DCIT, CIRCLE-13(1), NEW DELHI vs. LG ELECTRONICS INDIA PVT. LTD., DELHI

Most of the issues are identical in all these years. Hence, they are taken up together and disposed of by this common order for the sake of convenience.

In the present case too, the assessee on its own has shown part reimbursement of AMP expenses as International Transaction. In other words, the assessee itself is admitting that international transaction shown by it in TP Study Report also included AMP expenses. Therefore, in light of such peculiar similarity, the ration of the decision in case of Sony Ericsson (supra), will squarely apply to facts of the instant case and AMP expenses will qualify as International Transaction.

In the case of the assessee, there is reimbursement of part of the AMP expenses by the A.E. Further the assessee is engaged in both licensed manufacturing and distribution activities. Hon'ble Special Bench decision in the case of the assessee elaborately discusses and records the role played by the foreign AE in deciding and guiding overall group strategy relating to AMP, which was followed by the assessee in India too. In light of the same, the ratio of decisions of Hon'ble ITAT Delhi in the cases of BMW India Ltd. (2017), 88 Taxmann.com 26 and Toshiba India Private Ltd.(2017), 85 Taxmann.com 298 are squarely applicable to the case of the assessee to hold that AMP expenses in case of the assessee will constitute International Transaction.

It is pertinent to highlight here that it is incorrect to say that existence of International Transaction on account of AMP expenses was not agitated by the assessee covered by the decision of Hon'ble Hight Court of Delhi in the case of Sony Ericsson (supra). Infact, one of the substantial questions of law raised by the petitioners was relating to question of existence of International Transaction on account of AMP expenses. However, in most of those case, it was claimed by the assessed that they were compensated by their AEs for AMP expenses in one way or other. For example, the assessee Sony Ericsson Mobile Communications India (P.) Ltd had claimed before Hon'ble ITAT that it had received some credit note from AE towards part of AMP expenses. In the case of the assessee, Canon India Pvt. Ltd., there was reimbursement of part AMP expenses. It was in the backdrop of such reimbursement or credit note from AE that the Hon'ble High Court has made observation in para 52 of its order in case of Sony Ericsson(supra). Orders of ITAT in these cases clarifies this aspect.

Further, as recorded by the TPO in its order for AY 2005-06 and 2006-07, the Assessee had not submitted the details called for during the course of hearing, which had bearing on determination of facts relating to role played by the AE with regard to AMP activities undertaken in India, for which expenses have been claimed as deduction by the assessee. In fact, the assessee submitted only very few sketchy details. In A.Y. 2011-12 too, the assessee did not furnish Transfer Pricing Policy of the group, AEs and same were not furnished (para 2.8.1 of TP order) This non-compliance from the side of assessee was specifically highlighted by the undersigned during the course of hearing, as it prevented the TPO from examining the factual aspect relevant to the issue, therefore such non-compliance should be viewed adversely against the assessee & presumption should be drawn that assessee did not produce such detail before TPO as the same could have unearthed the important role played by AE in deciding AMP activities in India.

Further, it is pertinent to mention here that Hon'ble High Court of Delhi in the case of Sony Ericsson Mobile Communications India (P.) Ltd. has clearly noted in Para 118 of its decision that assessed in those cases were engaged in both distribution and licensed manufacturing. Therefore, it would not be justified to restrict the ration of Delhi High court decision in case of Sony Ericsson Mobile Communications India (P.) Ltd (Supra) to a case of distributor only. The assessee is also engaged both as distributor and licenced manufacturer.

The decisions of Hon'ble Delhi High court in the case of Whirlpool of India Ltd (64 Taxmann.com 324), Bausch and Lomb Eyecare India Pvt Ltd. (ITA 643/2014) and Maruti Suzuki India Ltd. 64 Taxmann.com 150, do not support the case of the assessee due to distinguishable facts as highlighted during the course of hearing. In these cases, the BLT was used by the TPO to establish that AMP constituted International Transaction. This is not a case here. In instant case, Hon'ble Special Bench has elaborately discussed facts of the case such as Blue ocean strategy adopted by LG group in its decision mentioned above. Further, TPO has also discussed observations from TPSR and agreements to substantiate that AMP constitute an International Transaction dehors application of BLT. Further, in some of above cases decided by Hon'ble high court, reimbursement of AMP expense was not shown as an International Transaction, which is contrary to case of the present assessee. In fact, Hon'ble ITAT in case of BMW (I) Pvt. Ltd (supra) has distinguished the judgment in case of Maruti Suzuki in para 11 of its order. Said distinguishment exist vis-a vis case of the instant assessee too.

