONAL TRANSACTIONS AT ARMS LENGTH, HOWEVER DISPUTED THE ADVERTISEMENT, MARKING AND PROMOTIONAL (AMP) EXPENSES BY NOTICING THAT THE TAXPAYER HAS INCURRED HUGE AMP EXPENDITURE AND BENE FICIARY OF THE EFFORTS OF THE TAXPAYER IS ITS AE BECAUSE OF TH E INCREASE IN THE BRAND VALUE SIGNIFICANTLY. TPO ALSO TAKEN THE VIEW THAT THE TAXPAYER HAS CREATED MARKETING INTANGIBLES IN FAVOU R OF THE TAXPAYER. 5. DECLINING THE CONTENTIONS RAISED BY THE TAXPAYER THAT ANY BENEFIT THAT AE MAY HAVE DRAWN IS INCIDENTAL IN NAT URE AS THE BRAND TAXPAYER HAS RECEIVED FROM ITS AE HAS NO INTRINSIC VALUE, TPO AFTER USING BRIGHT LINE METHOD SELECTED 5 COMPARABLES W ITH AVERAGE OF AMP/SALES AT 4.678% AS AGAINST AVERAGE OF TAXPAY ER AT 13.34% AND HAS ALSO ADDED MARK-UP OF 15% ON AMP SPENT AND CALCULATED THE AMP EXPENSES AS UNDER :- ITA NO.85/DEL/2015 5 ARMS LENGTH MARGIN FOR MARKUP : 15% TOTAL REVENUE OF THE ASSESSEE 499,154,634 ARMS LENGTH PRICE OF AMP EXPENSES (%) 0.935% ARMS LENGTH AMP EXPENSES (A) 46,67,096 AMP EXPENSES INCURRED BY THE ASSESSEE (B) 66,596,78 7 EXPENDITURE INCURRED ON CREATION OF INTANGIBLES (B) (A) 6,19,29,691 MARK UP @ 15% 92,89,454 ARMS LENGTH VALUE OF AMP EXPENSES 71,219,145 6. THE TAXPAYER CARRIED THE MATTER BEFORE THE LD. D RP BY WAY OF FILING OBJECTIONS, WHO HAS CONFIRMED THE ARMS L ENGTH VALUE OF AMP EXPENSES AT RS.712,19,145/- PROPOSED BY THE TPO . FEELING AGGRIEVED, THE TAXPAYER HAS COME UP BEFORE THE TRIB UNAL BY WAY OF FILING THE PRESENT APPEAL. 7. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 8. UNDISPUTEDLY, ASSESSEE IS A DISTRIBUTOR EXPOSED TO ROUTINE RISKS ASSOCIATED WITH CARRYING OUT THE BUSINESS OF DISTRIBUTION OF WINE AND SPIRITS. IT IS ALSO NOT IN DISPUTE THAT TH E LD. TPO HAS RECOGNISED THE TAXPAYER AS A DISTRIBUTOR. IT IS AL SO NOT IN DISPUTE THAT THE TAXPAYER IS NOT THE OWNER OF THE BRAND. I T IS ALSO NOT IN DISPUTE THAT THE TPO HAS FOLLOWED LG ELECTRONICS INDIA PVT. LTD. VS. ACIT (2013) 29 TAXMANN.COM 300 (DELHI)(SB) AND USED THE ITA NO.85/DEL/2015 6 BRIGHT LINE TEST TO DETERMINE THE ARMS LENGTH VA LUE OF AMP EXPENSES. 9. THE LD. TPO NOTICED THAT THE AMP EXPENDITURE OF THE TAXPAYER IS 13.34% OF SALES AS AGAINST 0.935% OF SA LE FOR THE COMPARABLE, THUS INCURRED HUGE EXPENSES OF RS.66,59 6,787/- ON THE SALE OF RS.499,154,634/-. FOLLOWING THE LG ELECTRONICS INDIA PVT. LTD. (SUPRA), THE LD. TPO APPLIED COST PLUS METHOD FOR DETERMINING THE ALP OF INTERNATIONAL TRANSACTION OF BRAND BUILDING FOR ITS AE. 10. WE ARE OF THE CONSIDERED VIEW THAT FIRSTLY LG ELECTRONICS INDIA PVT. LTD. (SUPRA) DECIDED BY THE SPECIAL BENCH OF THE TRIBUNAL APPLYING THE BRIGHT LINE TEST IN