PR. COMMISSIONER OF INCOME TAX-7, DELHI V. M/S WRIGLEY INDIA PVT. LTD.

ITA/112/2025

AI Insights

The case involves the Principal Commissioner of Income Tax-7, Delhi as the petitioner and Wrigley India Pvt. Ltd. as the respondent. The Revenue appealed against the order of the Income Tax Appellate Tribunal (ITAT), which had dismissed their earlier appeal concerning the AMP expenses for the assessment year 2012-13. The core issue was whether the AMP expenses constituted a separate international transaction that required benchmarking. The CIT(A) and ITAT both found that these expenses were not separate international transactions and thus not subject to the Bright Line Test. The High Court referenced similar precedents and previous rulings in the Assessee's own case to dismiss the appeal, stating that no substantial questions of law arose for consideration.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 728204 (HC-DELHI)
• Appeal Type: Others
• Pronouncement Date: 24-04-2025
• Assessment Year: misc
• Other Referred Cases: Sony Ericsson Mobile Communication India Pvt. Ltd. v. CIT-3:[2015] 374 ITR 118 (Delhi), Maruti Suzuki India Ltd. v. CIT: (2016) 381 ITR 117, Principal Commissioner of Income Tax-9 v. Wrigley India Pvt. Ltd.: Neutral Citation No. 2023:DHC:7818-DB
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: MOHNA LAL; ANUSHKA ARORA
• Assessee Lawyers: PUNEET RAI
• Keywords: Bright Line Test; Income Tax; International transaction; Transfer pricing; Advertising, Marketing and Promotional expenses
• Section: 143(3)

Judgement Text

" ITA 112/2025 Page 1 of 3 $~82 * IN THE HIGH COURT OF DELHI AT NEW DELHI % Date of decision: 24.04.2025 + ITA 112/2025 PR. COMMISSIONER OF INCOME TAX-7, DELHI .....Petitioner Through: Mr. Puneet Rai, Advocate. versus M/S WRIGLEY INDIA PVT. LTD. .....Respondent Through: Ms Mohna M. Lal, Ms Anushka Arora, Advocates. CORAM: HON'BLE MR. JUSTICE VIBHU BAKHRU HON'BLE MR. JUSTICE TEJAS KARIA O R D E R % 24.04.2025 VIBHU BAKHRU, J. (Oral) CM APPL. 23898/2025 1. Exemption is allowed, subject to all just exceptions. 2. The application is disposed of. CM APPL. 23899/2025 3. For the reasons stated in the application, the delay of 89 days in refiling the present appeal is condoned. 4. The application is disposed of. ITA 112/2025 5. The Revenue has filed the present appeal impugning an order dated 24.07.2024 passed by the learned Income Tax Appellate Tribunal [‘the Tribunal’] in ITA 7440/Del/2017 in respect of assessment year [‘AY’] Signed By:NEELAM SHARMA Signing Date:05.05.2025 15:58:32 Signature Not Verified ITA 112/2025 Page 2 of 3 2012-13. By the impugned order, the learned Tribunal dismissed the appeal [ITA 7440/Del/2017] preferred by the Revenue against the order passed by the CIT(A), whereby the CIT(A) had accepted that the Advertising, Marketing and Promotional [‘AMP’] expenses do not constitute a separate international transaction and it is erroneous to benchmark such expenses by using the Bright Line Test [‘BLT’]. 6. It is material to note that the Transfer Pricing Officer [‘TPO’] had rejected the Assessee’s contention that the AMP expenses are not an international transaction by referring to the articles and information available on the internet, to the effect that the Wrigley Group had undertaken an exercise for strengthening their brands world-wide. 7. The CIT(A) found that in the given facts of the case, the AMP expenses were not incurred as a separate international transaction. As noted above, the said view was upheld by the learned ITAT. 8. It is noted that the decision of the CIT(A) as well as the learned ITAT are based on the given facts in the present case. Undisputedly, AMP expenses cannot be considered as separate international transactions where the same are incurred in the normal course of business and there is no material to establish the same were incurred as a transaction between the Assessee and its associate enterprises. Concededly, the said issue is covered in the favour of Assessee by the decisions of this Court in Sony Ericsson Mobile Communication India Pvt. Ltd. v. CIT-3:[2015] 374 ITR 118 (Delhi) and Maruti Suzuki India Ltd. v. CIT: (2016) 381 ITR 117. It is also relevant to note that in the Assessee’s own case being Principal Commissioner of Income Tax-9 v. Wrigley India Pvt. Ltd.: Neutral Citation No. 2023:DHC:7818-DB, this Court had, following the decision in the case of Maruti Suzuki India Ltd. v. CIT (supra) rejected the Revenue’s Signed By:NEELAM SHARMA Signing Date:05.05.2025 15:58:32 Signature Not Verified ITA 112/2025 Page 3 of 3 appeal in respect of AY 2010-11. The present appeal will necessarily have to bear the same fate. 9. In the given facts, we find that no substantial questions of law arise for consideration of this Court. 10. The appeal is, accordingly, dismissed. VIBHU BAKHRU, J TEJAS KARIA, J APRIL 24, 2025 KG Click here to check corrigendum, if any Signed By:NEELAM SHARMA Signing Date:05.05.2025 15:58:32 Signature Not Verified "