LOREAL INDIA P.LTD, MUMBAI V. ASST CIT 7(1)(2), MUMBAI

ITA 963/MUM/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 0196 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 08-06-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 26-02-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: JAYANT KUMAR
• Keywords: Transfer pricing; Opportunity of being heard; International transaction; Additional evidence; Initiation of penalty proceedings; Wholly owned subsidiary; Commercial expediency
• Section: 143(3); 234B; 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL K BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA, AM AND SHRI RAM LAL NEGI, JM I.T.A. NO. 963/MUM/2016 ( ASSESSMENT YEAR: 2011 - 12 ) & CO NO. 139/MUM/2016 (ARISING OUT OF ITA NO. 1264/MUM/2016) (ASSESSMENT YEAR: 2011 - 12 ) M/S . LOREAL INDIA PRIVATE LTD., A - WING, 8 TH FLOOR, MARATHON FUTUREX, N. M. JOSHI MARG, LOWER PAREL, MUMBAI - 400 013 VS. DY. CIT 7(1)(2) ROOM NO. 130, FIRST FLOOR, AAYAKAR BHAVAN, M. K. ROAD, MUMBAI - 400 020 PAN/GIR NO. AAACL 0738 K ( ASSESSEE ) : ( R EVENUE ) I.T.A. NO. 1264/MUM/2016 (ASSESSMENT YEAR: 2011 - 12 ) DY. CIT 7(1)(2) MUMBAI - 400 020 VS. M/S. LOREAL INDIA PRIVATE LTD., PAREL, MUMBAI - 400 013 PAN/GIR NO. AAACL 0738 K ( REVENUE ) : ( ASSESSEE ) ASSESSEE BY : SHRI PEREY J. PARDIWALA/ SHR I NISHANT THAKKAR/ SHRI HITEN CHANDE & SHRI NIMESH VORA RE VENUE BY : SHRI JAYANT KUMAR DATE OF HEARING : 10.07.2018 DATE OF PRONOUNCEMENT : 11.09 .2018 O R D E R PER S HAMIM YAHYA, A. M.: THESE ARE CROSS APPEALS BY THE R EVENUE AND ASSESSEE AND C ROSS OBJECTION BY THE ASSESSEE ARISING OUT OF THE ORDER OF THE ASSESSING OFFICER PASSED U/S. 143(3) R/W S. 144C(13) OF THE INCOME TAX ACT, 1961 (THE ACT' FOR SHORT) DATED 14.01.2016 PURSUANT TO THE DIRECTION OF THE DISPUTE RESOLUTION PANEL (DRP' FOR SHO RT) DATED 28.12.2015. 2 M/S. LOREAL INDIA PRIVATE LTD. 2. THE GROUNDS RAISED IN REVENUES APPEAL READ AS UNDER: 1. 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE HON'BLE DRP IS JUSTIFIED IN HOLDING THAT THERE WAS NO INTERNATIONAL TRANSACTION WITH THE AE, THE FACT THAT T HERE WAS AN ADMITTED INTERNATIONAL TRANSACTION BY THE ASSESSEE.' 2. 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASES, THE DRP IS JUSTIFIED IN HOLDING THAT THE 'BRIGHT LINE TEST' (BLT) WAS NOT MANDATED IN LAW AND HENCE IMPERMISSIBLE WITHOUT CONS IDERING THE FACT THAT BLT WAS NOT USED AS A METHOD TO DETERMINE THE PRICE BUT ONLY AS AN ECONOMIC TOOL TO ARRIVE AT THE COST OF SERVICES RENDERED TO THE FOREIGN ENTERPRISE BY THE INDIAN ENTITY AND THE TPO HAS THE MANDATE TO 'DETERMINE' SUCH 'COST' AS A PRI MARY STEP IN ALP DETERMINATION AS PROVIDED UNDER THE RULES.' 3. 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE HON'BLE DRP WAS JUSTIFIED IN IGNORING THE PROVISIONS OF SECTION 92C(1)(B) OF THE ACT WHICH SPECIFICALLY PRESCRIBES ' ANY OTHER METHOD' FOR DETERMINATION OF ALP AS HELD BY THE HON'BLE DELHI HIGH COURT IN THE CASE OF M/S. TOLL GLOBAL FORWARDING INDIA PVT. LTD. VIDE ORDER NO. 5025/DEL/10 AND M/S. TURN RESTAURANT (I) PVT. LTD. VS. ITO - ITA NO. 349/2015 AND CIT VS. YUM RESTA URANT INDIA PVT. LTD. - ITA NO. 388/2015.' 4. 'WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE HON'BLE DRP WAS JUSTIFIED IN NOT APPRECIATING THE DISTINCTION MADE BY THE REVENUE BETWEEN NORMAL EXPENSES INCURRED FOR SELLING A PROD UCT AND THE EXPENSES INCURRED FOR PENETRATION OF THE MARKET, BRAND PROMOTION, CREATION AND DEVELOPMENT OF MARKETING INTANGIBLES, WHICH REMAIN THE FUNCTION OF THE FOREIGN SUPPLIER / LEGAL OWNER OF THE BRAND AND NOT OF THE INDIAN ENTITY.' 