The assessee company is having three divisions namely 'Appliance and media division- Assembly segment, Appliance and media division- Distribution segment and Telecom division. The assessee has used TNMM as most appropriate method for benchmarking the transactions pertaining to each of these three divisions. However, it is noted that in its TP study report, the assessee has also shown several transactions which have been named as Appliance and media division - Common transaction, which are not forming part of any of above mentioned three divisions. These common transactions include 'Reimbursement of advertising and other expenses to LGEIL', Royalty paid, Design and Development Fee Paid, among others. In TPSR for AY 2011- 12, the assessee has put a note below 'Summary of the International Transactions Analysed' mentioning as under : "These transactions are closely linked to either assembly or distribution or both the segments of LGEIL. However, accurate division of these between the two is not possible. However, since both the segments of LGEIL are at arm's length, these transactions have also been considered to be at arm's length. It is evident from the perusal of above note and economic analysis forming part of the TP study report that these common transactions have effectively not being benchmarked by the assessee. Thus, the common transactions such as reimbursement advertising expenses, royalty paid, design and development fee paid have not been benchmarked either along with transactions mentioned in the assembly segment or transaction mentioned in distributor segment as they were not broken up and analysed segment wise and thus, no aggregated with or assigned to any of the segments. The assessee has basically presumed these common transactions to be at arm's length only because the transactions in distributor segment and assembly segment were found to be at arm's length. It is pertinent to mention here that the assessee has done segment wise benchmarking by using TNMM. Thus, when the assessee benchmarked the transactions of assembly or distribution segment by using TNMM, naturally it would have selected the comparables, which would have been in consonance or which would have been having similar FAR profile as the FAR profile of the assessee in these segments. Since the International Transaction categorised as common transactions or part of the such common transactions had not been aggregated or considered with any of the segments, it is quite obvious that while selecting the comparable for benchmarking of such segments, the assessee would not have selected comparable keeping in view the FAR associated with such common transaction. In fact, the assessee itself is not sure or not knowing which common transaction pertains to which segment or upto what extent. In the case of the assessee, therefore, it is very evident that the common transactions remained to be benchmarked by the assessee by using any of the prescribed method for benchmarking under TP laws. In view of the above discussion, it cannot be considered that the common transaction such as royalty paid, design and development fee paid, reimbursement of advtg. expenses were benchmarked by the assessee by way of aggregating the same with the transaction of either assembly segment or distribution segment. Facts of the case suggest that they remained to be benchmarked. Accordingly, the TPO was justified in benchmarking these transactions, which have been forming part of common transactions in TP study report separately on transaction-by- transaction basis. Copy of decisions discussed above have been submitted during the course of hearing. Further, it is submitted that earlier submission made on 23/01/2025 may kindly be taken in to consideration for purpose of all the Assessment years involving AMP issue.

In our considered opinion, while dealing with the issue of bench marking of AMP expenses, the Revenue needs to establish the existence of international transaction before undertaking bench marking of AMP expenses and such transaction cannot be inferred merely on the basis of BLT. For this proposition, we draw support from the judgment of the Hon'ble Delhi High Court in the case of Maruti Suzuki India Ltd 381 ITR 117.

