Case Number: ITA 838/DEL/2021
Appellant: Olympus Medical Systems India Pvt. Ltd., Gurugram
Respondent: DCIT, Circle- 3(1), Gurugram
Assessment Year: 2012-13
Result: 2012-13
Case Filed on: 2021-07-08
Order Type: Final Tribunal Order
Date of Order: 2022-04-20
Pronounced on: 2022-04-20
The present appeal was filed by Olympus Medical Systems India Pvt. Ltd. for the Assessment Year 2012-13 against the final assessment order dated 30/04/2021 passed by the DCIT, Circle-3, Gurugram, under section 143(3) read with Section 144C of the Income Tax Act, 1961. The main issue was the addition of AMP expenses as an international transaction.
The appellant raised several grounds of appeal, focusing on the following key issues:
The case was heard by the Delhi Bench ‘I-2’ of the Income Tax Appellate Tribunal (ITAT), with Dr. B. R. R. Kumar, Accountant Member, and Shri Yogesh Kumar U.S., Judicial Member, presiding over the matter. The hearing was held on 01.02.2022, and the order was pronounced on 20.04.2022.
The Tribunal concluded that the TPO/DRP/AO were correct in holding that there was an existence of an international transaction of AMP expenses incurred by the assessee. The Tribunal based its decision on various facts and judicial precedents, including:
The Tribunal noted that the Revenue had substantially proved the onus of the existence of an international transaction between the assessee and its AEs as defined under section 92B of the Act.
The Tribunal addressed the appropriateness of the Profit Split Method (PSM) used by the TPO to determine the ALP of the AMP expenses. The Tribunal highlighted several issues:
The Tribunal restored the issue to the TPO for proper application of the method to determine the ALP of the AMP expenses, taking into account appropriate comparables and ensuring the assessee provides the necessary financials of its AEs.
The Tribunal dismissed Grounds No. 1 and 2 as general in nature and not requiring adjudication. Ground No. 27, pertaining to the initiation of penalty proceedings under section 271(1)(c) of the Act, was also dismissed as premature.
The Tribunal concluded that the TPO/DRP/AO were correct in holding the existence of an international transaction in AMP expenses and restored the issue of determining the ALP to the TPO with specific directions. The appeal was partly allowed for statistical purposes, and the stay application filed by the assessee was dismissed as infructuous.
The order pronounced in the open court on 20th April, 2022, was as follows:
Order pronounced in the open court on 20th April, 2022
Sd/- Sd/-
(Dr. B. R. R. KUMAR) (YOGESH KUMAR U.S.)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Date: 20.04.2022
R. Naheed *
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(A)
5. DR
Asst. Registrar, ITAT, New Delhi
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