5. THE APPELLANT PR AYS THAT THE DIRECTIONS OF THE LD. DRP - 1, MUMBAI ON THE ABOVE GROUNDS BE SET ASIDE TO THE FILE OF THE A.O. OR CONFIRM THE ORDER OF THE AO. 3. THE ISSUE RAISED IN ASSESSEES APPEAL READ AS UNDER: 1. REFERENCE TO TPO IS WITHOUT JURISDICTION THE CIT(A) ERRED IN MAKING A REFERENCE TO THE LEARNED TPO WITHOUT RECORDING A FINDING THAT HE CONSIDERS IT 'NECESSARY OR EXPEDIENT' TO DO SO AS REQUIRED UNDER SECTION 92CA(1) OF THE ACT, HENCE THE REFERENCE MADE BY THE LEARNED AO TO LEARNED TPO SUFFERS FROM JURISDICTIONAL ERROR; 2. POWER OF TPO IN REMAND THE CIT(A) ERRED IN MAKING ALTERNATE ADJUSTMENT ON ACCOUNT PAYMENT FOR ROYALTY AND INTRA - GROUP SERVICES TO ITS AE (IN THE REMAND REPORT), WITHOUT APPRECIATING THAT THE HON'BLE DRP HAD ISSUED REMAND ONLY ON THE APPLICABILI TY OF DELHI HIGH COURT DECISION IN CASE OF SONY ERICSSON MOBILE COMMUNICATION INDIA PVT LTD IN THE FACTS OF THE PRESENT CASE, THEREBY EXCEEDING THE JURISDICTION OF REMAND; 3 M/S. LOREAL INDIA PRIVATE LTD. THE CIT(A) ERRED IN SUGGESTING ALTERNATE ADJUSTMENT IN THE REMAND PROCEEDINGS, WITHO UT APPRECIATING THAT THE INTERNATIONAL TRANSACTIONS ON ACCOUNT ROYALTY AND INTRA - GROUP SERVICES ARE INDEPENDENT TRANSACTIONS AS AGAINST ALLEGED INTERNATIONAL TRANSACTION OF AMP EXPENSES, THEREBY GROSSLY ERRED IN RECOMMENDING ALTERNATE ADJUSTMENT IN REMAND PROCEEDINGS HAVING ACCEPTED THE SAME IN THE DRAFT ORDER; 3. ENHANCEMENT DONE BY THE PRP IS BEYOND JURISDICTION THE HON'BLE DRP ERRED IN TAKING COGNIZANCE OF REMAND REPORT (WHICH WERE ISSUED BEYOND JURISDICTION) AND THEREBY PROCEEDED TO MAKE ADJUSTMENT ON ALTERNATE GROUNDS (WHICH WERE ACCEPTED AT ARM'S LENGTH BY TPO IN ORDER UNDER SECTION 92CA OF THE ACT) WITHOUT PROVIDING SUFFICIENT OPPORTUNITY/ CONSIDERING THE SUBMISSIONS MADE BY THE APPELLANT, IS BEYOND JURISDICTION AND BAD IN LAW; PART I - TRANSFER PRI CING ADJUSTMENTS 4. ADJUSTMENT IN RESPECT OF TRADEMARK ROYALTY PAID TO AE OF RS.13.49 CRORES ALP OF TRADE - MARK ROYALTY DETERMINED AT NIL THE CIT(A) ERRED IN DETERMINING THE ALP OF TRADE MARK ROYALTY AT NIL AND MAKING ADJUSTMENT OF RS.13.49 CRORES ON ACCOUN T OF TRADEMARK ROYALTY PAID TO AE; THE CIT(A) ERRED IN CONCLUDING ON THE BASIS OF FACTUAL ASSUMPTION THAT THE APPELLANT IS THE ECONOMIC OWNER OF THE INTANGIBLES AND HENCE SHOULD NOT PAY ANY TRADEMARK ROYALTY TO ITS AE; REJECTION OF TRANSFER PRICING ANALYSI S UNDER CUP THE CIT(A) ERRED IN REJECTING THE TRANSFER PRICING ANALYSIS UNDERTAKEN BY THE APPELLANT BY APPLYING CUP WITH RESPECT TO PAYMENT OF TRADEMARK ROYALTY TO AE WITHOUT PROVIDING ANY COGENT REASONS FOR THE SAME; 5. ADJUSTMENT IN RESPECT OF TECHNICAL KNOW - HOW ROYALTY PAID TO AE OF RS.17.99 CRORES THE CIT(A) ERRED IN RESTRICTING THE ALP OF TECHNICAL KNOW - HOW ROYALTY AT 3% INSTEAD OF 5% AND THEREBY MAKING ADJUSTMENT OF RS.17.99 CRORES ON ACCOUNT OF EXCESS TECHNICAL KNOW - HOW ROYALTY PAID TO AE; INAPPROPR IATE USE OF CUP THE CIT(A) ERRED IN REJECTING THE TRANSFER PRICING ANALYSIS UNDERTAKEN BY THE APPELLANT BY APPLYING CUP WITH RESPECT TO PAYMENT OF TECHNICAL KNOW - HOW ROYALTY TO AE WITHOUT PROVIDING ANY COGENT REASONS FOR THE SAME; WITHOUT PREJUDICE TO ABOV E , THE CIT(A) ERRED IN CONSIDERING THE TECHNOLOGY AGREEMENT BETWEEN L'OREAL AND MENNEN IN ISOLATION AS INTERNAL CUP FOR DETERMINING ALP OF TECHNICAL KNOW - HOW ROYALTY AT 3%, WITHOUT CONSIDERING OTHER COMPARABLE TRANSACTION AVAILABLE; 6. ADJUSTMENT IN RESPEC T OF INTRA - GROUP SERVICES AVAILED FROM AE OF RS.18.44 CRORES DETERMINING ALP OF TRANSACTION AT NIL BASED ON SURMISES AND ASSUMPTIONS 4 M/S. LOREAL INDIA PRIVATE LTD. THE CIT(A) ERRED IN MAKING AN ADJUSTMENT OF RS.18.44 CRORES TO THE TOTAL INCOME OF THE APPELLANT UNDER SECTION 92CA(3) OF T HE ACT ON ACCOUNT OF DETERMINING THE ARM'S LENGTH PRICE OF THE INTERNATIONAL TRANSACTION PERTAINING TO AVAILING OF INTRA - GROUP SERVICES AT NIL; THE CIT(A) ERRED IN MAKING CONCLUSIONS BASED ON SURMISES, ASSUMPTIONS AND REFERRING TO SOME ' FACTUAL DOCUMENT S (NOT PERTAINING TO APPELLANT), WITHOUT APPRECIATING THAT NO OPPORTUNITY WHATSOEVER WAS PROVIDED EITHER BY THE LEARNED TPO/ HON'BLE DRP BEFORE DETERMINING THE ALP AT NIL; FAILURE TO CONSIDER BENEFIT TEST WITHOUT PREJUDICE TO ABOVE, FAILED TO APPRECIATE THE BUSINESS MODEL AND BUSINESS REALITIES OF THE APPELLANT