Appellant: DCIT Circle-1(1), New Delhi
Respondent: Adidas India Marketing Pvt Ltd, New Delhi
2014-15
Case Number: ITA 159/DEL/2021
Order Type: Final Tribunal Order
Date of Order: 2022-09-02
Pronounced on: 2022-09-02
This case revolves around the contentious transfer pricing adjustments related to advertisement, marketing, and promotion (AMP) expenses claimed by Adidas India. The dispute also includes issues over the disallowance of buying commissions due to non-deduction of TDS.
The tribunal examined the three appeals filed by the Revenue against the separate orders of the ld. Commissioner of Income Tax (Appeals)–44, New Delhi. The primary focus was the applicability of the bright line test for AMP expenses and the correct deduction of TDS on buying commissions. After deliberation, the tribunal decided in favor of the respondent, rejecting the bright line approach for determining the arm’s length price of AMP expenses and ruling the TDS disallowances as unjustified.
The final judgment affirmed the respondent’s stance, dismissing the appeal by the Revenue. This decision marks a significant precedent in transfer pricing cases, particularly concerning the treatment of AMP expenses and TDS on buying commissions.
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