In this case, the Hon'ble High Court held that existence of an international transaction needs to be established de hors the Bright Line Test. The relevant finding of the Hon‘ble High Court reads as under: "43. Secondly, the cases which were disposed of by the judgment, i.e. of the three Assessees Canon, Reebok and Sony Ericsson were all of distributors of products manufactured by foreign AEs. The said Assessees were themselves not manufacturers. In any event, none of them appeared to have questioned the existence of an international transaction involving the concerned foreign AE. It was also not disputed that the said international transaction of incurring of AMP expenses could be made subject matter of transfer pricing adjustment in terms of Section 92 of the Act. 44. However, in the present appeals, the very existence of an international transaction is in issue. The specific case of MSIL is that the Revenue has failed to show the existence of any agreement, understanding or arrangement between MSIL and SMC regarding the AMP spend of MSIL. It is pointed out that the BLT has been applied to the AMP spend by MSIL to (a) deduce the existence of an international transaction involving SMC and (b) to make a quantitative 'adjustment' to the ALP to the extent that the expenditure exceeds the expenditure by comparable entities. It is submitted that with the decision in Sony Ericsson having disapproved of BLT as a legitimate means of determining the ALP of an international transaction involving AMP expenses, the very basis of the Revenue's case is negated. XXX 51. The result of the above discussion is that in the considered view of the Court the Revenue has failed to demonstrate the existence of an international transaction only on account of the quantum of AMP expenditure by MSIL. Secondly, the Court is of the view that the decision in Sony Ericsson holding that there is an international transaction as a result of the AMP expenses cannot be held to have answered the issue as far as the present Assessee MSIL is concerned since finding in Sony Ericsson to the above effect is in the context of those Assessees whose cases have been disposed of by that judgment and who did not dispute the existence of an international transaction regarding AMP expenses. XXX 60. As far as clause (a) is concerned, SMC is a non-resident. It has, since 2002, a substantial share holding in MSIL and can, therefore, be construed to be a non-resident AE of MSIL. While it does have a number of 'transactions' with MSIL on the issue of licensing of IPRs, supply of raw materials, etc. the question remains whether it has any 'transaction' concerning the AMP expenditure. That brings us to clauses (b) and (c). They cannot be read disjunctively. Even if resort is had to the residuary part of clause (b) to contend that the AMP spend of MSIL is "any other transaction having a bearing" on its "profits, incomes or losses", for a 'transaction' there has to be two parties. Therefore for the purposes of the 'means' part of clause (b) and the 'includes' part of clause (c), the Revenue has to show that there exists an 'agreement' or 'arrangement' or 'understanding' between MSIL and SMC whereby MSIL is obliged to spend excessively on AMP in order to promote the brand of SMC. As far as the legislative intent is concerned, it is seen that certain transactions listed in the Explanation under clauses (i) (a) to (e) to Section 92B are described as 'international transaction'. This might be only an illustrative list, but significantly it does not list AMP spending as one such transaction.

The submission of the Revenue in this regard is: "The mere fact that the service or benefit has been provided by one party to the other would by itself constitute a transaction irrespective of whether the consideration for the same has been paid or remains payable or there is a mutual agreement to not charge any compensation for the service or benefit." Even if the word 'transaction' is given its widest connotation, and need not involve any Page | 16 transfer of money or a written agreement as suggested by the Revenue, and even if resort is had to Section 92F (v) which defines 'transaction' to include 'arrangement', 'understanding' or 'action in concert', 'whether formal or in writing', it is still incumbent on the Revenue to show the existence of an 'understanding' or an 'arrangement' or 'action in concert' between MSIL and SMC as regards AMP spend for brand promotion. In other words, for both the 'means' part and the 'includes' part of Section 92B (1) what has to be definitely shown is the existence of transaction whereby MSIL has been obliged to incur AMP of a certain level for SMC for the purposes of promoting the brand of SMC. XXX 68 In other words, it emphasises that where the price is something other than what would be paid or charged by one entity from another in uncontrolled situations then that would be the ALP. The Court does not see this as a machinery provision particularly in light of the fact that the BLT has been expressly negatived by the Court in Sony Ericsson. Therefore, the existence of an international transaction will have to be established de hors the BLT."

In the light of the aforesaid finding of the Hon'ble High Court, before embarking upon a benchmarking analysis, the Revenue needs to demonstrate on the basis of tangible material or evidence that there exists an international transaction between the assessee and the AE. Needless to mention, that the existence of such a transaction cannot be a matter of inference.

It is for the above reason that the BLT has been rejected as a valid method for either determining the existence of international transaction or for the determination of ALP of such transaction. Although, under Section 92B read with Section 92F (v), an international transaction could include an arrangement, understanding or action in concert, this cannot be a matter of inference. There has to be some tangible evidence on record to show that two parties have "acted in concert". XXX 37. The provisions under Chapter X do envisage a 'separate entity concept'. In other words, there cannot be a presumption that in the present case since WOIL is a subsidiary of Whirlpool USA, all the activities of WOIL are in fact dictated by Whirlpool USA. Merely because Whirlpool USA has a financial interest, it cannot be presumed that AMP expense incurred by the WOIL are at the instance or on behalf of Whirlpool USA. There is merit in the contention of the Assessee that the initial onus is on the Revenue to demonstrate through some tangible material that the two parties acted in concert and further that there was an agreement to enter into an international transaction concerning AMP expenses. XXX 39. It is in this context that it is submitted, and rightly, by the Assessee that there must be a machinery provision in the Act to bring an international transaction involving AMP expense under the tax radar. In the absence of any clear statutory provision giving guidance as to how the existence of an international transaction involving AMP Page | 18 expense, in the absence of an express agreement in that behalf, should be ascertained and further how the ALP of such a transaction should be ascertained, it cannot be left entirely to surmises and conjectures of the TPO. XXX 47. For the aforementioned reasons, the Court is of the view that as far as the present appeals are concerned, the Revenue has been unable to demonstrate by some tangible material that there is an international transaction involving AMP expenses between WOIL and Whirlpool USA. In the absence of that first step, the question of determining the ALP of such a transaction does not arise. In any event, in the absence of a machinery provision it would be hazardous for any TPO to proceed to determine the ALP of such a transaction since BLT has been negatived by this Court as a valid method of determining the existence of an international transaction and thereafter its ALP."