AND THE ROLE OF ITS AES AND CONCLUDING THAT THERE IS NO SIGNIFICANT BENEFIT RECEIVED BY THE APPELLANT FROM THE SERVICES BEING RENDERED BY THE AES; WITHOUT REFERRING TO TRANSFER PRICING DOCUMENTATION WHEREIN THE BENEFIT TEST WAS SUBSTANTIATED; PART II - CORPORATE TAX ADJUSTMENTS 7. NON - GRANT OF MAT CREDIT THE CIT(A) ERRED IN NON - GRANTING MAT CREDIT CLAIMED BY THE APPELLANT OF RS.3,21,99.634 / - ; 8. LEVY OF INTEREST UNDER SECTION 234B OF THE ACT THE CIT(A) ERRED IN CHARGING OF INTEREST UNDER SECTION 234B OF THE ACT; 9 . LEVY OF INTEREST UNDER SECTION 234C OF THE ACT THE CIT(A) ERRED IN CHARGING OF INTEREST UNDER SECTION 234C OF THE ACT; INITIATION OF PENALTY PROCEEDINGS UNDER SECTION 27 4 READ WITH SECTION 271(1)(C) OF THE ACT 4. THE ISSUES RAISED IN CROSS OBJECTION READ AS UNDER: 1. ERRED IN OBJECTING DISPUTE RESOLUTION PANEL ('DRP') DIRECTIONS WITHOUT APPRECIATING THAT ADVERTISING, MARKETING AND PROMOTION ('AMP') EXPENSES IS NOT AN INTERNATIONAL TRANSACTION; 2. ERRED IN OBJECTING DRP DIRECTIONS WITHOUT APPRECIATING THAT BRIG HT LINE TEST ( 'BLT) IS NOT RECOGNISED METHOD AND CANNOT BE USED TO DETERMINE THE EXISTENCE OF INTERNATIONAL TRANSACTION; 3. WITHOUT PREJUDICE TO ABOVE, THE L EARNED TRANSFER PRICING OFFICER (TPO')/DRP SHOULD BE DIRECTED NOT TO MAKE ANY SEPARATE AMP ADJUSTMENT AS EXCESS GROSS PROFIT EARNED BY RESPONDENT ADEQUATELY COMPENSATES THE RESPONDENT FOR THE ALLEGED EXCESSIVE AMP EXPENSES; 4. WITHOUT PREJUDICE TO ABOVE, THE LEARNED TPO/DRP SHOULD BE DIRECTED NOT TO MAKE ANY SEPARATE AMP ADJUSTMENT AS AMP ADJUSTED MARGIN OF RESPONDENT ARE BETTER THAN AMP ADJUSTED MARGIN OF ITS COMPARABLES; 5 M/S. LOREAL INDIA PRIVATE LTD. 5. WITHOUT PREJUDICE TO ABOVE, THE LEARNED TPO/DRP SHOULD BE DIRECTED TO CONSIDE R THE FOLLOWING EXPENSES AS SELLING EXPENSES AND NOT PART OF AMP EXPENDITURE WHILE COMPUTING THE ADJUSTMENT: MARKETING PROMOTIONS RUN AT MALLS AND RETAIL SITE OUTLET ON VARIOUS OCCASIONS CUSTOMER RELATIONS MAINTENANCE EXPENSES AND SALES PROMOTER SALARY EXPENSES TOWARDS POINT OF SALES MATERIALS RENT COST OF HIRING SPACES AT VARIOUS POINT OF SALES EXPENSES INCURRED IN RESPECT OF PRODUCT ANIMATION, TRAINING AND SIMULATION EXPENSES RELATING TO MARKET RESEARCH MARKETING FEES PAID TO AE 6. WITHOU T PREJUDICE TO ABOVE, THE LEARNED TPO/DRP SHOULD BE DIRECTED TO CONSIDER FOLLOWING COMPANIES AS COMPARABLE COMPANIES FOR DETERMINING BLT FOR AMP EXPENSES; MANUFACTURING SEGMENT: GILETTE INDIA LIMITED PROCTER & GAMBLE HOME PRODUCTS PROCTER & GAMBLE HYGIENE AND HEALTHCARE LIMITED HENKEL INDIA LIMITED RECKITT BENCKISER (INDIA) LIMITED ZYDUS WELLNESS LTD VLCC PERSONAL CARE LTD. PARAS PHARMACEUTICALS LTD. BAJAJ CORP LTD. SITARAM AYURVEDA PHARMACY LTD. DISTRIBUTION SEGMENT LOTUS HERBALS LTD. MEDICARE LTD. WIN - MEDICARE LTD. VLCC HEALTHCARE LTD. ELDER HEALTH CARE LTD. FACES COSMETICS INDIA PVT. LTD ; 7. WITHOUT PREJUDICE TO ABOVE, THE LEARNED AO/DRP SHOULD BE DIRECTED TO REJECT FOLLOWING COMPANIES AS THEY ARE NOT COMPARABLE COMPANIES FOR DETERMINING BLT F OR AMP EXPENSES; DABUR INDIA LIMITED . JYOTHY LABORATORIES LIMITED 8. WITHOUT PREJUDICE TO ABOVE, THE LEARNED AO/DRP SHOULD BE DIRECTED TO REJECT THE CHERRY PICKING APPROACH AND ALSO CONSIDER FOLLOWING COMPARABLES SUBMITTED BY RESPONDENT FOR APPLYING MA RK - UP FOR THE ALLEGED MARKETING FUNCTIONS; . ' '. ALTERNATE BRAND SOLUTIONS (INDIA) LIMITED ADITYA BIRLA MINACS WORLDWIDE LIMITED GAUR & NAGI LIMITED VISION TECHNOLOGY INDIA LIMITED 6 M/S. LOREAL INDIA PRIVATE LTD. 5. THE ASSESSEE IS A PRIVATE LIMITED COMPANY INCORPORATED IN INDIA WHI CH IS A WHOLLY OWNED SUBSIDIARY OF LOREAL S. A. FRANCE. