PR. COMMISSIONER OF INCOME TAX-7, DELHI vs. TUPPERWARE INDIA PVT. LTD.

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ITA/399/2026HC DelhiDLHC01021300202613 May 2026Author: CASES PERTAINING TO SPL.DIVISION BENCHES3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal. Regarding questions A, B, and C, the Court noted that these were different facets of the same question that had already been decided by the same Court in its judgment dated 05.12.2025, in the case of the respondent-assessee itself (ITA 728/2025). Therefore, no fresh adjudication was required on these points. Concerning question D, the Court held that it was purely a finding of fact and an appreciation of evidence. The Court further stated that the justification of distribution compensation is a business exigency, and the assessee is the best judge of such matters. The Assessing Officer cannot substitute their judgment for that of the businessman unless there is a finding supported by cogent material that the amount was not paid or the payment was fraudulent. Since no such finding was recorded, the addition in this regard could not be sustained. The Court found no error in the ITAT's decision on this aspect.

What were the facts?

The appellant, Pr. Commissioner of Income Tax-7, Delhi, filed an appeal under Section 260A of the Income Tax Act, 1961, against an order of the Income Tax Appellate Tribunal (ITAT). The appeal was filed with a delay of 7 days, and a further delay of 35 days in re-filing, for which condonation applications were filed and allowed. The appeal pertains to the assessment year(s) not explicitly stated in the judgment. The core of the dispute revolves around adjustments related to Advertisement, Marketing, and Promotion (AMP) expenses and the allowability of distribution compensation. The respondent is Tupperware India Pvt. Ltd. The High Court noted that questions A, B, and C were identical to those decided in a previous judgment by the same court in the case of the respondent-assessee.

What were the issues?

The Tribunal had to decide the following substantial questions of law: 1. (A) Whether the ITAT was justified in treating the Buy-Low-Target (BLT) method for AMP adjustment as unsustainable, despite the matter being sub-judice before the Supreme Court? 2. (B) Whether the ITAT erred in not considering the Transfer Pricing Officer's (TPO) findings regarding the conduct of parties and ownership of intangibles (IPRs) in respect of AMP expenses, which established the existence of an international transaction? 3. (C) Whether the ITAT erred in not considering the TPO's findings that the taxpayer's routine activities resulted in brand building and enhancement as an exclusive benefit to the Associated Enterprise (AE), thus proving the substance of the transaction was more important than its form? 4. (D) Whether the ITAT erred in law in holding that the distribution compensation of Rs 15.22 crores was allowable under Section 37 of the Income Tax Act, 1961? Assessee's Contentions: The judgment does not record specific contentions made by the assessee (Tupperware India Pvt. Ltd.) in this appeal. However, the questions posed suggest the assessee likely argued against the AMP adjustments and in favour of the allowability of distribution compensation. Revenue's Contentions: The appellant (Revenue) argued that the ITAT erred in its approach to AMP adjustments, particularly by not considering the pending Supreme Court matter and the TPO's findings on international transactions, brand building, and ownership of intangibles. The Revenue also contended that the ITAT erred in allowing the distribution compensation under Section 37.

Which sections of the Income-tax Act were involved?

Section 260A,Section 37

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
$~288 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 399/2026 & CM APPL. 32146/2026 PR. COMMISSIONER OF INCOME TAX-7, DELHI .....Appellant Through: Mr. Puneet Rai, SSC with Mr.Ashvini Kr. & Mr. Rishabh Nangia, JSCs versus TUPPERWARE INDIA PVT. LTD. .....Respondent Through: CORAM: HON'BLE MR. JUSTICE DINESH MEHTA HON'BLE MR. JUSTICE OM PRAKASH SHUKLA

O R D E R %

13.05.

2026 CM APPL. 32147/2026 (condonation of delay in filing)

1.

This is an application filed by the appellant seeking condonation of 7 days‟ delay in filing the appeal.

2.

For the reasons stated in the application, the same is allowed and the delay of 7 days in filing the appeal stands condoned. CM APPL. 32148/2026 (condonation of delay in re-filing)

3.

This is an application filed by the appellant seeking condonation of 35 days‟ delay in re-filing the appeal.

4.

For the reasons stated in the application, the same is allowed and the delay of 35 days in re-filing the appeal stands condoned. ITA 399/2026

5.

By way of the present appeal preferred under Section 260A of the 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 15/05/2026 at 12:24:59

Income Tax Act, 1961, the appellant has proposed following substantial questions of law: “A. Whether on the facts and circumstances of the case and in law, the Ld. ITAT was justified in referring to various High Court decisions and treating the BLT method for AMP adjustment as unsustainable despite the matter being sub-judice and pending before the Hon'ble Supreme Court? B. Whether on the facts and circumstances of the case and in law, the Ld. ITAT erred in not considering the TPO's findings relating to the conduct of parties and ownership of intangibles (IPR's) in respect of AMP expenses, which established the existence of an international transaction in the case of the Assessee? C. Whether in the facts and circumstances of the case, the Ld. ITAT erred in not considering the facts brought on record by the TPO in his order, where the routine activities of the tax payer were resulting in brand building and enhancement as an exclusive benefit to the AE therefore proving that substance of the transaction was more important than the form? D. Whether the Ld. ITAT erred in law in holding that the distribution compensation of Rs 15.22 crores was allowable u/s 37 of the Income Tax Act, 1961?”

6.

Mr. Puneet Rai, learned Senior Standing Counsel for the appellant fairly informs that so far as questions „A‟, „B‟ & „C‟ are concerned, they are different facets of the same question, which stand decided by this Court vide its judgment dated 05.12.2025, rendered in the case of respondent-assessee itself (Re: ITA 728/2025 titled Pr. Commissioner of Income Tax-7, Delhi 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 15/05/2026 at 12:24:59

v/s Tupperware India Pvt. Ltd.).

7.

So far as question „D‟ is concerned, according to us, it is purely a finding of fact and appreciation of evidence. That apart, whether the distribution compensation was justified or not is a business exigency qua which the assessee itself is the best judge; the Assessing Officer cannot sit in the chair of the businessman and decide as to whether the distribution compensation was rightly granted or not. Unless there is a finding with cogent material that the amount shown to have spent on distribution compensation was not paid or the payment was fraudulent, addition in this regard cannot be sustained.

8.

The appeal is, therefore, dismissed. Pending application is also disposed of.

DINESH MEHTA, J

OM PRAKASH SHUKLA, J MAY 13, 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 15/05/2026 at 12:24:59

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