ORDER T O DECIDE THE ISSUE IF AMP EXPENDITURE BY THE TAXPAYER IS INTERNA TIONAL TRANSACTION LEADING TO THE BRAND BUILDING OF ITS AE HAS SINCE BEEN OVERRULED BY THE HONBLE DELHI HIGH COURT IN SONY ERICSSON INDIA PVT. LTD. V. CIT (2015) 374 ITR 118 (DEL.) AND SUBSEQUENTLY IN MARUTI SUZUKI INDIA LTD. V. CIT (2016) 328 ITR 210 (DEL.) HAS CATEGORICALLY HELD THAT BLT IS NOT A VALID BASIS FO R DETERMINING THE EXISTENCE OF INTERNATIONAL TRANSACTION OR FOR THAT MATTER FOR COMPUTING THE ALP OF SUCH INTERNATIONAL TRANSACTION INVOLVING AMP EXPENSES, THE ORDER OF TPO PASSED BY MAKING BLT AS BASIS OF THE ALP ADJUSTMENT IS NOT SUSTAINABLE IN THE EYE S OF LAW. ITA NO.85/DEL/2015 7 11. LD. AR FOR THE TAXPAYER BROUGHT TO OUR NOTICE T HAT THE ISSUE IN CONTROVERSY IN THE PRESENT APPEAL IS A COVERED O NE IN TAXPAYERS OWN CASE FOR AY 2009-10 DECIDED IN ITA NO.1906/DEL/ 2014 DECIDED BY ORDER DATED 23.08.2018, WHICH FACT HAS NOT BEEN CONTROVERTED BY THE DL. DR FOR THE REVENUE. 12. LD. TPO IN ORDER TO ARRIVE AT THE DECISION THAT AMP EXPENDITURE INCURRED BY THE TAXPAYER IS AN INTERNAT IONAL TRANSACTION FOR WHICH REIMBURSEMENT SHOULD HAVE BEEN RECEIVED B Y THE TAXPAYER BY MAKING FOLLOWING OBSERVATIONS :- 2. IT IS SEEN FROM AUDITED FINANCIAL OF THE ASSES SEE COMPANY THAT A SUM OF RS.6,18,37,549/- HAS BEEN INCURRED BY IT ON ADVERTISEMENT AND SALES PROMOTION (AMP) WHICH AMOUN TS TO 26.94% OF THE TOTAL SALES OF THE ASSESSEE COMPANY. IT IS PROPOSED THAT THE AMP EXPENDITURE INCURRED BY THE ASSESSEE S HOULD BE CONSIDERED AS AN INTERNATIONAL TRANSACTION FOR WHIC H REIMBURSEMENT SHOULD HAVE BEEN RECEIVED BY THE ASSE SSEE AS IT LEADS TO CREATION OF MARKETING INTANGIBLE FOR THE A ES AND NOT FOR THE BUSINESS PURPOSES OF THE ASSESSEE. 2.1 IT HAS BEEN MENTIONED PARA 4.3.3 OF THE TRANSFE R PRICING REPORT THAT MHIPL DOES NOT OWN ANY SIGNIFICANT INT ANGIBLE AND DOES NOT UNDERTAKE ANY SIGNIFICANT RESEARCH AND DEV ELOPMENT ON ITS ACCOUNT THAT LEADS TO THE DEVELOPMENT OF NON ROUTINE INTANGIBLES. MHIPL USES THE TRADEMARK, KNOW-HOW, TE CHNICAL DATA SOFTWARE, QUALITY STANDARD ETC., DEVELOPED/OWN ED BY CMC. ALL COMPANIES OF THE GROUP LEVERAGE FROM THESE INTA NGIBLES FOR CONTINUED GROWTH IN REVENUES AND PROFITS. ACCORDING LY, MHIPL DOES NOT OWN ANY SIGNIFICANT NON-ROUTINE INTANGIBLE S. 2.2 FROM THE QUANTUM OF THE ADVERTISEMENT AND SALE S PROMOTION EXPENSE INCURRED BY THE ASSESSEE IT IS AP PARENT THAT THE ASSESSEE IS INVOLVED IN THE PROMOTION OF A BRAN D WHICH IS NOT OWNED BY IT. IT IS DOING IT FOR THE BENEFIT OF THE BRAND OWNER I.E. THE FOREIGN AE CMC, FRANCE, HENCE, IT SHOULD HAVE B EEN PAID FOR THE SERVICES BEING PROVIDED BY