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND DISTRIBUTION OF COSMETICS AND BEAUTY PRODUCTS. IN THE TR ANSFER P RICING ORDER, THE TRANSFER PRICING OFFICER (TPO FOR SHORT) OBSERVED THAT L OREAL INDIA HAS ACTED AS A DISTRIBUTOR OF COSMETIC PRODUCTS THAT ARE NOT MANUFACTURED BY IT. IT WAS NOTED THAT LOREAL INDIA PURCHASED FINISHED PRODUCTS FROM ITS OVERSEAS A SSOCIATED E NTERPRISES (AE FOR SHORT) AND RESELLS THE SAME IN THE INDIAN MARKET WI THOUT ANY VALUE ADDITION. THE ASSOCIATED ENTERPRISE IS A LOREAL GROUP WHICH IS A FRENCH CONGLOMERATE. AS PER THE TRANSFER PRICING ADJUSTMENT REPORT, THE ASSESSEE COMPANY HAD ENTERED INTO WITH FOLLOWING INTERNATIONAL TRANSACTIONS WITH ITS AES: NATURE OF T RANSACTION VALUE OF INTERNATIONAL TRANSACTION (RS.) IMPORT OF RAW MATERIAL / PACKING MATERIAL FOR MANUFACTURE OF FINISHED GOODS 96,222,828 EXPORT OF RAW MATERIAL / PACKING MATERIAL FOR MANUFACTURE OF FINISHED PRODUCTS 120,394 IMPORT OF FINISHED GOODS F OR RESALE IN INDIA 525,349,576 EXPORT OF FINISHED GOODS MANUFACTURED BY L'OREAL INDIA 1,001,228,856 RENDERING EVALUATION AND TECHNICAL TESTING SERVICES 7,645,866 ROYALTY PAYMENTS FOR USE OF TECHNICAL KNOW - HOW,BRAND NAME, TRADEMARK, ETC. 584,766,594 AVAILING MARKETING SUPPORT SERVICES 184,491,457 AVAILING CONSULTANCY SERVICES 26,100,995 IMPORT OF FIXED ASSETS 1,987,666 REIMBURSEMENT OF EXPENSES (RECEIPTS) 44,707,919 REIMBURSEMENT OF EXPENSES (PAYMENTS) 105,533,065 7 M/S. LOREAL INDIA PRIVATE LTD. 6. THE ARM'S LENGTH PRICE OF TH E INTERNATIONAL TRANSACTIONS IN THE MANUFACTURING SEGMENT AND IN THE DISTRIBUTION SEGMENT IS DETERMINED BY APPLYING COST PLUS METHOD AND THE RE SALE PRICE METHOD RESPECTIVELY, WHICH IS STATED TO BE THE MOST APPROPRIATE METHOD IN THE FACTS AND CIRCUMSTANCES OF THE CASE. THE GROSS MARGIN TO SALES RATIO IS TAKEN AS THE PROFIT LEVEL INDICATOR (PLI) IN THE MANUFACTURING SE GMENT AND DISTRIBUTION SEGMENT. IN THE MANUFACTURING SEGMENT, THE PLI OF THE COMPANY IS ARRIVED AT 168.16% ON INPUT COST WHEREAS THE AVERAGE P LI OF THE COMPARABLES IS ARRIVED AT 129.35% AS PER THE ANALYSIS IN THE TP DOCUMENT. IT IS SEEN THAT THE PLIS OF THE COMPARABLE COMPANIES HAVE BEEN WORKED OUT BY ADOPTING THE DATA FOR THE YEAR 2010 - 11. AS THE PRICE CHARGED IN ITS INTERNATIONAL TRANSACTIONS IS GREATER THAN THE SAID ARITHMETICAL MEAN PRICE, THE PRICE CHARGED IN THE INTERNATIONAL TRANSACTIONS IS TREATED AS AT ARM'S LENGTH. 7. IN THE DISTRIBUTION SEGMENT, THE PLI OF THE COMPANY IS ARRIVED AT 54.88% ON SALES WHEREAS THE AVERAGE PLI OF THE COMPAR ABLES IS ARRIVED AT 40.78% AS PER THE ANALYSIS IN THE TP DOCUMENT. IT IS SEEN THAT THE PLIS OF THE COMPARABLE COMPANIES HAVE BEEN WORKED OUT BY ADOPTING THE DATA FOR THE YEAR 2010 - 11. AS THE PRICE CHARGED IN ITS INTERNATIONAL TRANSACTIONS IS GREATER THAN T HE SAID ARITHMETICAL MEAN PRICE, THE PRICE CHARGED IN THE INTERNATIONAL TRANSACTIONS I S TREATED AS AT ARM'S LENGTH. THE TAXPAYER SELECTED COMPANIES AS COMPARABLES ON THE BASIS OF THE SEARCH CONDUCTED IN THE PUBLIC DATA BASE, PROWESS. 8. DURING THE YEAR UN DER CONSIDERATION L'OREAL INDIA HAS PAID ROYALTY FOR THE EXCLUSIVE RIGHT TO MANUFACTURE AND DISTRIBUTE THE LICENSED PRODUCTS USING THE TECHNOLOGY AND T RADEMARKS TO ITS OVERSEAS ASSOCIATED ENTERPRISES IN ACCORDANCE WITH THE 8 M/S. LOREAL INDIA PRIVATE LTD. AGREEMENT ENT ERED INTO BY L'OREAL INDIA WITH ITS ASSOCIATED ENTERPRISES. AS PER THE ASSESSEE CO MPANY, L'OREAL S.A. GRANTS ITS GROUP COMPANIES THROUGHOUT THE WORLD THE EXCLUSIVE RIGHT AND LICENSE TO EXPLOIT THE LICENSED PRODUCTS IN ITS TERRITORY, INCLUDING: THE RIGH TS TO MANUFACTURE THE LICENSED PRODUCTS IN ITS TERRITORY, USING LICENSE TECHNOLOGY, TRADEMARKS AND DESIGNS THE RIGHT TO IMPORT AND DISTRIBUTE THE LICENSED PRODUCTS. AS THE INTERNATIONAL TRANSACTIONS TAKE INTO ACCOUNT BOTH THE SEGMENTS THAT I S MANUFACT URING SEGMENT AND DISTRIBUTION SEGMENT, THE TRANSFER PRICING ANALYSIS HAS BEEN UNDERTAKEN INDEPENDENTLY IN RESPECT OF BOTH THE SEGMENTS BY THE ASSESSEE COMPANY . 