DCIT, CIRCLE- 27(1), NEW DELHI vs. UNICHARM INDIA PVT. LTD., GURGAON

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ITA 6104/DEL/2018Status: DisposedITAT Delhi30 July 2026AY 2010-1131 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the TPO's action of treating AMP expenses as an international transaction and applying the Bright Line Test was incorrect. It also directed the TPO to reconsider the ALP of import transactions by treating the foreign AE as the tested party, subject to the assessee providing evidence.

What were the facts?

The assessee, a subsidiary of a Japanese company, engaged in international transactions for purchase of goods and services. The Transfer Pricing Officer (TPO) made an adjustment to the Arm's Length Price (ALP) concerning Advertisement, Marketing, and Promotion (AMP) expenses and the purchase of goods.

What were the issues?

Whether AMP expenses constitute an international transaction and if the Bright Line Test is applicable. Whether the foreign AE can be considered the tested party for benchmarking import transactions.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144C(3),Section 92C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘I’, NEW DELHI

Before: SHRI SATBEER SINGH GODARA & SHRI MANISH AGARWAL

For Appellant: CA Ms. Preksha Gupta, AR
Hearing: 04.06.2026Pronounced: 30.07.2026

per law in light of our directions in the lead assessment year 2010-11. These assessee’s latter twin appeals ITA No. 6088/Del/2018 & 7414/Del/2019 are partly allowed in above terms. No other ground or argument has been pressed before us.

12.

To sum up, these assessee’s three appeals ITA No. 5938, 6088/Del/2018 & 7414/Del/2019 are partly allowed and Revenue’s twin cross appeals 6104 & 6203/Del/2018 are dismissed in above terms. A copy of this common order be placed in the respective case files.

Order Pronounced in the Open Court on 30.07.2026.

Sd/- Sd/- (MANISH AGARWAL) (SATBEER SINGH GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 30.07.2026 *Pooja Mittal, Sr. PS* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR

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