This case analysis delves into the tax tribunal proceedings of ITA No. 718/DEL/2020 where Beam Global Spirits & Wine India Private Limited appealed against orders by the Commissioner of Income Tax (Appeals) – 42, New Delhi for the assessment year 2010-11. The case was heard through video conferencing, highlighting the modern approach to judicial proceedings.
The dispute centered around transfer pricing adjustments related to the company’s advertising, marketing, and promotion (AMP) expenses. Beam Global Spirits sought to withdraw certain grounds of its appeal following a resolution under the Mutual Agreement Procedure (MAP) with the United Kingdom, substantiated by a communication from the CBDT dated July 17, 2020.
The appellant requested withdrawal of grounds related to the scope of AMP expenses as international transactions and the CIT(A)’s authority to direct the Transfer Pricing Officer (TPO) on how to treat AMP intensity in determining the arm’s length price of manufacturing and distribution segments.
Vice President G.S. Pannu and Judicial Member K. Narasimha Chary presided over the case, granting the withdrawal of the specified grounds. The order emphasized the tribunal’s adaptability to virtual hearings and acknowledged the technical and complex nature of transfer pricing in multinational enterprises.
The decision to allow withdrawal post-MAP highlights the importance of international cooperation in resolving tax disputes. This case serves as a precedent for how tax authorities and multinational companies can resolve complex transfer pricing disputes amicably through international agreements, reducing litigation costs and fostering a stable tax environment.
Beam Global Spirits & Wine vs. DCIT: Transfer Pricing Dispute Resolution – ITA 718/DEL/2020
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