IT. HOWEVER, NO AGREEMENT BETWEEN THE ASSESSEE AND THE AE FOR THE PROMOTION O F THE BRAND HAS BEEN FILED. THE TRANSFER PRICING REGULATIONS RE QUIRE THAT IT IS ITA NO.85/DEL/2015 8 NOT THE FORM BUT THE OVERALL ARRANGEMENT/SUBSTANC E OF THE TRANSACTIONS THAT MUST BE KEPT IN MIND. SECTION 92F(V) OF THE INCOME-TAX ACT STATES: TRANSACTION INCLUDES AN ARRANGEMENT, UNDERSTANDING OR ACTION IN CONCERT, WHETHER OR NOT SUCH ARRANGEMENT, UNDERSTANDING OR ACTION IS FORMAL OR IN WRITING; SIMILARLY, RULE 10B(2)(C) STATES: THE CONTRACTUAL TERMS (WHETHER OR NOT SUCH TERMS A RE FORMAL OR IN WRITING) OF THE TRANSACTIONS WHICH LAY DOWN EXPLICITLY OR IMPLICITLY HOW THE RESPONSIBILITIES, RISKS AND BENEFITS ARE TO BE DIVIDED BETWEEN THE RESPECTIVE P ARTIES TO THE TRANSACTIONS; 2.3 ABOVE PROVISIONS READ WITH THE WELL ESTABLISHED DOCTRINE OF SUBSTANCE OVER FORM (APPLIED BY THE COURTS IN NUMEROUS JUDICIAL DECISIONS) INDICATE THAT TRANSFER PRICING REGULATIONS ARE TO BE APPLIED KEEPING IN MIND THE OVERALL SCHEME OF THE TAXPAYERS BUSINESS ARRANGEMENT. 2.4 IN VIEW OF THE DISCUSSIONS IN THE FOREGOING PA RAGRAPHS I AM OF THE CONSIDERED VIEW THAT THE EXPENDITURE INCU RRED ON AMP BY THE ASSESSEE AND THEREBY PROMOTING THE BRAND/TRA DE NAME OWNED BY CMC, FRANCE, THE AE IS AN INTERNATIONAL TR ANSACTION AND THE SAME HAS NEITHER BEEN REPORTED IN FORM 3CEB NOR HAS BEEN BENCHMARKED IN TRANSFER PRICING STUDY, I AM OF THE CONSIDERED VIEW THAT THE ONUS WHICH WAS ON THE ASSE SSEE TO BENCHMARK THE INTERNATIONAL TRANSACTION RELATING TO THE EXPENDITURE INCURRED ON AMP HAS NOT BEEN DISCHARGED . I THEREFORE PROPOSE TO BENCHMARK THE TRANSACTIONS REL ATING TO AMP. 2.5 IT HAS ALREADY BEEN STATED IN THE FOREGOING PA RAGRAPHS THAT THE EXPENDITURE ON AMP HAS BEEN INCURRED TO PR OMOTE THE BRAND/TRADE NAME OWNED BY CMC, FRANCE, THE AE AND S UCH EXPENDITURE HAS RESULTED INTO BRAND BUILDING AND IN CREASED AWARENESS OF THE PRODUCTS BEARING SUCH BRANDS/TRADE NAMES. I AM OF THE CONSIDERED VIEW THAT THE EXPENDITURE INCU RRED BY THE ASSESSEE COMPANY IS FOR THE ADVANTAGE OF ITS AE, SI NCE THE BRAND/TRADE NAME IS OWNED BY THE AE. IN SUCH A SITU ATION THE ASSESSEE COMPANY SHOULD HAVE BEEN SUITABLY COMPENSA TED BY THE AE. HOWEVER THE ASSESSEE HAS NOT RECEIVED ANY PAYME NT IN THIS REGARD FROM THE AE. THEREFORE IT IS CLEAR THAT THE ASSESSEE HAS NOT BEEN SUITABLY COMPENSATED BY THE AE IN RESPECT OF THE EXPENDITURE INCURRED BY IT (THE ASSESSEE) ON ADVERT ISING AND SALES PROMOTION EXPENSES (AMP) TO PENETRATE THE MAR KET AND TO INCREASE THE SALES BY PROMOTING THE BRAND NAME. ITA NO.85/DEL/2015 9 13. FROM THE AFORESAID OBSERVATIONS OF THE LD. TPO, WE