9. WHILE CONSIDERING THE INTERNATIONAL TRANSACTION RELATING TO MANUFACTURING SEGMENT, THE TPO OBSERVED THAT LOREAL INDIA HAS IMPORTED RAW MATERIALS, PACKING MATERIALS WHICH ARE USED TO MANUFACTURE FINISHED GOODS, WHICH ARE THEN SUBSEQUENTLY SOLD IN THE INDIAN MARKET. HE OBSERVED THAT BRAND INTANGIBLE IS A MAJOR FACTOR DRIVING REVENUES IN COSMETIC SECTOR. HE NOTED THAT TAX PAYER IS NOT THE OWNER OF THE BRAND WHICH IT IS CREATING IN INDIA BY SPENDING HUGE AMOUNTS OF ADVERTISEMENT AND MARKETING EXPENSES IN INDIA. HE NOTED THAT ON NET SALES OF RS.1182.17 CRORES FOR THE FINANCIAL YEAR (F.Y. FOR SHORT) 2 010 - 11, LOREAL INDIA SPENT AN AMOUNT OF RS.392.85 CRORES ON ADVERTISEMENT, MARKETING AND PROMOTION. THE TPO OBSERVED THAT HOWEVER NO COMPANY WOULD AGREE TO DEVELOP AN INTANGIBLE WITHOUT ASKING FOR OWNERSHIP IN THE INTANGIBLE THAT IS CREATED OR ENHANCED BY IT. THAT BY SPENDING HUGE AMOUNTS ON ADVERTISEMENT AND MARKETING, LOREAL INDIA IS ENHANCING THE BRANDS LOREAL, GARNIER AND OTHERS IN INDIA. THE TPO REJECTED THE ASSESSEES SUBMISSION THAT AMP EXPENSES ARE PAYMENTS TO THIRD PARTIES IN INDIA AND HENCE NOT AN INTERNATIONAL TRANSACTION. THE TPO FURTHER REJECTED THE ASSESSEES RELIANCE 9 M/S. LOREAL INDIA PRIVATE LTD. UPON SEVERAL DECISIONS OF THE ITAT TO CONTEND THAT AMP EXPENDITURE INCURRED BY THE ASSESSEE FOR THE PRODUCT SOLD BY IT IN INDIA, DO NOT RESULT IN ANY KIND OF DIRECT BENEFIT TO ITS FOREIGN AFFILIATES. THE TPO FURTHER REFERRED TO THE DECISION OF THE SPECIAL BENCH OF THE ITAT IN THE CASE OF L G ELECTRONICS LTD. 152 TTJ (DEL)(SB) 273 AND HELD THAT THE ASSESSEES RELIANCE ON TRIBUNALS ORDER IS NO LONGER RELEVANT. THE ASSESSING O FFICER (A.O. FOR SHORT) PROCEEDED TO COMPUTE THE AMP EXPENSES AND MARK UP THEREON TO BE COVERED FROM THE AE. HE PROCEEDED TO COMPUTE A SUM OF RS.1,90,23,50,373/ - AS AN ADJUSTMENT TOWARDS AMP ON THE ADVERTISEMENT EXPENDITURE INCURRED BY THE ASSESSEE FOR THE BRAND OWNED BY THE AE FOR THE MANUFACTURE SEGMENT. HOWEVER, HE COMPUTED AN AMOUNT OF RS.53,34,40,068/ - AS ADJUSTMENT TOWARDS AMP EXPENDITURE ON ADVERTISEMENT EXPENDITURE INCURRED BY THE ASSESSEE FOR THE BRAND OWNED BY THE AE FOR DISTRIBUTION SEGMENT. THE TPO'S SUMMARY IS AS UNDER: IN VIEW OF THE DISCUSSION ABOVE, THE TRANSFER PRICING OFFICER IS PROPOSING TO APPLY BRIGHT LINE METHOD AND THE ADJUSTMENT TO ARMS LENGTH PRICE IS DETERMINED AT RS.243,57,90,441/ - . THUS, AN AMOUNT OF RS.243,57,90,441/ - IS TREATE D AS AN ADJUSTMENT UNDER SECTION 92CA OF THE INCOME TAX ACT, 1961 BEING SHORTFALL IN THE COMPENSATION THAT THE ASSESSEE COMPANY SHOULD HAVE BEEN RECEIVED FROM ITS AE. 10. AGAINST THE ABOVE ORDER, THE ASSESSEE FILED OBJECTIONS BEFORE THE DRP. 11. CONSI DERING THE OBJECTIONS OF THE ASSESSEE, THE DRP TOOK NOTE OF THE JUDGMENT OF THE HON'BLE DELHI HIGH COURT DECISION IN THE CASE OF SONY ERICSSON MOBILE COMMUNICATIONS INDIA PVT. LTD VS. DY. CIT [2015] 374 ITR 118 (DELHI). THE TPO WAS DIRECTED TO EXAMINE THE FACTS OF THE CASE AFRESH IN VIEW OF THE SAID JUDGMENT OF DELHI 10 M/S. LOREAL INDIA PRIVATE LTD. HIGH COURT AND DETERMINE THE ADJUSTMENT ON ACCOUNT OF AMP ADJUSTMENT VIDE DRP LETTER DATED 19.11.2015. THE SAID L ETTER R EADS AS UNDER: '2. IN THIS CASE AS PER TP ORDER DATED 27.01.2015, TP ADJUSTMENT OF RS. 53.34 CRORES HAS BEEN MADE. THE ADJUSTMENT INCLUDES AMP EXPENSES ETC. 2.1. WHILE MAKING THE AMP ADJUSTMENT, BIT HAS BEEN APPLIED AND THEREAFTER THE EXCESS AMP EXPENSES HAVE BEEN DETERMINED AT RS. 49.04 CRORES. MARK - UP OF 8.41% HAS BEEN ADDED FOR THE SERVICES TO THE AE REGARDING EXCESSIVE AMP EXPENSES. 2.2. SUBSEQUENTLY, DELHI HIGH COURT IN THE CASE OF SONY ERICSSON MOBILE 'COMMUNICATION INDIA PVT. LTD. IN THEIR ORDER DATED 16.03.2015 HAVE INTER - ALIA HELD THAT BIT IS NOT APPROPRIATE MET HOD TO BENCH MARK AMP TRANSACTIONS. FURTHER HIGH COURT HAS ALSO HELD THAT AMP ANALYSIS IN THE CASE OF DISTRIBUTOR WOULD BE DIFFERENT FROM THE AMP ANALYSIS IN CASE OF A MANUFACTURER. 2.3. THE ASSESSEE IS A DISTRIBUTOR AND ALSO A MANUFACTURER. APPLYING DEL HI HIGH COURT DECISION, BIT CANNOT BE APPLIED. I, THEREFORE, REQUEST YOU TO EXAMINE THE AMP TRANSACTION IN THE LIGHT OF DELHI HIGH COURT DECISION AND RECOMPUTE THE ADJUSTMENT AND GIVE YOUR REPORT BY 30.11.2015. 