The Commissioner Of Income … vs Whirlpool Of India Ltd. on 22 December, 2015

1. These two appeals, one by the Revenue and the other by the Assessee,
under Section 260 A of the Income Tax Act 1961 (‘Act’) are directed against
the common order dated 13th January 2014 passed by the Income Tax
Appellate Tribunal (‘ITAT’) in ITA No. 426/Del/2013 for the Assessment
Year (‘AY’) 2008-09.
The issue
2. These appeals concern the issue of transfer pricing (‘TP’) adjustment in
relation to the incurring of advertisement, marketing and sales promotion
(‘AMP’) expenses by the Indian entities involved in international transactions
with their respective foreign associated enterprises (‘AEs’). The case of the
Revenue is that the arm’s length price (‘ALP’) of the AMP expenses incurred
by the Indian entity i.e the Assessee is required to be determined since it has
been using, for marketing and promotion or otherwise the brand of its foreign
AE and that the incurring of such AMP expenses, while enuring to the benefit
of the Assessee, is also benefiting the brand of the foreign AE. The attempt by
the revenue is to attribute some part of the AMP expenses incurred as having
been incurred for the foreign AE for which the Assessee is to be compensated
or reimbursed by the foreign AE.

Source: Indian Kanoon

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