MCCANN ERICKSON INDIA PRIVATE LIMITED,DELHI V. DCIT CIRCLE-16(1), DELHI

MA 262/DEL/2025

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McCann Erickson India Pvt. Ltd. filed a miscellaneous application against the order of the Income Tax Appellate Tribunal concerning the assessment year 2020-21. The application sought rectification of the Tribunal's earlier decision, which combined two categories of international transactions for benchmarking purposes. The assessee argued that transactions in 'Category 1' had already been accepted by the TPO, and only 'Category 2' required re-evaluation. The Revenue opposed the application, stating there was no apparent mistake in the original order. The Tribunal agreed with the assessee's position and modified its earlier order to separate the benchmarking of the two categories of transactions.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 781207 (ITAT-DELHI)
• Duration Of Justice: 3 month(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 24-10-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2020-2021
• Appeal Filed On: 24-07-2025
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHISHEK DEVAL
• Assessee Lawyers: PRASHANT MEHARCHANDANI
• Keywords: Set aside; Opportunity of being heard; Transfer pricing; International transaction; Rectification of order

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES ‘H’ : NEW DELHI. BEFORE SHRI S.RIFAUR RAHMAN, ACCOUNTANT MEMBER and SHRI ANUBHAV SHARMA, JUDICIAL MEMBER MA No.262/DEL/2025 (in ITA No.3833/DEL/2024) (Assessment Year: 2020-21) McCann Erickson India Pvt. Ltd., vs. DCIT, 5th Floor, Good Earth Business Bay, Circle 16 (1), Sector 58, Bhondsi, S.O. Bhondsi (168), Gurgaon – 122 102 (Haryana). (PAN : AAACT0835D) (APPLICANT) (RESPONDENT) APPLICANT/ASSESSEE BY : Shri Prashant Meharchandani, Advocate Shri Jainender Singh Kataria, Advocate REVENUE BY : Shri Abhishek Deval, Sr. DR Date of Hearing : 10.10.2025 Date of Order : 24.10.2025 O R D E R PER S. RIFAUR RAHMAN, AM : 1. This misc. application is filed by the Applicant/Assessee against the order of the Tribunal in ITA No.3833/Del/2024 dated 19.03.2025 for Assessment Year 2020-21 for rectification of mistake of the impugned order dated 19.03.2025. 2. At the time of hearing, ld. AR of the assessee brought to our notice page 2 of the misc. application filed before us and submitted that the assessee Printed from counselvise.com 2 MA No.262/Del/2025 has recognized income from international transaction in the two categories i.e. category 1 and category 2 as under :- S.No. Category I Category II 1. Income Transaction Income transactions (‘Disputed Transaction before ITAT’) Nature of transaction Amount (‘INR’) Nature of transaction Amount (‘INR’) Commission on media release 24,51,62,071 Assistance in preparation of advertisement material 34,957,965 Recovery of expenses 1,95,81,839 Assistance in preparation of advertisement and media development 239,689,789 Payment of excess amount received for assistance in preparation of advertisement and media development 16,587 Assistance in preparation of advertising material (craft) 10,291,588 Cost recharges 21,194,798 Total 26,47,60,497 Total 30,61,34,140 3. With the above submission, he also brought to our notice page 15 of the impugned order wherein the Bench has observed the facts as per the submissions. Similarly, he brought to our notice para 17 of the impugned order and brought to our notice the submissions of the assessee from the para of TP study which was reproduced in para 17 of the order. However, he submitted that while adjudicating the issue at para 21 of the order, the Bench has set aside the order back to the file of AO by combining the international transactions of both the categories and direction was given to redo the benchmarking of the transaction. He submitted that as far as category 1 of the transactions, the TPO has Printed from counselvise.com 3 MA No.262/Del/2025 already accepted the ALP and not proposed any adjustments. Therefore, the direction should be given only on the category 2 of the international transaction and accordingly he prayed that suitable direction may be given. 4. On the other hand, ld. DR of the Revenue submitted that there is no mistake apparent on record and also assessee has not made any such categorization in the grounds of appeal raised before the Bench. 5. Considered the rival submissions and material available on record. After considering the factual matrix and submissions of the assessee at the time of original hearing, we observe that the submissions of the assessee has substance and it requires certain modification in our findings, therefore, we modify our findings at para 21 of the order and rest of the order remain unaltered or changed. Accordingly we modify para 21 which may be read as under :- “21. From the above submissions and documents submitted before us, we observed that the TPO has grossly rejected the submissions of the assessee on the separate craft division’s revenue and cost by observing that the assessee has not submitted the relevant basis of allocation of cost between the divisions. Further we observed that the TPO has rejected the craft divisions segment result raising doubt on the basis of allocation. He could have asked the assessee to resubmit or give them proper opportunity to make submissions in this regard. He completed the assessment with the preconceived notions that all the transactions carried by the assessee are similar overlooking the diversity of IGS involved. Printed from counselvise.com 4 MA No.262/Del/2025 Therefore, we are inclined to remit this issue back to the TPO to redo the bench marking of the transactions of services rendered by the assessee to its AEs by applying the proper method either TNMM or CUP as per the method provided under the rule 10D of Income Tax rules. Therefore, we observed that the TPO has proceeded to complete the assessment combining all the impugned services without bench marking the separate impugned IGS rendered and provided by the assessee. Therefore, we are inclined to remit the issue back to the file of AO/TPO to bench mark the IGS provided by the assessee separately de novo after giving proper opportunity of being heard to the assessee. Therefore, the grounds raised by the assessee are allowed for statistical purposes.” 6. In the result, the misc. application is allowed as indicated above. Order pronounced in the open court on this 24th day of October, 2025. Sd/- sd/- (ANUBHAV SHARMA) (S.RIFAUR RAHMAN) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 24.10.2025 TS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals). 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI Printed from counselvise.com "