Facts of the Case

The present appeal was filed by the Revenue challenging the order dated 27.03.2023 passed by the Income Tax Appellate Tribunal. The dispute pertains to the Assessment Year 2009–10.

The Revenue raised issues identical to those already considered in another appeal (ITA 674/2023) concerning Assessment Year 2010–11 involving the same assessee. The earlier appeal had already been adjudicated by the Court.

The core dispute revolved around whether Advertising, Marketing, and Promotion (AMP) expenses incurred by the assessee qualified as international transactions under transfer pricing provisions.

 

Issues Involved

  1. Whether the Income Tax Appellate Tribunal erred in holding that AMP expenses do not constitute international transactions.
  2. Whether the Revenue could challenge the Tribunal’s findings in light of already settled legal precedents and identical issues in earlier appeals.

 

Petitioner’s (Revenue) Arguments

  • The Revenue contended that the Tribunal’s order was erroneous in excluding AMP expenses from the scope of international transactions.
  • It was argued that such expenses should be subject to transfer pricing adjustments.
  • The Revenue sought reconsideration of the issue despite acknowledging similarity with earlier adjudicated matters.

Respondent’s (Assessee) Arguments

  • No appearance was made on behalf of the assessee.
  • However, reliance was placed on settled judicial precedents where AMP expenses were held not to constitute international transactions in similar circumstances.

 

Court’s Findings / Order

  • The issues raised in the present appeal were identical to those already decided in ITA 674/2023.
  • The Court relied on binding precedents, including:
    • Sony Ericsson Mobile Communications India Pvt. Ltd. v. CIT
    • Maruti Suzuki India Ltd. v. CIT
  • Following these precedents, the Court concluded that:
    • AMP expenses do not automatically qualify as international transactions.
    • The appeal would suffer the same fate as the earlier decided case.
  • Accordingly, the appeal was closed.

 

Important Clarification by the Court

  • Since a Special Leave Petition (SLP) against the decision in Sony Ericsson is pending before the Supreme Court:
    • The Revenue is granted liberty to seek revival of the present appeal if it succeeds in the SLP.

 

Sections Involved

  • Section 92 – Transfer Pricing Provisions
  • Section 92B – Definition of International Transaction
  • Section 260A – Appeal to High Court

 

Link to download the order -https://delhihighcourt.nic.in/app/showFileJudgment/60806122023ITA6972023_180730.pdf

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