SWATCH GROUP (INDIA) PRIVATE LIMITED,NEW DELHI vs. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 22(2), C.R. BUILDING

ITA 5929/DEL/2024Status: DisposedITAT Delhi14 January 2026AY 2021-22Bench: SHRI CHALLA NAGENDRA PRASAD (Judicial Member), SHRI BRAJESH KUMAR SINGH (Accountant Member)1 pages
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What did the Tribunal hold?

The Tribunal held that the adjustment made by the Assessing Officer (AO) by applying the Bright Line Test in respect of AMP expenses is not sustainable in law, following the assessee's own case and High Court judgments. Consequently, the addition made by the AO was deleted.

What were the facts?

The assessee, Swatch Group (India) Private Limited, was assessed for AY 2021-22. The Transfer Pricing Officer (TPO) proposed an adjustment to Advertising, Marketing, and Promotion (AMP) expenses based on the Bright Line Test, considering the assessee's marketing functions created value for its Associated Enterprise (AE).

What were the issues?

Whether the Bright Line Test can be applied for transfer pricing adjustments on AMP expenses, and whether AMP expenses constitute an international transaction.

Which sections of the Income-tax Act were involved?

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

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Cases cited in this judgment(2)Show list

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Income Tax Appellate Tribunal, DELHI BENCH, I: NEW DELHI

Before: SHRI CHALLA NAGENDRA PRASAD & SHRI BRAJESH KUMAR SINGH

For Appellant: Shri Rohit Tiwari, Adv, Ms. Tanya, Adv
For Respondent: Shri Dharm Veer Singh, CIT(DR)
Hearing: 09.01.2026Pronounced: 14.01.2026

PER BRAJESH KUMAR SINGH, AM:

This appeal has been preferred by the assessee against the Final Assessment Order dated 29.10.2024 passed by the Learned Assessing Officer (AO) under Section 143(3) read with Sections 144C(13), r.w.s. 144B of the Income-tax Act, 1961 (“the Act”), pursuant to the directions of the Hon'ble Dispute Resolution Panel (DRP) order dated 09.09.2024 for the Assessment Year 2021-22. ITA No.- 5929/Del/2024 Swatch Group (India) Pvt. Ltd.

2.

Brief facts of the case: The Swatch Group Limited is based in Switzerland and the ultimate holding company of the Swatch Group, world's lar

The order continues below.

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