IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “I”NEW DELHI BEFORE SHRIVIKAS AWASTHY, JUDICIAL MEMBER AND SHRISANJAY AWASTHI, ACCOUNTANT MEMBER आ.अ.स/ं .I.T.A Nos.1595 & 1596/Del/2017 िनधा(cid:9)रणवष(cid:9)/Assessment Years: 2007-08 & 2008-09 िनधा(cid:9)रणवष(cid:9)/Assessment Years: 2007-08 & 2008-09 बनाम बनाम बनाम बनाम बनाम बनाम बनाम Assessee by Shri Ajay Vohra, Sr. Advocate &

Shri Ravi Pratap Mall, Advocate Revenue by Shri Dharm Veer Singh, CIT DR सुनवाईक(cid:8)तारीख/ Date of hearing: 05.01.2026 उ(cid:14)ोषणाक(cid:8)तारीख/Pronouncement on 23.01.2026 आदेश /O R D E R PER SANJAY AWASTHI, ACCOUNTANT MEMBER:

1. This is a batch of two appeals pertaining to the same assessee for AY 2007-08 & 2008-09. Since the issues are by and large common for both the years, these two cases are being disposed of through a common order.

2. ITA No.1595/Del/2017 arises from order u/s 254/143(3) r.w.s. 144C of the Income Tax Act, 1961 (hereafter as “the Act”), dated 30.12.2016, passed by Ld. ACIT, Circle 5(1), New Delhi. The appeal in ITA No.1596/Del/2017 arises from order dated 30.12.2016, passed by Ld.

ACIT, Circle 5(1), New Delhi u/s 254/143(3) r.w.s. 144C of the Act. Briefly, the assessee is a company incorporated in 1995 and is a wholly owned subsidiary of Bose Corporation of the USA. The assessee is engaged in the business of selling high end Bose Audio Products to retail customers and also to large institutional customers (hotels, auditorium, etc.), through their professional sales division. The assessee is the sole distributor of Bose products in India and for retail customers it primarily purchases only Bose products, while for the professional sales division it also purchases Non-Bose Products to provide complete Audio/Video solutions to the customers. Based on a detailed functional asset and risk profile of the company a Transfer Pricing study by the assessee himself his activities have been characterized as buy sale distributor. The assessee selected the Resale Price Method (hereafter as RPM) to benchmark its support services income and purchase of finished goods. It may be mentioned that its AMP expenses had not been benchmarked.

2.1 These two cases are second round proceedings as in the first round the ITAT had adjudicated the issues and remanded the matter back on certain specific points.Since the discussion on such points, as had been dealt with by the ITAT in the first round, would be relevant for deciding the present two appeals also hence [ITA 5178/Del/2011 and 263/Del/2013, order dated 31/07/2014] relevant portions from the ITAT’s order may be extracted as under: -

“6.1. Further in view of the ratio of the Special Bench order in L.G. Electronics, we dismiss the ground/arguments raised by the assessee challenging the issue of jurisdiction of the TPO and uphold the same. We further hold the transaction to be an international transaction. Similarly the applicability of the bright line as a methodology for calculating the AMP is also decided in Revenue’s favour and the action is upheld and the issue is covered against the assessee. However as far as calculation of “bright line” is concerned we direct the TPO to correctly calculate the “bright line” keeping in mind that a fresh search of comparables be done following the directions of the Special Bench. Thus the TPO needs to carry out a fresh search for selecting the comparables after a proper FAR analysis making such adjustments which are warranted on facts, keeping the 14 parameters set out in para 17.4 of the order of the Special Bench.

6.2. We further direct the TPO to correctly calculate the AMP expenses by excluding the selling expenses as they do not from part of AMP basket of expenses as has been hold by a catena of decisions following the decision of L.G. Electronics (Special Bench).

6.3. The TPO shall also decide the application of mark-up by way of a speaking order in accordance with law following the precedent laid down in L.G. Electronics case where principally the issue of mar