ANDHRA PAPER LIMITED,RAJAHMUNDRY vs. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-1, RAJAHMUNDRY

ITA 349/VIZ/2024Status: DisposedITAT Visakhapatnam05 December 2025AY 2020-21Bench: SHRI RAVISH SOOD, HON'BLE (Judicial Member), SHRI S BALAKRISHNAN, HON'BLE (Accountant Member)13 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the assessee failed to demonstrate the commercial benefit derived from the trademark license agreements. Since the AE did not have a dominant presence in India and the assessee was marketing the foreign brand, the TPO was justified in quantifying the ALP as NIL.

What were the facts?

The assessee, Andhra Paper Limited, paid royalty to its Associate Enterprise (AE), IP-USA, for the use of trademarks. The assessee claimed these payments were at arm's length, benchmarking them using the Comparable Uncontrolled Price (CUP) method. The Transfer Pricing Officer (TPO) rejected this method, finding no commercial benefit to the assessee and determining the Arm's Length Price (ALP) as NIL.

What were the issues?

Whether the royalty payments made by the assessee to its AE for the use of trademarks were at arm's length, and if the assessee had demonstrated sufficient commercial benefit from such usage.

Which sections of the Income-tax Act were involved?

Section 92CA,Section 143(3),Section 144C(13),Section 144B

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Income Tax Appellate Tribunal, VISAKHAPATNAM “DIVISION” BENCH, VISAKHAPATNAM

Before: SHRI RAVISH SOOD, HON’BLE & SHRI S BALAKRISHNAN, HON’BLE

For Appellant: Shri Pankaj Sancheti, CA
For Respondent: Shri Badicala Yadagiri, CIT(DR)
Pronounced: 05.12.2025

PER SHRI S. BALAKRISHNAN, ACCOUNTANT MEMBER:

1.

This appeal is filed by the assessee against the final assessment order passed under section 143(3) r.w.s. 144C(13) r.w.s. 144B of Income Tax Act, 1961 (in short ‘Act’) dated 28.06.2024. I.T.A.No.349/VIZ/2024 Andhra Paper L

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