Held that RPM applies where an Indian entity purchases goods from its foreign/AE and then resells same; if international transaction is not that of purchase by an Indian entity, then RPM cannot be applied. Where the assessee sold goods to its AE in international transaction rather than purchasing same, RPM could not be applied. Held that employees cost and operating and administrative expenses incurred for year in question and claimed as deduction in entirety in year alone could be treated as ‘Brand building expenses’ and correlated with sales to be made in future years without capitalizing them for accounting or tax purpose. (AY. 2012-13, 2013-14)
Save Medica Ltd. v. ACIT (2022) 217 TTJ 81 / 133 taxmann.com 503 (Pune)(Trib)
S. 92C : Transfer pricing-Arm’s length price-Methods for determination of-Resale price method-International transaction is not that of purchase by an Indian entity, then RPM cannot be applied-Brand building expenses-Employees cost and operating and administrative expenses incurred for year in question and claimed as deduction in entirety in year alone could not be treated as Brand building expenses. [R. 10B(1)(b)]