The case of the Revenue is that Indian subsidiary incurred certain expenses for the promotion of brands in India and for development of the Indian market and the creation of marketing intangibles in India which remain the functions of the parent company which is the entrepreneur. The brands are owned by the parent company. The Indian subsidiary only acts on behalf of the parent company. The Revenue alleges that eventual beneficiary of the acts of the Indian subsidiary is the parent company. Any benefit that may accrue to the Indian subsidiary is at best incidental to the entire exercise. This action of the Indian subsidiary amounts to rendering of a service to its foreign AE for which arm‘s length compensation was payable by foreign AE to its Indian subsidiary.

The case of the ld. DR is that the act of incurring of AMP expenses by the assessee is not a unilateral act and is an international transaction for following reasons:- i) Though, the AMP expenditure may be for the purpose of business of the assessee but it is in performance of function of market development for the brands and products of the AE that enhances the value of the marketing Page | 19 intangibles owned by the foreign AE, and hence there is a transaction of rendering of service of market development to the AE. ii) The short term benefit of the transaction accrues both to assessee and AE in terms of higher sales but long term benefit accrues only to the AE. iii) The benefit to the AE is not incidental but significant. Once, it is established that the act of incurring of AMP expenditure is not a unilateral act of the assessee; the AE needs to compensate the assessee for AMP expenses. iv) It is a fact that brands are valuable and even loss making enterprises having no real assets are purchased for substantial value for their brand and marketing intangibles. v) The issue is not that of transfer of marketing intangibles to AE as the brands and marketing intangibles are already owned by the AE. The issue is that of addition in the value of marketing intangibles owned by the AE owing to the services of development of brand and markets by the assessee for the AE and that of compensation for rendering these services not provided unilaterally by the assessee.‖ 19. We do not find any force in the aforesaid contentions of the ld. DR. As mentioned elsewhere, the Revenue needs to establish on the basis of some tangible material or evidence that there exists an international transaction of provisions of brand building service between the assessee and the AE. We find support from the decision of the Hon‘ble Delhi High Court in the case of Honda Seil Power Products Ltd vs DCIT ITA No 346/2015.

The aforesaid view that existence of an international transaction is a sine qua non for invoking the transfer pricing provisions contained in Chapter X of the Act, can be further supported by analysis of section 92(1) of the Act, which seeks to benchmark income / expenditure arising from an international transaction, having regard to the arm‘s length price. The income / expenditure must arise qua an international transaction, meaning thereby that the (i) income has accrued to the Indian tax payer under an international transaction entered into with an associated enterprise; or (ii) expenditure payable by the Indian enterprise has accrued / arisen under an international transaction with the foreign AE. The scheme of Chapter X of the Act is not to benchmark transactions between the Indian enterprise and unrelated third parties in India, where there is no income arising to the Indian enterprise from the foreign payee or there is no payment of expense by the Indian enterprise to the associated enterprise. Conversely, transfer pricing provisions enshrined in Chapter X of the Act do not seek to benchmark transactions between two Indian enterprises.

Considering the aforesaid contention of the Revenue, we are of the considered view that the Hon'ble High Court in the case of Maruti Suzuki India Ltd [supra] held that the findings of the Hon'ble High Court with regard to existence of international transaction was only with respect to the case of three limited risk distributors namely, Sony Ericsson, Canon and Reebok etc., wherein the existence of international transaction was admitted and not in dispute. The Court accordingly held that such findings in the case of Sony Ericsson cannot be applied to the case of the manufacturers.