HAVE GATHERED THAT THE TPO HAS TREATED THE AMP EXPENDITU RE AS INTERNATIONAL TRANSACTIONS MERELY ON THE GROUND THA T THE TAXPAYER HAS INCURRED HUGE EXPENSES ON AMP SPENT AND HAS MAD E COMPARISON WITH (I) IFB AGRO INDS. LTD.; (II) RAJAS THAN STATE GANGANAGAR SUGAR MILLS LTD.; (III J.L. MORISON (I) LTD.; AND (IV) LOTUS HERBALS LTD. HAVING AMP EXPENSES/SALES OF 1.3 2%, 0.55%, 7.32% & 9.50% RESPECTIVELY AS AGAINST TAXPAYERS AM P EXPENDITURE OF 18.14% OF THE TOTAL SALES. WE ARE O F THE CONSIDERED VIEW THAT HIGHEST AMP EXPENSES PER SE CANNOT BE A G ROUND TO INFER THAT THERE WAS AN INTERNATIONAL TRANSACTION. 14. THE TAXPAYER HAS GIVEN DETAILS OF EXPENSES IN T HE NATURE OF AMP EXPENSES, AVAILABLE AT PAGE 205 OF THE PAPER BO OK, WHICH ARE AS UNDER :- SR.NO. NATURE OF EXPENSES AMOUNT 1 ADVERTISING EXP 130,125 2 COST OF DJ @ RICKS FOR BELVEDERE 24,000 3 MUSIC BAND PAYMENT 1,097,845 4 DISPLAY CHARGES AT EVENTS 96,137 5 EMPLOYEE CLAIM FOR A&P EXPENSES 66,267 6 EVENT ORGANISER 49,635 7 EVENT/SPONSORSHIP EXPENSES 4,905,212 8 INCENTIVE 2,680,690 9 LAUNCH OF BV PROMOTION EVENING @ F BAR 125,000 10 MERCHANDING 274,871 11 RENT CONTRACT FOR VISIBILITY 919,440 12 TOWARDS PRINTING OF INVITES BV BEAT NIGHTS 49,58 8 13 TOWARDS VISIT OF REGIONAL BRAND AMBASSADOR 77,79 6 14 VISIBILITY 6,758,964 TOTAL 17,255,570 ITA NO.85/DEL/2015 10 15. THE TAXPAYER ALSO BROUGHT ON RECORD THE FACT TH AT THE AMP EXPENSES CONSIDERED BY THE TPO I.E. RS.90.551.831/- INCLUDE DISTRIBUTION EXPENSES OF RS.23,955,044/- WHICH ARE ALSO REQUIRED TO BE EXCLUDED BY COMPUTING THE AMP/SALES RATIO OF THE TAXPAYER. IT IS ALSO THE CASE OF THE TAXPAYER THAT IT HAS INCURR ED RS.66,596,787/- TOWARDS AMP EXPENSES MERELY FOR CREATING AWARENESS OF THE PRODUCT AND NOT FOR ITS BRAND BUILDING. 16. FROM THE ORDER PASSED BY THE LD. TPO/DRP/AO, IT IS UNDISPUTEDLY PROVED ON FACT THAT THE FACTS IN THE C ASE AT HAND ARE IDENTICAL TO TAXPAYERS OWN CASE FOR AY 2009-10 DEC IDED BY THE COORDINATE BENCH OF THE TRIBUNAL AND HAS NOT UNDERG ONE ANY CHANGE IN ITS BUSINESS MODEL. COORDINATE BENCH OF THE TRIBUNAL IN TAXPAYERS OWN CASE DECIDED THE ISSUE IN CONTROVERS Y IN FAVOUR OF THE TAXPAYER BY DELETING THE ALP ADJUSTMENT ON ACCO UNT OF AMP EXPENSES BY RETURNING FOLLOWING FINDINGS :- 9. ON A CAREFUL CONSIDERATION OF ALL THESE FACTORS , INCLUDING THE INCONSISTENCY IN THE APPROACH OF THE AO/TPO WITH RESPECT TO THE AMP EXPENDITURE BEING IN THE NA TURE OF AN INTERNATIONAL TRANSACTION AS EXPENDITURE INCURRE D ON BEHALF OF THE ASSESSEE, INCLUDING THE QUANTUM AND N ATURE OF EXPENDITURE AND INCLUDING LACK OF ANY MATERIAL TO S UGGEST THAT THERE WAS AN ARRANGEMENT, UNDERSTANDING