IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘I’: NEW DELHI BEFORE SHRI YOGESH KUMAR U.S., JUDICIAL MEMBER AND SHRI AVDHESH KUMAR MISHRA, ACCOUNTANT MEMBER ITA No. 2969/Del/2017, A.Y.2009-10 Pioneer India Electronics Dy. Commissioner of Income Pvt. Ltd., Tax, Circle-2, 216, 2^nd Floor, Time Tower, Vs. Income Tax Office, M. G. Road, Gurgaon Udyog Vihar, PAN: AAECP8368H HSIIDC Building, Gurgaon (Appellant) (Respondent)

Appellant by Shri Nageswar Rao, Advocate Respondent by Sh. Bhopal Singh, Sr. DR Date of Hearing 23/06/2025 Date of Pronouncement 19/09/2025

ORDER

PER AVDHESH KUMAR MISHRA, AM This appeal of the assessee for the Assessment Year (‘AY’) 2009-10 is directed against the order dated 13^th March, 2017 of the Commissioner of Income Tax (appeal)-2, Gurgaon [‘CIT(A)’].

2. The assessee has raised following grounds:

“1. The Commissioner of Income Tax (Appeals), Gurgaon ("CIT (A)) based on the order passed by the Deputy Commissioner of Income Tax, Circle 2, Gurgaon (learned AO) and Additional Director of Income Tax (Transfer Pricing-II (1) ('learned TPO) under Section 92CA(3) of the income-Tax Act, 1961 ('the Act"), have erred in law and on facts of the case in framing the assessment at a total loss of INR 1,44,90,845/- as against total loss of

5,95,14,495/-computed by the Appellant.

2. The learned CIT (A)/AO/TPO erred in law and on the facts and circumstances of the case in making adjustment of INR 4,50,23,650/- to the total income of the appellant on account of adjustment in relation to Advertising, Marketing & Promotion Expenses (AMP) which is contrary to catena of decisions of Hon'ble High courts/Tribunal and is bad in law (herein after referred to as the "impugned transactions").

3. The learned CIT(A)/AO/TPO erred in law and on the facts and circumstances of the case in holding that the AMP expenditure incurred by the Appellant in India, being payments made to third parties, can be characterized as an international transaction' as per the provisions of the Act.

4. The learned CIT(A)/AO/TPO erred in law and on the facts and circumstances of the case to the extent it confirms adjustment under Transfer Pricing Regulations with reference to imaginary and non-existent international transactions of AMP, is bad in law as it is not in accordance with provisions of law.

5. On the facts and in circumstances of the case and in law, even if the word transaction is given its widest connotation, the learned CIT(A)/AO/TPO has failed to show the existence of an 'understanding' or an 'arrangement' or 'action in concert between the appellant and its AE as regards AMP spend for brand promotion:

6. The learned CIT(A) erred in upholding the transfer pricing adjustment on account of AMP expenses incurred by Appellant completely disregarding various decisions of Hon'ble High Court and coordinate benches of Hon'ble Tribunal.

7. The learned CIT(A)/AO/TPO erred in law and on the facts and circumstances of the case in making adjustment based on Brightline Test disregarding decisions of Hon'ble Delhi High Court.

8. The learned CIT(A)/AO/TPO erred in law and on the facts and circumstances of the case in failing to appreciate and apply the principles laid down by Hon'ble Delhi High Court and various tribunal decisions in letter and spirit, thereby proceeding to make separate adjustments towards AMP expenditure by reference to the very same comparables used for benchmarking other international transaction of import of finished goods. Thus, this duplicative approach that has been used is ultra vires under the law and should be held as invalid.

9. The learned CIT(A)/AO/TPO erred in law and on the facts and circumstances of the case in not appreciating that the Appellant has benefitted by using Pioneer brand without paying fee/royalty for the same.

10. The learned CIT(A)/AO/TPO erred in law and on the facts and circumstances of the case by falling to appreciate that AMP is a function performed by Appellant and is closely linked to overall business activities.

11. The