3. IT MAY KINDLY BE NOTED THAT THIS MATT ER/GETS TIME BARRED ON 31.12.2015. THEREFORE, THE REPORT MAY BE PROVIDED LATEST BY 30.11.2015.' THE CONCLUSION OF THE TPOS RESPONSE WAS NOTED BY THE DRP WHICH ARE AS UNDER: CONCLUSION : THE ADJUSTMENT PROPOSED BY THE TPO IN HIS ORDER U/S.92CA FOR THIS Y EAR MAY BE UPHELD AS THE REVENUE HAS NOT ACCEPTED THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF SONY ERICSON REGARDING REJECTION OF BLTAND SLP HAS BEEN FILED AGAINST THE SAID DECISION BEFORE THE SUPREME COURT. 2. IN CASE, THE HON'BLE DRP I S OF THE VIEW THAT THE TRANSACTION OF AMP EXPENDITURE INCURRED BY THE ASSESSEE IS AN INTERNATIONAL TRANSACTION AND, THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF SONY ERICSON IS APPLICABLE BOTH TO THE MANUFACTURING AND THE DISTRIBUTION SEGMENT, A ND IF BIT IS TO BE REJECTED AND AGGREGATE APPROACH IS TO BE FOLLOWED THEN, AN ADJUSTMENT OF RS.22.03 CRORE FOR THE DISTRIBUTION SEGMENT AND RS.98.32FORTHE MANUFACTURING SEGMENT MAY BE UPHELD. 3. IN CASE, THE HON'BLE DRP IS OF THE VIEW THAT THE TRANSACTIO N OF AMP EXPENDITURE INCURRED BY THE ASSESSEE IS AN INTERNATIONAL TRANSACTION AND, THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF SONY ERICSON IS APPLICABLE ONLY TO THE DISTRIBUTION SEGMENT, AND IF BLT IS TO BE REJECTED AND AGGREGATE APPROACH IS T O BE FOLLOWED THEN, AN ADJUSTMENT OF RS.22.03 CRORE FOR THE DISTRIBUTION SEGMENT MAY BE UPHELD. IN ADDITION THE ALTERNATIVE SUBMISSION FOR DISALLOWANCE OF RS.31,48,74,320/ - OUT OF ROYALTY AND RS.18.44 CRORES OUT OF INTRA GROUP SERVICES TOWARDS AVAILING MARKET SUPPORT SERVICES MAY BE CONSIDERED. 11 M/S. LOREAL INDIA PRIVATE LTD. 12. THE DRP ALSO OBTAINED RESPONSE OF THE ASSESSEE IN THIS REGARD. THEREAFTER , THE DRP REFERRED TO VARIOUS CASE LAWS INCLUDING THAT FROM HON'BLE DELHI HIGH COURT DECISION IN THE CASE OF MARUTI SUZUKI INDIA LTD . (IN ITA NO. 110/2014) DATED 11.12.2015 AND IN THE CASE OF BAUSCH & LOMB EYECARE (INDIA) PVT. LTD. AT 23.12.2015. THE DRP CONCLUDED AS UNDER: 3.20. WE ALSO FIND THAT DELHI HIGH COURT HAVE PASSED SIMILAR ORDER IN THE CASE OF WHIRLPOOL OF INDIA LTD. ON 22 N D DECEMBER, 2015. ON THE BASIS OF ALL THESE JUDGMENTS OF DELHI HIGH COURT, IT EMERGES THAT UNLESS THERE EXIST AN AGREEMENT OR ARRANGEMENT OR UNDERSTANDING BETWEEN THE ASSESSEE AND ITS AE FOR AMP EXPENSES, ANY INTERNATIONAL TRANSACTION CANNOT BE SAID TO HAV E BEEN UNDERTAKEN. ! BRIGHT LINE TEST HAS NO STATUTORY SANCTION TO BENCHMARK ANY INTERNATIONAL TRANSACTION INCLUDING AMP. SINCE ON FACTS OF THIS CASE IT CANNOT BE SAID THAT THERE EXIST ANY AGREEMENT OR UNDERSTANDING OR ARRANGEMENT BETWEEN THE ASSESSEE AND THE AE AND THE TPO HAS NOT SHOWN ANYTHING EXCEPT BLT TO BENCHMARK THE ALLEGED EXCESS AMP EXPENSES, THE ADJUSTMENT MADE BY THE TPO IN THIS REGARD IS THEREFORE DIRECTED TO BE DELETED. THE OBJECTIONS OF THE ASSESSEE IN THIS RESPECT ARE THEREFORE DIRECTED TO B E DELETED. THE OBJECTIONS OF THE ASSESSEE IN THIS RESPECT ARE THEREFORE ACCEPTED. 13. THE DRP FURTHER NOTED THAT THE TPO IN HIS REPORT DATED 17.12.2015 HAD ALSO MADE ALTERNATE CONTENTIONS WHICH WERE WITH RELATIONS TO DISALLOWANCE OF RS.31,48,74,320/ - OUT OF ROYALTY OF RS.18.44 CRORES OUT OF INTRA GROUP SERVICES TOWARDS AVAILING SUPPORT SERVICES. IN THIS REGARD, THE DRP NOTED THAT THE ASSESSEE HAS C HALLENGED THE JURISDICTION OF TPO TO EXAMINE THE ISSUE OF ROYALTY, INTRA GROUP SERVICES AND OTHER INTERNATIONA L TRANSACTION IN PURSUANCE TO A REMAND BY THE DRP ON THE AMP ISSUE. BUT THE DRP HELD THAT REGARDING THE ROYALTY AND INTRA GROUP SERVICES, THE TPO HAD GIVEN FRESH INFORMATION TO THE PANEL WHICH HE WAS EMPOWERED . SUBSEQUENTLY, THE DIRECTIONS OF THE DRP IN TH IS REGARD ARE AS UNDER: 12 M/S. LOREAL INDIA PRIVATE LTD. REGARDING THE TRADEMARK ROYALTY, WE HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSIONS MADE BY THE ASSESSEE ON 23.12.2015. WE AGREE WITH THE TPO THAT THERE IS NO REASON FOR PAYMENT OF