It has been held by the Appellate Tribunal that the assessee is engaged in sale of Nivea products in India. The Assessee had incurred huge expenditure on advertisement, marketing and promotion of Nivea brand in India. The TPO made adjustment in respect of AMP expenditure incurred by assessee in the absence of any agreement or arrangement between assessee and AE for incurring the AMP expenses. As, the assessee wanted to create awareness about its product in Indian market, it has incurred AMP expenditure. Thus, the expenses incurred by the assessee were wholly and exclusively for its own business and it was not international transaction. Hence, no adjustment is required to be made with respect to AMP expenditure incurred by the Assessee. (AY. 2014-15)
NIVEA India (P) Ltd. v. Dy. CIT (2021) 186 ITD 366 (Mum) (Trib)
S. 92C : Transfer pricing – AMP expenditures incurred for creating awareness about the product is purely business expenditures and thus, outside the purview of international transactions. Hence, no TP adjustment on account of AMP expenses are required to be made.[ S.92B]