The Hon'ble High Court held as under: "43. Secondly, the cases which were disposed of by the Sony Ericsson judgment, i.e. of the three Assessees Canon, Reebok and Sony Ericsson were all of distributors of products manufactured by foreign AEs. The said Assessees were themselves not manufacturers. In any event, none of them appeared to have questioned the existence of an international transaction involving the concerned foreign AE. It was also not disputed that the said international transaction of incurring of AMP expenses could be made subject matter of transfer pricing adjustment in terms of Section 92 of the Act. XXX 45. Since none of the above issues that arise in the present appeals were contested by the Assessees who appeals were decided in the Sony Ericsson Page | 22 case, it cannot be said that the decision in Sony Ericsson, to the extent it affirms the existence of an international transaction on account of the incurring of the AMP expenses, decided that issue in the appeals of MSIL as well."

At this stage, it would not be out of place to refer to para 6.38 of the OECD Transfer Pricing Guidelines which apply only to limited risk distributors and not to full risk manufacturers like the assessee. The said para from OECD TP Guidelines read as under: "6.38 Where the distributor actually bears the cost of its marketing activities (i.e. there is no arrangement for the owner to reimburse the expenditures), the issue is the extent to which the distributor is able to share in the potential benefits from those activities. In general, in arm‘s length transactions the ability of a party that is not the legal owner of a marketing intangible to obtain the future benefits of marketing activities that increase the value of that intangible will depend principally on the substance of the rights of that party. For example, a distributor may have the ability to obtain benefits from its investments in developing the value of a trademark from its turnover and market share where it has a long-term contract of sole distribution rights for the trademarked product. In such cases, the distributor‘s share of benefits should be determined based on what an independent distributor would obtain in comparable circumstances. In some cases, a distributor may bear extraordinary marketing expenditures beyond what an independent distributor with similar rights might incur for the benefit of its own distribution activities. An independent distributor in such a case might obtain an additional return from the owner of the trademark, perhaps through a decrease in the purchase price of the product or a reduction in royalty rate."

The Hon‘ble High Court in the case of Sony Ericsson Mobile Communications India Pvt Ltd (supra) has further held that no transfer pricing adjustment in respect of AMP expenses can be made where the assessee (Indian entity) has economic ownership of the brand/logo/trademark in question, in the case of long term right of use of the same. This principle also squarely covers the present case. The assessee has a long term agreement for the use of the trademark ‗LG‘ in India. This clearly evidences the fact that the economic benefit arising out of the alleged promotion of the AE‘s logo is being enjoyed by the assessee. There is a clear opportunity and reasonable anticipation for the assessee to benefit from the marketing activities undertaken by it. This is clearly evidenced by the significantly higher profits made by assessee compared to its industry peers and also the very sizeable year on year increase in its turnover. In view of the aforesaid, it is respectfully submitted that the economic Page | 23 ownership of the trademark ‗LG‘ rests with the assessee. The Hon‘ble High Court in the case of Sony Ericsson Mobile Communications India Pvt Ltd (supra) disagreed with the finding of the Special Bench that the concept of economic ownership is not recognized under the Act. The relevant observations in paras 151 to 154 of the judgement are reproduced hereunder: "151. Economic ownership of a trade name or trade mark is accepted in international taxation as one of the components or aspects for determining transfer pricing. Economic ownership would only arise in cases of long-term contracts and where there is no negative stipulation denying economic ownership. Economic ownership when pleaded can be accepted if it is proved by the assessed. The burden is on the assessed. It cannot be assumed. It would affect and have consequences, when there is transfer or termination of economic ownership of the brand or trademark.

Determination whether the arrangement is long-term with economic ownership or short-term should be ordinarily based upon the conditions existing at the start of the arrangement and not whether the contract is subsequently renewed. However, it is open to the party, i.e. the assessed, to place evidence including affirmation from the brand owner AE that at the start of the arrangement it was accepted and agreed that the contract would be renewed.

Economic ownership of a brand is an intangible asset, just as legal ownership. Undifferentiated, economic ownership brand valuation is not done from moment to moment but would be mandated and required if the assessed is deprived, denied or transfers economic ownership. This can happen upon termination of the distribution-cum-marketing agreement or when economic ownership gets transferred to a third party. Transfer Pricing valuation, therefore, would be mandated at that time. The international transaction could then be made a subject matter of transfer pricing and subjected to tax.

