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The mere fact that the Assessee was permitted to use the brand name “Valvoline? will not automatically lead to an inference that any expense that the Assessee incurred towards AMP was only to enhance the brand “Valvoline?. The onus was on the Revenue to show the existence of any arrangement or agreement on the basis of which it could be inferred that the AMP expense incurred by the Assessee was not for its own benefit but for the benefit of its AE. That factual foundation has been unable to be laid by the Revenue in the presentcase. On the basis of the existing record, the TPO has found no basis other than by applying the BLT, to discern the existence of international transaction. Therefore, no purpose will be served if the matter is remanded to the TPO, or even the ITAT, for this purpose.

Shanti Prime Publication Pvt. Ltd.

Sec. 92 of Income Tax Act, 1961 – Transfer Pricing – Addition made was deleted as Revenue was unable to show that there existed an international transaction between the Assessee and its AE in the first place.

Facts: “Whether in light of the decision in Maruti Suzuki Ltd. vs. CIT (2016) 381 Itr 117 (Del) the ITAT was justified in holding that there was an international transaction between the Assessee and its Associated Enterprise with regard to advertising, marketing and publicity (AMP) expenses and in remanding the matter to the Assessing Officer/Transfer Pricing Officer for determining the arms length price of such transaction for the purposes of transfer pricing adjustment?”

Held, that this Court is of the view that the ITAT was not justified in remanding the matter to the AO/TPO for determining the ALP of the alleged international transaction involving AMP expenses, when in fact, the Revenue was unable to show that there existed an international transaction between the Assessee and its AE in the first place. The question framed by this Court is answered in favour of the assessee – CIT Vs. VALVOLINE CUMMINS PVT. LTD. [2020] 424 ITR 162 (DEL)