IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘I’: NEW DELHI BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT AND SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No.940/Del/2023 (ASSESSMENT YEAR 2018-19)

Asst. CIT, Adidas India Marketing Circle-1(1), Private Limited Vs. Delhi.

Office No.6, 2^nd Floor, Sector B, Plot No.11, Vasant Kunj, South West, Delhi-110070.

PAN-AAACA5313P (Appellant) (Respondent)

Assessee by Dr. Shashwat Bajpai, Adv.

Department by Sh. Dharam Veer Singh, CIT-DR Date of Hearing 03/03/2025 Date of Pronouncement 12/03/2025

O R D E R

PER MANISH AGARWAL, AM:

This appeal is filed by the assessee against the final order passed u/s 143(3)/144C(13) of the Income Tax Act, 1961 (the Act, in short) by the Asst. Commissioner of Income Tax, Circle 1(1), Delhi (referred to as AO) dated 28/02/2023 vide DIN & letter No. ITBA/COM/F/17/2022-23/1050225372(1) for the Assessment Year

2018-19.

2. The assessee has challenged the final order by raising the following grounds of appeal:

“1. Final assessment order is void-ab-initio, bad in law and barred by limitation

1.1. On the facts and circumstances of the case and in law, the final assessment order dated February 28, 2023 passed by the learned Assistant Commissioner of Income tax, Circle 1(1), Delhi ('Ld. AO') is contrary to the provisions of the of the Income-tax Act, 1961 ('the Act') and is therefore void-ab-initio, bad in law and liable to be quashed

1.2. On the facts and circumstances of the case & in law, the final assessment Ld. AO dated February 28, 2023 passed by Ld. AO in contravention of the provisions of Section 144B(1)(xxix) of the Act which states that such order mandatorily to be passed by the National Faceless Assessment Centre and therefore, the order is without jurisdiction and liable to be quashed.

1.3. On the facts and circumstances of the case & in law, the final assessment Ld. AO dated February 28, 2023 is invalid and barred by limitation in view of the provisions of Section 144C(13) r.w.s. 144B(1) (xxix)

of the Act, and is therefore liable to be quashed.

Transfer Pricing ('TP') Grounds TP adjustment with respect to Advertisement, Marketing and Promotion ('AMP') expenditure

2. On the facts and circumstances of the case, & in law, the Ld. Ld. AO/ Learned Transfer Pricing Officer ('Ld. TPO') [in pursuance to the directions of the Dispute Resolution Panel ('Ld. DRP')]. erred in enhancing the income of the Appellant by INR 12,01,20,375/- (on substantive basis) and INR 31,27,93,371/- (on protective basis) holding that alleged excessive AMP expenses is an international transaction.

2.1. On the facts and circumstances of the case and in law, the Ld. DRP/TPO/AO erred in holding that alleged excessive AMP expenses is an international transaction and in not appreciating that incurring of AMP expenditure by the Appellant for its own business and benefit does not constitute an "International Transaction" in terms of the Section 928 of the Act, thereby violating the principles laid down by the jurisdictional High Court.

2.2. On the facts and circumstances of the case and in law, the Ld. DRP/AO/TPO erred in making an adjustment in respect of AMP expenses incurred by the Appellant on the ground that the intensity of the AMP function performed by the Appellant resulted in the creation of marketing intangible in respect of the brands owned by the Associated Enterprises ("AES").

2.3. On the facts and circumstances of the case and in law, the Ld. TPO/Ld. AO grossly erred in proposing adjustment basis an incorrect understanding of the functional profile of the Appellant, thereby characterizing it as a distributor instead of a manufacturer.

3. On the facts and circumstances of the case and in law, the Ld. DRP/AO/TPO erred in disregarding the judicial pronouncement/ findings of the Hon'ble Income-tax Appellate Tribunal ("ITAT") passed in Appellant's own case for Assessment Year(s) 2006-07 (ITA no. 3727/Del/ 2014), 2007- 08 (ITA No. 2770/Del/12 and C.O.85/Del/2013), 2008-09 (ITA 29/Del/14), AY 2010-11 (ITA No.1