Assessee is  engaged in manufacturing and sales of breakfast cereals and convenience foods and it operated as a licensed manufacturer of ready to eat cereals. It incurred certain AMP expenditure. TPO held that efforts and expenditure incurred by assessee on AMP and market development on advice and guidance of its parent would constitute international transaction and made ALP adjustment in respect of AMP expenses incurred. Held that   the  assessee was not merely a distributor of products manufactured by its AE but assessee itself was manufacturing its own products in India under license from AE. There was no express arrangement/agreement between assessee and AE for incurring expenditure to promote brand of AE. Accordingly the ALP adjustment in respect of AMP expenditure could not be made when assessee incurred AMP expense with a view to market and promote its own manufactured products by making payments to third parties in India and there was no express arrangement/agreement between assessee and AE for incurring such expenditure to promote brand of AE.  Assessee purchased pringles product from its AE based in Singapore  Singapore AE did not manufacture pringles, but in turn got it manufactured from a third party contract manufacturer and thereafter, goods were supplied at a cost plus markup of 5 per cent on third party manufacturer’s cost. These Pringles were later imported by assessee from its AE and distributed in Indian market. In Transfer Pricing (TP) study report, assessee characterised itself as a distributor of Pringles products and was responsible for strategic and overall management of Pringles business in India and on other hand, Singapore AE, being least complex entity, was selected as tested party for benchmarking international transaction of import of finished goods TPO disregarded benchmarking approach adopted by assessee and selected Indian entity as tested party. Held that Singapore AE which was remunerated on mere cost plus markup basis and undertook only limited functions would be least complex entity and, therefore was rightly taken as tested party for assessee carrying on multiple functions and bearing significant entrepreneurial risk in India. Since gross margins of assessee were much more than gross margins of comparable companies chosen by TPO, no adjustment to ALP was to be made in respect of import of finished goods.  (AY.2014-15)