The Delhi High Court dismissed appeals against ITAT rulings deleting adjustments on Advertisement, Marketing and Promotion expenses for brand building, relying on previous High Court precedents rejecting the bright line test method.
The appeals stood dismissed as no substantial questions of law survived.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
$~21 & 22
PR. COMMISSIONER OF INCOME TAX-1 .....Appellant
Through: Mr. Sanjay Kumar, SSC along with Ms. Monica Benjamin and Ms. Easha Kadian, JSCs.
versus
CASIO INDIA COMPANY PVT. LTD. .....Respondent
Through: Mr. Nageswar Rao, Mr. Parth and Mr. Pratik Rath, Advs.
22
PR. COMMISSIONER OF INCOME TAX-1, DELHI
.....Appellant Through: Mr. Gaurav Gupta, SSC along with Mr. Shivendra Singh and Mr. Yojit Pareek, JSCs.
versus
CASIO INDIA COMPANY PVT. LTD. .....Respondent Through: Mr. Nageswar Rao, Mr. Parth and Mr. Pratik Rath, Advs.
CORAM:
HON'BLE MR. JUSTICE YASHWANT VARMA HON'BLE MR. JUSTICE DHARMESH SHARMA
O R D E R % 11.12.2024
1 Tribunal
This is a digitally signed order.
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Year2 2010-11 while arriving at the finding that Advertisement, Marketing and Promotion3 expenses did not constitute an international transaction and could thus not be separately benchmarked and as a result of which the adjustment of AMP was directed to be deleted.
“(a) Whether the Income Tax Appellate Tribunal [ "ITAT" ] was justified on facts and in law in deleting addition on account of expenses incurred by the assessee for advertisement, marketing and promotion [ "AMP" ] for brand-building for brand owned by the associated enterprise?
(b) Whether the ITAT was justified on facts and in law in holding that the Revenue needs to establish on the basis of tangible material or evidence that there exists an international transaction regarding brand building by way of AMP expenses despite the fact that it was
2 A.Y.
3 AMP
4 TPO
5 AO
6 DRP
This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 20/12/2024 at 12:50:07
held by the Delhi High Court m the ease of Sony Ericsson Mobile Communications India (P.) Ltd. v. CIT [374 ITR 118] that transaction of excess AMP is an international transaction?”
“The Revenue has preferred the present appeal to assail the order dated 24.01.2019 passed by the Income Tax Appellate Tribunal (ITAT) in ITA No. 8060/Del/2018 preferred by the respondent for the assessment year 2014-15.
A perusal of the impugned order shows that the same proceeds on the basis of the decision of this Court in CIT Vs. Sony Ericson Mobile Communication India Pvt. Ltd. , [2015] 55 taxmann.com 240. In that decision, this Court rejected the adoption of the bright line test method for making the protective adjustment by the Assessing Officer. In the present case as well, the Assessing Officer had adopted the bright line test method and the Tribunal by following the decision of this Court in Sony Ericson Mobile Communication India Pvt. Ltd. (supra) has rejected the said method. In view of the fact that this Court has already rendered its decision on the same issue, we dismiss this appeal.”
YASHWANT VARMA, J.
DHARMESH SHARMA, J.
DECEMBER 11, 2024/ RW
7 ITA 828/2019 decided on 13 September 2019
This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 20/12/2024 at 12:50:07
2 issues framed by the court
Whether the ITAT was justified in deleting addition on account of Advertisement, Marketing and Promotion expenses for brand building?
Whether the Revenue needs to establish on basis of tangible material existence of international transaction regarding brand building by AMP expenses?
Colour shows how this judgement treated each authority
Sony Ericsson Mobile Communications India (P.) Ltd. v. CITFollowed¶18
[374 ITR 118]
Deputy Commissioner of Income Tax-5(2) v. Casio India CompanyReferred¶35
CIT Vs. Sony Ericson Mobile Communication India Pvt. Ltd.Followed¶36
[2015] 55 taxmann.com 240
PR. Commissioner of Income Tax-1
Casio India Company Pvt. Ltd.
Yashwant Varma
Dharmesh Sharma
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