TRADEMARK ROYALTY ON FACTS OF THE CASE. THER EFORE THE.AO IS DIRECTED TO MADE ADJUSTMENT ON ACCOUNT OF TRADEMARK ROYALTY AS PR OPOSED BY TPO OF RS. 13,49,46,1 37/ - @ 1.5% OF SALES. WE FIND THAT THE MENNEN AGREEMENT IS AN INTERNAL CUP FOR KNOW - HOW ROYALTY. THOUGH AGREEMENT WAS ENTERED IN F.Y. 2005 - 06 B UT IT IS STILL A VALID AGREEMENT AND ACTED ON BY THE PARENT OF THE ASSESSEE, THEREFORE WE ARE OF THE CONSIDERED OPINION THAT ROYALTY @ 3% CHARGED BY THE PARENT TO MENNEN IS A VALID INTERNAL CUP AVAILABLE TO BENCHMARK THE ROYALTY PAID BY THE ASSESSEE. ACCOR DINGLY EXCESS ROYALTY PAID OF RS. 17,99,28,183/ - IS ALSO DIRECTED TO BE DISALLOWED AS TP ADJUSTMENT FOR TECHNICAL KNOW - HOW ROYALTY. WE HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSIONS MADE. BEFORE THE PANEL ALSO, THE ASSESSEE HAS NOT SUBMITTED ANY EV IDENCE IN SUPPORT OF RENDITION OF SERVICES BY THE AE AND RECEIVES OF THE SERVICES BY THE ASSESSEE. THEREFORE ALP OF SUCH SERVICES IN ABSENCE OF EVIDENCE HAS TO BE DETERMINED AT RS. NIL. THE A.O. IS DIRECTED ACCORDINGLY. 14. THE DRP CONCLUDED AS UNDER: IN VIEW OF THE JUDICIAL PRECEDENTS AS WELL AS THE FACTS ON RECORD, WE ARE OF THE VIEW THAT THE ASSESSEE HAS FAILED TO DEMONSTRATE THAT IT HAS RECEIVED SERVICES OR THAT IT BENEFITED FROM SUCH SERVICES AS CLAIMED OR THAT THE SERVICES WERE PROVIDED. IT HAS FURT HER FAILED TO DEMONSTRATE THE INCURRENCE OF COST BY THE AE AS WELL AS ITS ALLOCATION AMONG THE VARIOUS GROUP ENTITIES. WE ARE OF THE VIEW THAT THE TPO HAS NOT QUESTIONED THE COMMERCIAL EXPEDIENCY OF SUCH TRANSACTION ENTERED INTO BY THE ASSESSEE, RATHER, H AS ONLY WORKED OUT THE ARMS LENGTH PRICE OF THE PURPORTED SERVICE. WE ARE FURTHER OF THE VIEW THAT NO SERVICES ARE RENDERED NOR RECEIVED BY THE ASSESSEE AND WHAT IS RECEIVED (IF AT ALL) DO NOT TAKE CHARACTER OF CHARGEABLE SERVICE. THE PERUSAL OF THE E - MAIL S AND OTHER CONTEMPORANEOUS RECORD ONLY GOES TO SHOW THAT INCIDENTAL AND PASSIVE ASSOCIATION BENEFITS HAVE BEEN PROVIDED BY THE AE. IN THIS VIEW OF THE MATTER, THERE COULD NEITHER BE ANY COST CONTRIBUTION OR PAYMENT FOR SUCH SERVICE TO THE AE. FURTHER, AS NO EXPENDITURE WOULD HAVE BEEN INCURRED, THERE IS NO NECESSITY TO APPLY A PARTICULAR METHOD TO ARRIVE AT SUCH CONCLUSION. THE TPO HAS BEEN MORE THAN FAIR IN GRANTING THE DEDUCTION ON ESTIMATES BASED ON THE EVIDENCE PRODUCED. THEREFORE, THE AO IS DIRECTED T O MAKE TP ADJUSTMENT OF RS. 18.44 CRORES ON ACCOUNT OF INTRA - GROUP SERVICES. 15. AGAINST THE ABOVE ORDER, CROSS APPEALS HAVE BEEN FILED . THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT REGARDING AMP , THE ISSUE IS COVERED BY THE DECISION OF THE 13 M/S. LOREAL INDIA PRIVATE LTD. HON'BLE DELH I HIGH COURT DECISION IN THE CASE OF SONY ERICSON MOBILE COMMUNICATIONS (INDIA) PVT. LTD. (SUPRA) AND ALSO IN ASSESSEES OWN CASE BY ITAT . HE FURTHER RELIED UPON THE DECISION OF HON'BLE DELHI HIGH COURT DECISION IN THE CASE OF MARUTI SUZUKI INDIA LTD. (SU PRA) AND WHIRLPOOL OF INDIA LTD . (IN ITA NO. 610/2014) . 16 . UPON HEARING BOTH THE COUNSEL AND PERUSING THE RECORDS. WE FIND IN R EVENUE S APPEAL , THE ISSUE RAISED PERTAINS TO THE DELETION OF INTERNATIONAL TRANSACTION ADDITION CONSISTING OF AMP TRANSACTION BY THE TRANSFER PRICING OFFICER FOLLOWING THE DECISION BY ITAT IN ASSESSEE'S OWN CASE AND ALSO DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF SONY ERICSON MOBILE COMMUNICATIONS (INDIA) PVT. LTD. (NOW KNOWN AS SONY INDIA LTD.) V. CIT [2015] 374 ITR 118 (DELHI) , MARUTI SUZUKI INDIA LTD. VS. ACIT [2016] 381 ITR 117 (DEL) AND WHIRLPOOL OF INDIA LTD (SUPRA) . SINCE THE DRP'S DIRECTION IS SUPPORTED BY THE HONBLE HIGH CO URT S DECISION, WE DO NOT FIND ANY INFIRMITY IN THE SAME. HENCE, THE REVENUES APPEAL IS DISMISSED. 