The Tribunal held that the element of adding value to the goods incurring advertisement, marketing and sales promotion expenditure creating market intangibles and enhancing brand value of the product was missing in the present assessee’s case. Applying the resale price method after excluding selling and distribution expense of Rs. 10.18 crores, the adjustment worked out to Rs. 2.85 crores. Thus, at best the adjustment made by the Transfer Pricing Officer/Dispute Resolution Panel ought to be restricted to Rs. 2.85 crores as against Rs. 13.50 crores. The Transfer Pricing Officer was directed to restrict the adjustment to the extent of Rs. 2.85 crores. (AY. 2008-09)
Haier Appliances India Pvt. Ltd. v. Dy. CIT (2020) 84 ITR 521 (Delhi) (Trib.)
S. 92C : Transfer pricing-Arm’s length price-Advertisement, marketing and sales promotion expenses-Business Of Distributing-Not a case of adding value to goods-Sale and distribution expenses to be excluded. [S. 92CA(3)]