Brand or trademark value is paid for, in case of sale of the brand or otherwise by way of merger or acquisition with third parties…………….. Re-organisation, sale and transfer of a brand as a result of merger and acquisition or sale is not directly a subject matter of these appeals. As noted above, in a given case where the Indian AE claims economic ownership of the brand and is deprived or transfers the said economic ownership, consequences would flow and it may require transfer pricing assessment." (emphasis supplied) 29. As held by the Hon‘ble Delhi High Court in the case of Sony Ericsson Mobile Communications (supra), if the Indian entity is the economic owner of the brand and is incurring AMP expenses for the purpose of promotion of such brand, benefit is only received by the Indian entity. It wa submitted that the economic ownership of the brand rests with the assessee and accordingly, the assessee cannot be expected to seek compensation for the expenditure incurred on the asset economically owned by it. No Transfer Pricing adjustment on account of AMP expenses would be warranted. The aforesaid test is fully satisfied in the case of the assessee and the Transfer Pricing adjustment on account of AMP expenses made by the TPO is liable to be deleted.

The assessee being a full-fledged manufacturer, entire AMP expenditure is incurred at its own discretion and for its own benefit for sale of LG products in India. In the case of the appellant, the advertisements are aimed at promoting the sales of the product sold under trademark ‗LG‘ manufactured by the assessee and not towards promoting the brand name of the AE. In such circumstances, the alleged excess AMP expenditure does not result in an international transaction and the assessee cannot be expected to seek compensation for such expenses unilaterally incurred by it from the AE.

The Revenue has strongly objected for the aggregated bench marking analysis for the AMP. According to the Revenue, the assessee company has not been able to demonstrate that there is any logic or rationale for aggregation or that the transactions of advertisement expenditure and the other transactions in the distribution activity are inter- dependent, the clubbing of transactions cannot be allowed. According to the Revenue, bench marking of AMP transaction is to be carried out using segregated approach and for determination of ALP of such transactions, Bright Line is used as the tool.

This contention of the Revenue is no more good as BLT has been discarded by the Hon'ble High Court of Delhi as mentioned elsewhere. The Hon'ble High Court of Delhi in the case of Sony Ericsson Mobile Communications India Pvt Ltd in Tax Appeal NO. 16 of 2014 has held that if the Indian entity has satisfied Transactional Net Margin Method (TNMM), i.e., as long as the operating margins of the Indian enterprise are higher than the operating margins of comparable companies, no further separate compensation for AMP expenses is warranted. The Hon‘ble Court held as under: "101. However, once the Assessing Officer/TPO accepts and adopts TNM Method, but then chooses to treat a particular expenditure like AMP as a separate international transaction without bifurcation/segregation, it would as noticed above, lead to unusual and incongruous results as AMP expenses is the cost or expense and is not diverse. It is factored in the net profit of the inter-linked transaction. This would be also in consonance with Rule 10B(1)(e), which mandates only arriving at the net profit margin by comparing the profits and loss account of the tested party with the comparable. The TNM Method proceeds on the assumption that functions, assets and risk being broadly similar and once suitable adjustments have been made, all things get taken into account and stand reconciled when computing the net profit margin. Once the comparables pass the functional analysis test and adjustments have been made, then the profit margin as declared when matches with the comparables would result in affirmation of the transfer price as the arm's length price. Then to make a comparison of a horizontal item without segregation would be impermissible."

Considering the aforementioned findings of the Hon'ble Jurisdictional High Court of Delhi In the case in hand, the operating profit margin of the assessee is at 5.01% in the manufacturing segment and 4.52% in the distribution segment and the same is higher than that of the comparable companies at 4.04% in the manufacturing segment and 4.46% in the distribution segment. TNMM has undisputedly been satisfied. Since the operating margins of the assessee are in excess of the selected comparable companies, no adjustment on account of AMP expenses is warranted.

Considering the facts of the case in hand in totality, we are of the view that the Revenue has failed to demonstrate by bringing tangible material evidence on record to show that an international transaction does exist so far as AMP expenditure is concerned. Therefore, we hold that the incurring of expenditure in question does not give rise to any international transaction as per judicial discussion hereinabove and without prejudice to these findings, since the operating margins of the assessee are in excess of the selected comparable companies, no adjustment is warranted. Ground Nos. 3 to 3.34 of the assessee are allowed.‖ 5.11 We find that this tribunal in assessee‘s own case for AY 2009-10 in dated 15.02.2019 and for AY 2010-11 in dated 16.08.2022 had further elaborated on this issue by covering all the arguments of the ld CIT DR in this regard. More importantly the argument advanced by the present CIT DR before us had already been captured in the order passed by this Tribunal for AY 2010-11 dated 16.08.2022. The operative portion of the order are not reproduced herein for the sake of brevity. Respectfully following the aforesaid orders passed in assessee‘s own case, the transfer pricing adjustment made on account of AMP expense both on substantive as well as protective basis are hereby directed to be deleted. The grounds raised

