| COURT: | ITAT Bangalore |
| CORAM: | Inturi Rama Rao (AM), Vijay Pal Rao (JM) |
| SECTION(S): | 92C |
| GENRE: | Transfer Pricing |
| CATCH WORDS: | ALP, AMP Expenditure, Transfer Pricing |
| COUNSEL: | S. Ramasubramanyam |
| DATE: | February 5, 2016 (Date of pronouncement) |
| DATE: | March 3, 2016 (Date of publication) |
| AY: | 2009-10, 2010-11 |
| FILE: | Click here to view full post with file download link |
| CITATION: | |
| Transfer Pricing: The existence of an "international transaction" w.r.t. AMP Expenditure cannot be assumed. The onus is on the TPO to prove such transaction. There is no machinery provision to ascertain the price to promote the AE's brand values. The AMP Expenditure should be treated as operating cost to apply TNMM and determine ALP of transactions with AE | |
The operating profit cost to the total operating cost was adopted as Profit Level Indicator which means that the AMP expenditure was not considered as a part of the operating cost. This goes to show that the AMP expenditure was not subsumed in the operating profitability of the assessee-company. Therefore, in order to determine the ALP of international transaction with its AE, it is sine qua non that the AMP expenditure should be considered as a part of the operating cost
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