OR AC TION IN CONCERT WITH RESPECT OF THE EXPENDITURE INCURRED B Y THE ASSESSEE AND INCLUDING THE FACT THAT, IN OUR CONSID ERED VIEW, THE EXPENDITURE INCURRED BY THE ASSESSEE WAS IN NAT URE OF BONAFIDE BUSINESS EXPENDITURE IN FURTHERANCE OF ITS LEGITIMATE BUSINESS INTERESTS, WE ARE OF THE CONSID ERED VIEW ITA NO.85/DEL/2015 11 THAT THERE IS NO LEGALLY SUSTAINABLE BASIS FOR THE TPO COMING TO THE CONCLUSION THAT THERE WAS AN INTERNATIONAL TRANSACTION, UNDER SECTION 92B, ON THE FACTS OF THI S CASE. IT WAS ONLY ON THE BASIS OF BRIGHT LINE TEST THAT THE IMPUGNED ALP ADJUSTMENT WAS MADE BUT THAT APPROACH HAS ALREA DY BEEN NEGATIVED BY HONBLE COURTS ABOVE. WE SEE NO R EASONS TO REMIT THE MATTER TO THE FILE OF THE TPO, AS IS P RAYED FOR BY THE LEARNED DEPARTMENTAL REPRESENTATIVE. A REMAND T O THE ASSESSMENT STAGE CANNOT BE A MATTER OF ROUTINE; IT HAS TO BE SO DONE ONLY WHEN THERE IS ANYTHING IN THE FACTS AN D CIRCUMSTANCES TO SO WARRANT OR JUSTIFY. IN ANY CASE , THERE ARE DIRECT JUDICIAL PRECEDENTS FROM HONBLE JURISDI CTIONAL HIGH COURT WHICH CLEARLY SUGGEST THAT THE MATTER RE GARDING EXISTENCE OF INTERNATIONAL TRANSACTION UNDER SECTIO N 92B, AS FAR AS POSSIBLE, SHOULD BE DECIDED AT THE LEVEL OF TRIBUNAL ITSELF. IN THE CASE OF BACARDI INDIA (SUPRA), THEIR LORDSHIPS, INTER ALIA, HAVE OBSERVED AS FOLLOWS: 5. HAVING HEARD LEARNED COUNSEL FOR THE PARTIES, THE COURT FINDS THAT THE CASE BEFORE THE ITAT WAS ARGUED AT LENGTH AND THE VIEWS OF THE TPO AS WELL A S THE DISPUTE RESOLUTION PANEL ('DRP') WERE ALREADY AVAILABLE TO THE ITAT. ARGUMENTS WERE ADVANCED ON THE STRENGTH OF JUDGMENTS OF THIS COURT IN SONY ERICSSON MOBILE COMMUNICATIONS INDIA PVT. LTD. VS. COMMISSIONER OF INCOME TAX (2015) 374 ITR 118 (DEL.) AS WELL AS A STRING OF SUBSEQUENT JUDGMENTS BEGINNING WITH MARUTI SUZUKI INDIA LTD V. CIT, (2016) 381 ITR 117. 6. NEVERTHELESS, THE MAIN REASON THAT WEIGHED WITH THE ITAT TO REMAND THE MATTER TO THE TPO WAS THAT THE TPO DID NOT HAVE THE BENEFIT OF THE ABOVE DECISIONS OF THIS COURT WHEN THE ORDER WAS INITIALL Y PASSED BY THE TPO. THAT CAN HARDLY BE A GROUND FOR REMANDING THE ENTIRE MATTER TO THE TPO. IN FACT, TH IS WAS ANTICIPATED BY THIS COURT IN SONY ERICSSON MOBILE COMMUNICATIONS INDIA PVT. LTD.(SUPRA). IN PARA 193 OF THAT JUDGMENT, IT CAUTIONED THAT THE IT AT SHOULD NOT SIMPLY REMAND THE MATTER TO THE TPO BUT EXAMINE IT ITSELF, PARTICULARLY WHEN THE FACTS HAVE ALREADY BEEN ANALYSED AND CONSIDERED AND NO NEW FACTS HAVE EMERGED IN THE MEANWHILE. 