We have given thoughtful consideration to the rival contentions. In our considered opinion, the assessee is free to conduct business in the manner that the assessee deems fit and the commercial or business expediency of incurring any expenditure has to be from the assessee‘s point of view, which means that the Assessing Officer cannot step into the shooes of a business man. In our considered view, an item of expenditure has to be incurred wholly and exclusively for the purpose of business of the assessee and whether the assessee has derived any benefit from incurring such expenditure is, according to us, irrelevant consideration for the purpose of determination of ALP.

There is no dispute that the brand LG is owned by LG Korea but such expenses are incurred for undertaking marketing or promoting sale of the group companies which includes the assessee. Therefore, it can be safely concluded that the same has been incurred for the purpose of the business of the assessee in ordinary course of its business.

We have already decided the quarrel relating to the aggregate bench marking while deciding Ground No. 4 relating to AMP expenses and the same reasoning would fully apply here also. 56. In so far as relevancy of the documents is concerned, we find that the following evidence and documents placed in the paper book, relate to the year under consideration:

In so far as allocation of expenses in proportion to sale is concerned, we find that the same is supported by the decision of the Hon'ble Madras High Court in the case of Manjushree Plantations Ltd 130 ITR 908 which has been approved by the Hon'ble Apex Court in the case of Consolidated Coffee 248 ITR 432 and also supported by the Hon'ble Delhi High Court in the case of EHPT India Pvt Ltd 350 ITR 41.

Considering the facts of the case in totality in light of the judicial decisions discussed hereinabove, and considering the past history of the assessee, we do not find any merit in the transfer pricing adjustment in respect of allocation of Asian Regional Headquarter expenses and direct the Assessing Officer/TPO to delete the same. Ground No. 6 is allowed.‖ 7.2 Respectfully following the same, this issue is decided in favour of the assessee and accordingly, grounds raised in this regard are hereby allowed.

Facts on record show that the TPO has made an adjustment of Rs. 19,17,39,195/- in respect of reimbursement of warranty service charges received from the AE on cost to cost basis. According to the TPO, the assessee is providing a service to the AE by servicing the warranty claims and, therefore, the assessee ought to have earned a mark-up of 32.95% on cost incurred for provisions of such services.

The ld. counsel for the assessee drew our attention to the decision of this Tribunal in assessee‘s own case for Assessment Year 2009-10 in wherein the Tribunal has decided this issue in favour of the assessee.

The ld. DR vehemently contended that providing service warrantee to the customers is a contractual obligation of the assessee and its primary responsibility. It is the say of the ld. DR that since the assessee is providing service, the assessee should also charge mark-up on the same.

The ld. DR further stated that there is no reciprocity in the arrangement and the mark up should have been charged for providing warranty support services. Once again, referring to the combined TNMM analysis, the ld. DR contended that the same does not benchmark this transaction and even otherwise, the margin of the assessee is less than that of the comparable companies. The ld. DR also contended that adjustment relating to products such as monitors compressors which are not covered under royalty agreement should be sustained.

After considering the rival contentions, we are of the considered view that the assessee, as an independent distributor, has sold the products purchased from the AE in the domestic market and has earned profit margin of 5.78% from such sale. In our considered opinion, warrantee is an inherent obligation of the assessee while selling products to third party customers. To discharge such obligation, the assessee has engaged third party service providers and entire functions related to rendering of such warranty services are performed by such third party service providers.

It is an undisputed fact that the products are imported from the AE, which is the manufacturer and, therefore, the ultimate warranty liability/cost is to be borne by manufacturing entity i.e. the AE. In such a scenario, the assessee is only acting as a pass through. The entire cost incurred in providing warranty services is reimbursed by the AE and now, such reimbursement, in our considered view, there is no basis for charging of mark-up by the assessee.

Further, we find that the facts are identical to the facts considered by this Tribunal in for Assessment Year 2009-10. Therefore, considering the facts in totality, in light of the decision already taken on this issue by this Tribunal, we direct the Assessing Officer/TPO to delete the impugned adjustment. Ground No. is 8 allowed.‖ 8.2 Respectfully following the same, the grounds raised by the assessee in this regard are hereby allowed.

