PepsiCo India Holdings Pvt. Ltd. Versus ACIT, Central Circle-7, New Delhi – Income Tax Appellate Tribunal Delhi – ITA No.749/DEL/2022 – Assessment Year: 2018-19

Summary

This case pertains to the appeal filed by PepsiCo India Holdings Pvt. Ltd., based in Gurgaon, against the order of the Assessing Officer (National Faceless Assessment Centre), Delhi, for the assessment year 2018-19. The primary issue revolves around the computation and disallowance of Advertisement, Marketing, and Promotion (AMP) expenses. The case was heard by a bench comprising SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER, and Ms. ASTHA CHANDRA, JUDICIAL MEMBER.

Background

PepsiCo India Holdings Pvt. Ltd. engaged in trading and manufacturing soft drink beverages and snack food items, contended several points against the order passed by the National Faceless Assessment Centre (NFAC), including but not limited to the assumption of jurisdiction, computation of tax demand despite NIL income, and errors in Transfer Pricing Adjustment on account of AMP Expenses.

Final Judgment

The Income Tax Appellate Tribunal, after reviewing the case details and the precedents set by previous judgments in favor of PepsiCo India, allowed the appeal. The bench specifically pointed out that there was no substantial change in the facts of the case that would lead to a different conclusion than those of the precedents. Hence, the addition made by the revenue authorities was directed to be deleted, thus ruling in favor of PepsiCo India Holdings Pvt. Ltd.

Conclusion

The case highlights important considerations for multinational corporations in terms of jurisdictional authority, assessment proceedings, and transfer pricing adjustments, particularly concerning AMP Expenses. This decision underscores the appellate tribunal’s consistency with its precedents and provides a significant point of reference for similar cases in the future.