Assessee engaged in the business of sourcing, distribution and marketing of products of brand name \u2018Adidas\u2019 in India. TPO alleged that AMP expenses incurred by assessee resulted in brand building of its AE in India for which assessee was not compensated and applied Bright Line Test. Tribunal in assessee\u2019s own case had observed that the main purpose of incurring huge AMP expenses largely benefited the assessee in India with incidental benefit arising to foreign AE. Unless the TPO could establish direct benefit accruing to the foreign AE there would be no existence of an international transaction. Following its earlier order, tribunal set aside the matter to the TPO.<\/p>\n
Further, AO proposed an addition of Rs. 90.92cr on account of insurance compensation pertaining to loss due to fire received by Adidas AG, Germany. Premium of insurance policy was incurred by Adidas AG, the said entity would be only having the right to receive the claim of insurance and therefore no income accrued to the assessee. Adidas AG entered into a contract in Germany for insuring the intangible asset in the form of financial interest in its subsidiaries which is distinct from physical stock in trade which was lost in fire. Adidas AG has also paid tax in Germany in relation to the amount of insurance claim in question. Thus, claim for insurance could not be said to have any business connection in India and consequently, claim received by Adidi as AG could not be treated as income deemed to accrue or arise in India in hands of the assessee. (AY. 2010-11)<\/p>\n","protected":false},"excerpt":{"rendered":"
S. 92C : Transfer pricing\u2013AMP expenses incurred for brand building\u2013not an international transaction\u2013followed earlier order of tribunal in its own case\u2013Matter remanded back-Income deemed to accrue or arise in India\u2013Business connection\u2013Premium for insurance policy was incurred by Adidas AG and it would only be entitled to receive claim of insurance and no income accrued to assessee\u2013No business connection in India [S. 9(1)(i), 92B(1)] <\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-10581","post","type-post","status-publish","format-standard","hentry","category-digest"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-2KF","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/10581","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=10581"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/10581\/revisions"}],"predecessor-version":[{"id":10582,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/10581\/revisions\/10582"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=10581"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=10581"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=10581"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}