ORDER

% 31.01.2024

1. The Department has preferred these appeals against the order of the Income Tax Appellate Tribunal [“ITAT”] dated 27 May 2019. The questions of law which are proposed for our consideration are as follows:-

“A. Whether the ITAT, on the facts and circumstances of the case, has erred in deleting the addition made by the TPO on account of Advertisement, Marketing and Promotion (AMP) adjustment? B. Whether the ITAT, on the facts and circumstances of the case, has erred in its decision of treating the (Bright Line Test) BLT method for AMP adjustment as unsustainable ignoring Rule 10AB of the Income Tax Rules? C. Whether the ITAT, on the facts and circumstances of the case, has erred in rejecting the TPO’s bright line approach in determining Arm’s Length Price for the AMP expenditure incurred by the assessee? D. Whether the ITAT, on the facts and circumstances of the case, has erred in not accepting the TPO’s view that Bright Line concept is an internationally accepted economic tool which determines the expenditure incurred by a routine distributor not promoting any marketing intangible? E. Whether the ITAT, on the facts and circumstances of the case, has erred in holding that existence of an International transaction must be established on the basis of the Hon’ble High Court’s decisions in the cases of Maruti Suzuki India Ltd. v. CIT [2015] 381 ITR 117 (Delhi) and Sony Ericsson Mobile Communications India (P.) Ltd. v. CIT [2015] 374 ITR 118 (Delhi) despite the fact that in the case of Sony Ericsson Mobile Communications India (P.) Ltd. v. CIT(supra) the Hon’ble high Court of Delhi has held the transaction of AMP as an international transaction? F. Whether on the facts and circumstances of the case, the ITAT is justified in its decision of treating the BLT method for AMP adjustment as unsustainable when the matter is sub-judice and is pending with the Hon’ble Supreme Court?”

2. We note that the ITAT has rendered the impugned order following the judgment rendered by our Court in Sony Ericsson Mobile Communications India (P.) Ltd. vs. Commissioner of Income-tax-III [2015 SCC Online Del 8083] and which had rejected the application of the Bright Line Test in all circumstances. This is evident from the following passage as appearing in the order of the ITAT:-

“8. In our considered opinion, since basis on which adjustment has been made being Bright Line Test itself has been rejected by Hon’ble Delhi High Court in case of Sony Ericson India P. Ltd. (supra) and no further interference is called for at this stage.

Further reliance placed by Ld.Sr.DR on BEPS guidelines and Action Plan 8-10 cannot be applied as the same is yet to be implemented. We, therefore, reject application of Bright Line Test, respectfully following decision of Hon’ble Delhi High Court in case of Sony Ericson India P Ltd. (supra).”

3. In view of the aforesaid, we find that these appeals raise no substantial question of law. Consequently, we find no reason to interfere with the impugned order.

4. The appeals shall stand dismissed on the aforesaid terms.

YASHWANT VARMA, J. DHARMESH SHARMA, J. JANUARY 31, 2024/neha