7. IN THE PRESENT CASE, ALL THE FACTS NECESSARY FOR THE ITAT TO FORM AN OPINION ON THE ISSUES BEFORE IT ITA NO.85/DEL/2015 12 CONCERNING THE AMP EXPENDITURE WERE ALREADY BEFORE IT. IN THE CIRCUMSTANCES, THE REMAND TO THE TPO OF THE ENTIRE MATTER FOR A DECISION AFRESH APPEARS TO BE UNWARRANTED. THE ASSESSEE THUS SUCCEEDS IN THIS APPEAL. 10. IN THE PRESENT CASE, NO NEW FACTS HAVE EMERGED AND ALL THE FACTS BROUGHT TO RECORD, DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, DONOT INDICATE LEGALLY SUST AINABLE BASIS FOR COMING TO THE CONCLUSION THAT THERE WAS A N INTERNAL TRANSACTION IN RESPECT OF AMP EXPENSES INC URRED BY THE ASSESSEE. WE ARE, THEREFORE, OF THE CONSIDERED VIEW THAT THE PLEA OF THE ASSESSEE, ON THE PECULIAR FACTS OF THIS CASE, DOES INDEED DESERVE TO BE UPHELD THAT THERE IS NO M ATERIAL ON RECORD TO HOLD THAT THERE WAS AN INTERNATIONAL TRAN SACTIONS, IN TERMS OF THE PROVISIONS OF SECTION 92B, NOR ANY MATERIAL HAS BEEN BROUGHT ON RECORD TO EVEN REMOTELY SUGGEST SO AND, THEREFORE, THAT THERE IS NO GOOD REASON TO REMIT TH E MATTER TO THE ASSESSMENT STAGE FOR BUILDING A CASE AFRESH. RE SPECTFULLY FOLLOWING THE BINDING JUDICIAL PRECEDENTS, WE DELET E THE IMPUGNED ALP ADJUSTMENT WHICH WAS MADE SOLELY ON TH E BASIS OF BRIGHT LINE TEST. THE PLEA OF THE LEARNED COUNSEL WAS INDEED WELL TAKEN AND MERITS ACCEPTANCE. THE IMPUGN ED ALP ADJUSTMENT OF RS.6,64,70,841, ACCORDINGLY, STAN DS DELETED. 17. FOLLOWING THE DECISION RENDERED BY THE COORDINA TE BENCH OF THE TRIBUNAL IN TAXPAYERS OWN CASE FOR AY 2009-10 AND IN VIEW OF THE DECISION RENDERED BY THE HONBLE DELHI HIGH COU RT IN SONY ERICSSON INDIA PVT. LTD. AND MARUTI SUZUKI INDIA LTD. V. CIT (SUPRA), THE REVENUE HAS FAILED TO DISCHARGE THE ON US TO PROVE THE INTERNATIONAL TRANSACTIONS BETWEEN THE TAXPAYER AND ITS AE AND ONLY THEREAFTER ALP OF INTERNATIONAL TRANSACTIONS INVOLV ING AMP EXPENSES CAN BE COMPUTED. ITA NO.85/DEL/2015 13 18. IN THE INSTANT CASE, THERE IS NOT AN IOTA OF MA TERIAL APART FROM APPLYING THE BRIGHT LINE TEST AND BY TAKING THE VIE W THAT THE TAXPAYER HAD INCURRED HUGE AMP/SALES EXPENSES TO TH E TUNE OF 18.14%, NO COGENT MATERIAL IS THERE TO TREAT THE IN CURRING OF AMP EXPENSES AS INTERNATIONAL TRANSACTION MORE PARTICUL ARLY WHEN BASIS FOR TREATING THE AMP EXPENSES AS INTERNATIONAL TRAN SACTIONS I.E. BLT IS NOT SUSTAINABLE METHOD. SO, FOLLOWING THE B INDING JUDICIAL PRECEDENTS, IMPUGNED ALP ADJUSTMENT ON ACCOUNT OF A MP EXPENSES IS ORDERED TO BE DELETED. CONSEQUENTLY, A PPEAL FILED BY THE TAXPAYER IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 9 TH DAY OF APRIL, 2019. SD/- SD/- (PRASHANT MAHARISHI) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 9 TH DAY OF APRIL, 2019 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.