Dismissed

Principal Commissioner of Income Tax, DELHI-8 v. Samsung Electronics India Information & Telecommunications Ltd.

Delhi HC18 Apr 2017ITA/305/2017

Case brief

AI extract

What is this about?

The Delhi High Court dismissed this revenue appeal arising under Section 260A of the Income Tax Act, 1961. The Court held that no substantial question of law arose justifying interference with the ITAT's order and affirmed the deletion of additions regarding specific expenses and reimbursement treatment.

What did the court decide?

The appeal was dismissed as no substantial question of law arose to disturb the ITAT's order.

Principal Commissioner of Income Tax, DELHI-8 Vs Samsung… — Income Tax | Delhi HC (2017)

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IN THE HIGH COURT OF DELHI AT NEW DELHI

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- ITA 305/2017

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PRINCIPAL COMMISSIONER OF INCOME TAX, DELHI-8 ..... Appellant Through: Mr. Rahul Kaushik, Senior Standing Counsel.

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versus

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SAMSUNG ELECTRONICS INDIA INFORMATION & TELECOMMUNICATIONS LTD. ..... Respondent Through: Mr. Himanshu Sinha with Ms. Vrinda Tulshan, Advocates.

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CORAM: JUSTICE S. MURALIDHAR JUSTICE NAJMI WAZIRI

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O R D E R % 18.04.2017

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CM No. 14469/2017 (for exemption)

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Allowed, subject to all just exceptions.

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CM No. 14470/2017 (for condonation of delay of 2 days in filing the appeal)

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For the reasons stated in the application, the delay of 2 days in filing the appeal is condoned.

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ITA 305/2017

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This appeal, under Section 260A of the Income Tax Act, 1961 (‘Act’), by the Revenue is against the order dated 30^th September, 2016 passed by the Income Tax Appellate Tribunal (‘ITAT’) in ITA No. 930/Del/2010 for the

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ITA No. 305 of 2017

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Page 1 of 3

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Assessment Year (‘AY’) 2002-03.

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One of the questions of law sought to be raised by the Revenue stems from the order of the Transfer Pricing Officer (‘TPO’). Disagreeing with the said order, the ITAT directed that the entire reimbursement received by the Assessee should be treated as its operating income. In so directing, the ITAT followed its earlier order dated 30^th April, 2013 in ITA No. 1842/Del/2009 ( Samsung India Electronics Pvt. Ltd. v. Department of Income Tax ) with which company the Assessee has since merged. That order dated for the Assessment Year (‘AY’) 2002-03 was affirmed by this Court by its order dated 21^st October, 2016 in ITA No. 642/2016 ( Commissioner of Income Tax-III v. Samsung India Electronics Pvt. Ltd. ).

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In the impugned order, the ITAT has extracted the relevant portions of the order passed by the ITAT in the above case and has reiterated the view taken thereunder. Although learned counsel for the Revenue has sought to persuade the Court to revisit the issue, the Court is not inclined to do so. The ITAT's view in the above matter is plausible. It does not give rise to any substantial question of law warranting interference with the impugned order of the ITAT.

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The other issues raised by the Revenue concern the treatment of the advertisement and sales promotion expenses both on brand promotion and capital nature of the advertisements and sales promotion expenses; expenses on computer software and on recruitment and training. What the ITAT has done is to affirm the order of the CIT (A) in deleting the additions made of the above expenses by treating them as not resulting in benefits of an

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ITA No. 305 of 2017

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Page 2 of 3

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enduring nature.

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In the considered view of the Court, both the CIT (A) and the ITAT are justified in the view taken by them that the additions on these grounds require to be deleted.

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Yet another issue concerns the issue of deemed income where again the order of the CIT (A) deleting the addition has been affirmed by the ITAT. In doing so, the ITAT has again relied on its earlier order dated 30^th April, 2013 in the case of Samsung India Electronics Pvt. Ltd. v. Department of Income Tax ( supra ).

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