PR. COMMISSIONER OF INCOME TAX, DELHI-7 vs. SUZUKI MOTORCYCLE INDIA PVT LTD
What did the High Court hold?
The Delhi High Court dismissed the appeals filed by the Revenue. The Court followed its own previous judgments in Sony Ericsson Mobile Communications India Pvt. Ltd. v. Commissioner of Income Tax and Maruti Suzuki Ltd. v. Commissioner of Income Tax, which held that the Bright Line Test is not a sanctioned method for determining AMP expenses. The Court clarified that the Revenue would not need to file separate appeals against the instant order. However, if the Revenue's pending appeals before the Supreme Court in the Sony Ericsson and Maruti Suzuki cases are allowed, the law declared therein would apply mutatis mutandis to the assessee's case, and the consequences would follow. The Court did not expressly leave any issue undecided, but the ultimate outcome for the assessee is contingent on the Supreme Court's decision in the pending appeals.
What were the facts?
The appeals were filed by the Pr. Commissioner of Income Tax, Delhi-7 (Revenue) under Section 260A of the Income Tax Act, 1961, challenging an order dated 22.11.2022 passed by the Income Tax Appellate Tribunal, Delhi Bench ‘I’. The Tribunal had rejected an Advertising, Marketing, and Promotion (AMP) adjustment by applying the Bright Line Test. The Tribunal's decision was based on the High Court's judgments in Sony Ericsson Mobile Communications India Pvt. Ltd. v. Commissioner of Income Tax and Maruti Suzuki Ltd. v. Commissioner of Income Tax. The Revenue's appeals questioned the Tribunal's reliance on these judgments, noting that the issue of AMP expenses was pending before the Supreme Court.
What were the issues?
1. Whether on the facts and circumstances of the case and in law, the Tribunal was justified in rejecting the Advertising, Marketing, and Promotion (AMP) adjustment by applying the Bright Line Test, by relying upon the cases of Sony Ericsson Mobile Communications India Pvt. Ltd. v. Commissioner of Income Tax and Maruti Suzuki Ltd. v. Commissioner of Income Tax, when the matter in these cases is pending before Hon’ble Supreme Court of India on the issue of AMP expenses? Assessee's contentions: The assessee argued that the High Court has consistently held in numerous cases that the Bright Line Test is not a legally sanctioned method for determining AMP expenses, and therefore, the appeals should be dismissed. The assessee also pointed out that the Supreme Court had rejected an SLP against the High Court's judgment in The Commissioner of Income Tax-LTU v. Whirlpool Of India Ltd. on a related issue. Revenue's contentions: The Revenue contended that the Supreme Court had not yet decided the appeals against the judgments in Sony Ericsson and Maruti Suzuki, and the very question of whether the Bright Line Test can be used to determine if AMP expenses constitute an international transaction was pending before the Supreme Court.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
O R D E R %
2026
By way of the present appeals preferred under Section 260A of the Income Tax Act, 1961, laying a challenge to the order dated 22.11.2022 passed by the Income Tax Appellate Tribunal, Delhi Bench ‘I’, New Delhi (hereinafter referred to as ‘the Tribunal’), the appellant/Department has proposed the following question of law: “Whether on the facts and circumstances of the case and in law, the Tribunal was justified in rejecting the Advertising, Marketing, and Promotion (AMP) adjustment by applying the Bright Line Test, by relying This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 12/08/2026 at 11:09:15
upon the cases of Sony Ericsson Mobile Communications India Pvt. Ltd. v. Commissioner of Income Tax [2015] 374 ITR 118 (Delhi) and Maruti Suzuki Ltd. v. Commissioner of Income Tax [2016] 381 ITR 117 (Delhi), when the matter in these cases is pending before Hon’ble Supreme Court of India on the issue of AMP expenses?”
The question itself suggests that the Tribunal has relied upon the judgments rendered by this Court in the cases of Sony Ericsson (supra) and Maruti Suzuki Ltd (supra).
Mr. Vohra, learned senior counsel for the respondent/assessee, submitted before us, a compilation containing a series of judgments and submitted that this Court has, in innumerable cases, held that the Bright Line Test is not a method sanctioned by law and therefore, the present appeals are liable to be dismissed.
He further submitted that SLP being SLP(C)29270/2016 titled Commissioner of Income Tax (LTU) v. M/s Whirlpool Of India Ltd., filed against the judgment dated 22.12.2015 rendered by this Court in ITA 610/2014 titled The Commissioner of Income Tax-LTU v. Whirlpool Of India Ltd., has also been rejected by the Supreme Court vide order dated 20.11.2024. 5. Mr. Rai, learned senior standing counsel for the appellant/Department, on the other hand, submitted that the SLP(s) against the judgments of this Court rendered in Sony Ericsson (supra) and Maruti Suzuki (supra) are pending and the very issue as to whether the Bright Line Test method can be used for the purpose of determining as to whether incurring AMP expenses
result in international transaction itself, is pending before the Supreme Court.
Having regard to facts and circumstances of the case, we dismiss these This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 12/08/2026 at 11:09:15
appeals filed by the Department, following the judgments of this Court in Sony Ericsson (supra) and Maruti Suzuki (supra). We, however, make it clear that the Revenue shall not be required to file separate appeal(s) against the order instant and in case, the SLP(s)/appeal(s) filed by the Revenue against the judgment rendered in Sony Ericsson (supra) and Maruti Suzuki (supra) is allowed, the law so declared shall mutatis mutandis apply to assessee’s case, as well and consequence shall follow.
All pending applications are also disposed.
DINESH MEHTA, J.
RAJNEESH KUMAR GUPTA, J. AUGUST 10, 2026 kk
This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 12/08/2026 at 11:09:15
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