{"id":63320,"date":"2026-07-31T16:38:00","date_gmt":"2026-07-31T11:08:00","guid":{"rendered":"https:\/\/itatonline.org\/digest\/samsung-india-electronics-p-ltd-v-dy-cit-2025-127-itr-543-trib\/"},"modified":"2026-07-31T16:38:00","modified_gmt":"2026-07-31T11:08:00","slug":"samsung-india-electronics-p-ltd-v-dy-cit-2025-127-itr-543-trib","status":"publish","type":"post","link":"https:\/\/itatonline.org\/digest\/samsung-india-electronics-p-ltd-v-dy-cit-2025-127-itr-543-trib\/","title":{"rendered":"Samsung India Electronics (P.) Ltd. v. Dy. CIT (2025) 127 ITR 543 (Trib.)"},"content":{"rendered":"<p>The Transfer Pricing Officer treated the assessee&#8217;s Advertisement, Marketing and Promotion expenditure as an international transaction and made adjustment by applying the Bright Line Test and the Transactional Net Margin Method. The Tribunal held that reimbursement of marketing expenditure was confined to items specifically approved by the associated enterprise and there was no agreement requiring the assessee to incur AMP expenditure for brand promotion on behalf of the associated enterprise. In the absence of an international transaction, no transfer pricing adjustment was permissible. The Tribunal directed exclusion of several comparables selected by the Transfer Pricing Officer in the trading, networking and manufacturing segments as they were functionally different from the assessee or lacked comparable financial data. Appropriate comparables were directed to be included or excluded after applying proper functional analysis<strong>. <\/strong>The Tribunal held that, consistent with earlier years and in accordance with the binding directions of the Dispute Resolution Panel, the assessee was entitled to working capital adjustment while computing the arm&#8217;s length margin of the comparables. The Transfer Pricing Officer was directed to recompute the adjustment after factual verification. The Transfer Pricing Officer separately benchmarked royalty paid by the assessee by applying the Comparable Uncontrolled Price Method despite having accepted the Transactional Net Margin Method for the manufacturing segment. The Tribunal held that royalty formed an integral part of the manufacturing activity and could not be separately benchmarked. The CUP analysis was based on incomparable transactions and resulted in an impermissible double adjustment. The transfer pricing adjustment was deleted.\u00a0 The Assessing Officer disallowed salary paid to expatriate employees on the ground that they worked for the foreign parent company. The Tribunal held that no evidence was brought on record to establish that the seconded employees furthered the business of the parent company. Following earlier decisions, the disallowance of salary expenditure was deleted.\u00a0 <strong>(AY. 2015-16).<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>S. 92CA : Transfer pricing-Reference to Transfer Pricing Officer-Arm\u2019s Length price-Avoidance of tax-Advertisement, Marketing and Promotion (AMP) expenses-No international transaction beyond agreed reimbursement-Adjustment deleted-Comparables-Functionally dissimilar companies to be excluded-Working capital adjustment-DRP directions binding-Adjustment to be allowed-Royalty-Transactional Net Margin Method accepted-Separate benchmarking under CUP not permissible-Salary of expatriate employees-Secondment-No evidence of services rendered to parent company-Disallowance deleted.[S.37(1), 92C,  144C]<\/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_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[21],"tags":[],"class_list":["post-63320","post","type-post","status-publish","format-standard","hentry","category-income-tax-act"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-gti","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/63320","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=63320"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/63320\/revisions"}],"predecessor-version":[{"id":63321,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/63320\/revisions\/63321"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=63320"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=63320"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=63320"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}