17. AS REGARDS THE ASSESSEES APPEAL, ONE ISSUE RELATES TO POWER OF TRANSFER PRICING OFFICER TO SUGGEST ALTERNATIVE THAN THAT ASKED BY THE DRP IN REMAND. IN THIS REGARD, THE LD. COUNSEL OF THE ASSESSEE HAS REFERRED TO CASE LAW FROM THE HONBLE ALLAHABAD HIGH COURT FOR THE JURISDICTION OF REMAND PROCEEDINGS . HOWEVER, WE NOTE THAT THIS DECISION I S WITH REFERENCE TO THE WEALTH TAX ACT AND IS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. FURTHERMORE, THE LD. DEPARTMENTAL REPRESENTATIVE ALSO REFERRED TO PARAGRAPH 191 OF SONY ERICSON MOBILE COMMUNICATIONS ( INDIA) PVT. LTD. ORDER WHERE IN THE HONBLE HIGH COURT 14 M/S. LOREAL INDIA PRIVATE LTD. HAD HELD THAT OTHER ISSUES ARE ALSO RELEVANT. THE HO NBLE HIGH COURT HAS OBSERVED AS UNDER: 191 THE FACT THAT ROYALTY HAS BEEN PAID WOULD BE A RELEVANT CONSIDERATION AND FACTUM, WHEN WE CONSIDER ARMS LENGTH PRICE OF THE INTERNATIONAL TRANSACTION OF DISTRIBUTION AND MARKETING. TAX TREATMENT OF ROYALTY PAYME NTS BEING DIFFERENT, THE ROYALTY TRANSACTION, THEREFORE, MAY BE BENCHMARKED SEPARATELY. HOWEVER, PAYMENT OF ROYALTY EVEN IF JUSTIFIED AND APPROPRIATE ON APPLYING ARMS LENGTH PRINCIPLE, CAN BE A RELEVANT FACTOR WHEN THE QUESTION OF COMPENSATION OF THE DOME STIC AE FOR UNDERTAKING DISTRIBUTION AND MARKETING FUNCTIONS ARISES FOR CONSIDERATION. 18. IN THIS REGARD, THE LD. D R SUBMITTED THAT WHAT THE T P O HAS DONE IS TO EXAMINE THE ISSUE ON THE TOUCHSTONE OF THIS DECISION WHICH WAS THE DIRECTION OF THE DRP. 1 9 . UPON CAREFUL CONSIDERATION OF THE ABOVE CASE LAW, WE ARE INCLINED TO REJECT THE ASSESSEES SUBMISSION THAT THE TPO HAS NO JURISDICTION TO SUGGEST ALTERNATIVE. HOWEVER, IN THIS REGARD, THE LD. COUNSEL OF THE ASSESSEE HAS URGED THAT PROPER OPPORTUNITY WAS NOT GRANTED TO CONTEST THE ALTERNATIVE ADDITION SUGGESTED BY THE TRANSFER PRICING OFFICER AND SUSTAINED BY THE DRP. HENCE , THE LD. COUNSEL OF THE ASSESSEE HAS REQUEST ED TO SEND THE ISSUE ON MERITS OF ALTERNATIVES TO THE DISPUTE RESOLUTION PANEL. THE LD. CO UNSEL OF THE ASSESSEE HAS ALSO SUBMITTED TWO LETTERS FOR ADMISSION OF ADDITIONAL EVIDENCE BEFORE THE DRP IN CONNECTION WITH THE ALTERNATIVE WHICH HAS BEEN CLAIMED TO HAVE NOT BEEN CONSIDERED. HE PRAYED THAT T HE MATTER MAY BE REMITTED TO THE DRP TO GIVE PRO PER OPPORTUNITY OF BEING HEARD. 20 . ALTHOUGH NO SPECIFIC GROUND HAS BEEN RAISED . T HERE WAS AN ALTERNATIVE ADDITION SUGGESTED BY THE TRANSFER PRICING OFFICER RELATING TO DISTRIBUTION EXPENSE WHICH HAS NOT BEEN DISCUSSED BY THE DISPUTE RESOLUTION PANEL . HO WEVER , THE LEARNED COUNSEL OF THE 15 M/S. LOREAL INDIA PRIVATE LTD. ASSESSEE SUBMITTED THAT SINCE THE DISPUTE RESOLUTION PANEL HAS HELD THAT THERE IS NO INTERNATIONAL TRANSACTION, IT IS TO BE UNDERSTOOD THAT THIS ISSUE HAS BEEN CONSIDERED BY THE DISPUTE RESOLUTION PANEL. 2 1 . UPON CAREFU L CONSIDERATION, WE ADMIT THE SUBMISSION OF THE LD. COUNSEL OF THE ASSESSEE THAT PROPER OPPORTUNITY WAS NOT GIVEN TO THE ASSESSEE TO MAK E THE SUBMISSIONS ON THE ALTERNATIVES. HOWEVER, W E ALSO DO NOT AGREE WITH THE LD. COUNSEL OF THE ASSESSEE THAT SINCE ON ONE OF THE ALTERNATIVE, THE DRP'S DIRECTION IS SILENT, IT CAN BE UNDERSTOOD THAT THIS ISSUE HAS BEEN CONSIDERED BY THE DRP. HENCE, WE REMIT THESE ISSUES ON THE ALTERNATIVE SUGGESTED BY THE TPO TO THE DRP. THE DRP SHALL CONSIDER THE SAME AFTER GIVING THE AS SESSEE AN OPPORTUNITY OF BEING HEARD. THE LD. COUNSEL OF THE ASSESSEE HAS FAIRLY AGREED TO THE ABOVE PROPOSITION. 22. IN VIEW OF THE ADJUDICATION ON THE CROSS APPEAL S , THE CROSS OBJECTION HAS BECOME IN FRUCTUOUS . THE SAME IS DISMISSED AS SUCH. 21. IN THE RESULT, THE REVENUES APPEAL IS DISMISSED AND THE ASSESSEES APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. THE CROSS OBJECTION OF THE ASSESSEE STAND S DISMISSED AS INFRUCTUOUS. ORDER PRONOUNCED IN THE OPEN COURT ON 11.09.2018 SD/ - SD/ - ( RAM LAL NE GI ) (S HAMIM YAHYA) J UDICIAL MEMBER A CCOUNTANT MEMBER MUMBAI ; DATED : 11.09.2018 ROSHANI , SR. PS 16 M/S. LOREAL INDIA PRIVATE LTD. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. T HE CIT(A) 4. CIT - CONCERNED 5. DR, ITAT, MUMBAI 6. GUARD F ILE BY ORDER, (DY./ASSTT. REGISTRAR) ITAT, MUMBAI