NATIONAL E-ASSESSMENT CENTRE/ DY CIT-CIRCLE-7(1)(1), MUMBAI V. L' OREAL INDIA P. LTD., MUMBAI

MA 60/MUM/2023

AI Insights

The case involves the Income Tax Department (Revenue) and M/s. L'Oreal India Pvt. Ltd., concerning transfer pricing adjustments related to Advertisement, Marketing, and Promotional (AMP) expenses for the Assessment Year 2016-17. The Revenue filed a Miscellaneous Application claiming a mistake apparent from the record in the Tribunal's earlier decision, which had deleted the secondary adjustment contrary to decisions in previous assessment years. Both parties agreed that a typographical error existed in the Tribunal's order, which omitted mentioning A.Y. 2017-18 in the context of the primary adjustment decision. The Tribunal acknowledged the error and corrected it, restoring the secondary adjustment to the Assessing Officer's file.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 136441 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 25 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 11-06-2023
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: K
• Next Hearing Date: 20-04-2023
• Assessment Year: 2016-2017
• Appeal Filed On: 17-01-2023
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: NAYANA KRISHNAKUMAR
• Keywords: Transfer pricing

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI ‘K’ BENCH, MUMBAI. Before Shri B.R. Baskaran (AM) & Shri Rahul Chaudhary (JM) M.A. No. 60/Mum/2023 I.T.A. No. 1198/Mum/2021 (A.Y. 2016-17) DCIT-7(1)(1) Room No. 126 1 st Floor Aayakar Bhavan M.K. Road Mumbai-400 020. Vs. M/s. L’Oreal India Pvt. Ltd. A Wing, 8 th Floor Marathon Futurex, N.M. Joshi Marg, Lower Parel Mumbai-400 013. PAN : AAACL0738K (Appellant) (Respondent) Assessee by Shri Niraj Sheth Department by Ms. Nayana Krishnakumar Date of Hearing 21.04.2023 Date of Pronouncement 12.06.2023 O R D E R Per B.R.Baskaran (AM) :- The Revenue has filed this Miscellaneous Application submitting that there is mistake apparent from record in the order dated 29.6.2022 passed in ITA No. 1198/Mum/2021. 2. Learned DR submitted that the Tribunal has adjudicated the issue relating to the primary adjustment and secondary adjustment done under transfer pricing provisions in respect of “Advertisement, Marketing and Promotional” (AMP) expenses. The Tribunal in this regard followed the decision rendered by the Coordinate Bench in assessee’s own case in A.Y. 2015-16. The Learned DR submitted that the Tribunal in A.Y. 2015-16 has deleted the primary adjustment and restored the secondary adjustment to the file of the Assessing Officer/TPO. However, the Tribunal in the instant year, has deleted the secondary adjustment also, which is contrary to the decision rendered in A.Y. 2015-16. Accordingly, learned DR submitted that M/s. L’Oreal India Pvt. Ltd. 2 the Revenue has filed this Miscellaneous Application seeking correction of the above said error. 3. The Learned AR agreed with the submissions made by learned DR. He submitted that the decision on this issue has been rendered by the Tribunal in paragraph No. 7 of its order on this issue. He submitted that there is typographical error in that paragraph, i.e., the decision on the primary adjustment was given for both AY 2016-17 and 2017-18. However, the AY 2017-18 was omitted to be mentioned in the said paragraph. Accordingly, he prayed that the said typographical error may also be corrected. 4. Having heard the rival submission, we agree with the submissions of the revenue that there is mistake apparent from record, since the issue of secondary adjustment has been restored to the file of AO/TPO in the earlier years. Accordingly paragraph No. 7 in the order dated 29.6.2022 is substituted with the following paragraph:- “7. We noticed that the Coordinate Benches are consistently taking the view that the primary adjustment made in the hands of the assessee in respect of AMP expenses are not sustainable. With regard to the secondary adjustment, it is noticed that co-ordinate benches have restored the same to the file of the Assessing Officer/TPO in A.Y. 2014- 15 & 2015-16 with certain directions. Since there is no change in the facts, following the decisions rendered by the Coordinate Benches in the earlier years in assessee’s own case, we direct the Assessing Officer to delete the primary transfer pricing adjustment made in respect of AMP expenses both in A.Y. 2016-17 and 2017-18. The secondary adjustment made in A.Y. 2016-17 is restored to the file of the Assessing Officer with the similar directions as given by the Tribunal in A.Y. 2014-15.” M/s. L’Oreal India Pvt. Ltd. 3 5. In the result, Miscellaneous Application filed by the Revenue is allowed. Pronounced in the open court on 12.6.2023. Sd/- Sd/- (RAHUL CHAUDHARY) (B.R. BASKARAN) Judicial Member Accountant Member Mumbai; Dated : 12/06/2023 Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. The CIT(Judicial) 4. PCIT 5. DR, ITAT, Mumbai 6. Guard File. BY ORDER, //True Copy// (Assistant Registrar) PS ITAT, Mumbai