CASE LAWS

2016-TII-241-ITAT-MUM-TP

HEINZ INDIA PVT LTD Vs Addl CIT: MUMBAI ITAT (Dated: April 27, 2016)

Income tax - Sections 14A, 92CA, 143(3) & 144C(13).

Keywords - ALP - AE - AMP expenses - absence of agreement - adhoc disallowance - bright line test - brand promotion of AE - incidental benefit to AE & profit split method.

Whether in absence of any agreement for payment of AMP expenses to the AE's, can it be held that there was an international transaction, only on the basis that AMP expenditure incurred by the assessee would have benefitted the AE's, who owned the brands used by the assessee - NO: ITAT

Whether it can be concluded that AMP expenditure incurred by an Indian assessee was for promoting the brand of foreign AE, merely on ground that some incidental benefit has accrued to the foreign AE - NO: ITAT

Assessee's appeal partly allowed

2016-TII-24-HC-DEL-TP (Corrected - Error regretted)

PR CIT Vs MITSUI AND COMPANY INDIA PVT LTD: DELHI HIGH COURT (Dated: April 28, 2016)

Income tax - Section 92 & Rule 10B(1)(e)(i).

Keywords - Berry ratio,Transfer pricing, Sogo Shosha company & TNMM.

Whether merely because a question of law decided by the High Court has been challenged by the Revenue before the Supreme Court, its ratio cannot be applied - NO: HC

Whether when the question relating to application of TNMM by a Sogo Shosha company for calculation of net profit margin with reference to cost incurred by it, and not by any other entity, has been decided by the High Court, the ratio of this decision cannot be applied merely because the Revenue has appealed against it - NO: HC

Revenue's appeal dismissed