IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES ‘I’: NEW DELHI.

BEFORE SHRIS.RIFAUR RAHMAN, ACCOUNTANT MEMBER and SHRI SUDHIR PAREEK, JUDICIAL MEMBER (Assessment Year: 2018-19)

Marks and Spencer (India) Private Limited, vs. ACIT, Circle 1 (1), Plot No.64, 2^nd Floor, Holly Hocks, Gurgaon.

Sector 44, Gurgaon – 122 002 (Haryana).

(PAN :AAECM3578J)

(APPELLANT) (RESPONDENT)

ASSESSEE BY : Shri Ravi Sharma, Advocate Shri Harmeet Singh, AR REVENUE BY : Shri Dharm Veer Singh, CIT DR Date of Hearing : 09.10.2025 Date of Order : 05.01.2026

ORDER

PER S. RIFAUR RAHMAN, ACCOUNTANT MEMBER :

1. The appeal preferred by the assessee is directed against the assessment order dated 21.07.2022 passed by the ACIT, Circle 1 (1), Gurgaon under section 143(3) read with section 144C(13) of the Income-tax Act, 1961 (for short ‘the Act”) for Assessment Year 2018-19 pursuant to the directions of the Dispute Resolution Panel u/s 144C(5) of the Act.

2. At the time of hearing, ld. AR of the assessee brought before us relevant facts of the case, the assessee, M&S India was incorporated on

01.04.2005 and is a subsidiary of Marks and Spencer Investments Pte. Ltd (‘M&S Singapore’). The assessee is engaged in the wholesale business of procuring and selling branded apparels and accessories including leather products and toiletries. It also renders sourcing support services to its Associated Enterprise (‘AE’).

3. Under the trading business, the assessee purchases branded apparels and accessories from third party suppliers who manufactures for and on behalf of the assessee, for further resale to affiliate joint venture entity in India. In order to have the goods manufactured and procured through the contract manufacturers/ suppliers, Marks and Spencer plc, UK (‘M&S plc’ or ‘AE’) has licensed various rights to the assessee for latter’s efficient conduct of business operations in India. In addition to this, the assessee also availed services in relation to strategy and business development, marketing, buying and merchandising, logistics, IT and supply chain, human resource, finance, legal etc. from its AE. For obtaining such valuable rights and services the Assessee pays royalty @6% on trading sales revenue to its AE and a copy of the agreement is placed on record at Page Nos. 88-117 of the Paper Book.

4. Based on above, an amount of Rs.17,93,86,136 was paid by the assessee to its AE towards ‘Business services and license of proprietary marks’ being 6% of total revenue i.e., Rs.298,97,68,941 and the said international transaction (amongst others) was duly reported in the Accountant’s Report (Form No 3CEB) filed along with the assessee’s return of income and in this regard, he referred to page 82 of Paperbook which is relevant extract of copy of Form 3CEB.

5. Summary of the benchmarking analysis performed by the assessee is summarized in the table below and he referred page 35 of paperbook for relevant extract of TP documentation :-

relevant extract of TP documentation :-

relevant extract of TP documentation :-

relevant extract of TP documentation :-

relevant extract of TP documentation :-

relevant extract of TP documentation :-

relevant extract of TP documentation :-

relevant extract of TP documentation :-

relevant extract of TP documentation :-

6. The above results provide evidence that the subject international transactions of the assessee were at arm’s length in accordance with the Indian TP Regulations.

7. Further he brought to our notice that during the course of assessment proceedings, the Deputy/ Assistant Commissioner of Income Tax, Transfer Pricing officer- 1(3)(1) (TPO) sought information with regard to international transaction pertaining to ‘Payment for business services and license of proprietary marks’. In response to the queries raised by the Ld. TPO, the assessee duly submitted required information/ documents before the TPO through various submissions on a time-to-time basis.

8. The TPO disregarded the analysis/ documents provided by the assessee vide various submissions