Facts on record show that the assessee has paid a sum of Rs. 43.46 crores on account of payment for design and development services rendered by the AE. The TPO was of the firm belief that design and development services are covered Page | 35

Before us, it was strongly submitted that R&D department for each product of the assessee determines the need for carrying out changes in the design or specifications of the product and seeks assistance from the AE in case it does not have the technical know-how to carry out such modifications and on such service, the technical team of the AE undertakes the development of the product in consultation with the assessee and in light of the specifications provided by the assessee.

It is the say of the ld. counsel for the assessee that design and development fee specification relates to the customization of products specific to the assessee. The ld. counsel for the assessee vehemently stated that the AE performs R&D activities on a global basis to develop platform technologies for new products. However, modifications and customization of these products are needed for certain markets as per their local regulations and cultural needs.

The ld. counsel drew our attention to the license agreement dated 01.07.2001 entered into by the assessee with the AE and pointed out that it clearly provides for additional and separate consideration for new models designed and developed by the AE for the assessee as provided under clause 4.2 of the agreement. 81. The ld. counsel for the assessee further pointed out that out of the total design and development fee of Rs. 43,46 crores, a sum of Rs. 16,01 crores relates to products such as monitors and compressors which are not covered under royalty agreement.

The ld. counsel for the assessee further stated that for the purpose of applying the TNMM, operating profit was computed after taking into consideration payment towards design and development fee to the AE and since the operating margin of the assessee is in the range +/- 5% with that of the comparable companies, no adjustment is required.

We have given thoughtful consideration to the orders of the authorities below qua the rival contentions. At the very outset, we have to reiterate that the international transactions entered into by the assessee have been aggregated for the purpose of bench marking applying TNMM as the most appropriate method. The comparables selected by the assessee were earning average margin of 3.70% as against margin of the assessee at 4.70% for manufacturing segment. As mentioned elsewhere, and for the sake of repetition, we have to state that OPM of the assessee is within +/- 5% range of the comparable companies and, therefore, international transaction entered into by the assessee has to be considered being at arm‘s length.

Clubbing of closely linked transactions has also been upheld by the Hon'ble Delhi High Court in the case of Sony Ericsson Mobile Communications [supra] wherein the Hon'ble Jurisdictional High Court held that clubbing of closely linked, including continuous transactions, is permissible in appropriate cases. In the same breath, the Hon'ble High Court held that once the Revenue accepts the TNMM as the most appropriate method, then it would be inappropriate for the Revenue to treat a particular expenditure as a separate international transaction. The relevant findings read as under: ―82. There is considerable tax literature and text that CUP Method, i.e. Comparable Uncontrolled Price Method, RP Method, i.e. Resale Price Method and CP Method, i.e. Cost Plus Method can be applied to a transaction or closely linked, or continuous transactions. Profits Split Method and TNM Method grouped as ‗transactional profit methods', can be equally effective and reliable when applied to closely linked or continuous transactions. Thus, it would be inappropriate to proceed with the arm's length computation methods, with a pre-conceived suppositions on singularity as a statutory mandate. Clubbing of closely linked, which would include continuous transactions, may be permissible and not ostracized. Aggregation of closely linked transactions or segregation by the assessed should be tested by the Assessing Officer/TPO on the benchmark and the exemplar; whether such aggregation/ segregation by the assessed should be interfered in terms of the four clauses stipulated in Section 92C(3) of the Act, read with the Rules. It would, among other aspects, refer to the method adopted and whether reliability and authenticity of the arm's length determination is affected or corrupted. XXXXX Page | 38

Considering the facts of the case in totality in light of the afore-stated judicial decisions, we do not find any merit in the TP adjustment in respect of international transaction of payment of design and development charges. We, accordingly, direct the Assessing Officer/TPO to delete the same. Ground No. 9 is accordingly, allowed.‖ 9.2 Respectfully following the same, grounds raised by the assessee in this regard are hereby allowed.

Briefly stated, that the facts of the impugned issue are that the assessee is engaged in the business of manufacturing consumers electronics and home appliances. During the year under consideration, in order to manufacture such technologically advanced goods, the assessee has employed 3,970 people including 42 expatriates, who were also on the payroll of LG Korea.

During the course of scrutiny assessment proceedings and on examination of the claim, the AO disallowed the salary amounting to Rs. 36,33,50,841/– paid to the said 42 expatriates by holding that the said expatriates were of the holding company/AE LG Korea and were serving the business interest of the holding company and, therefore, salaries paid to such expatriates by the assessee was not incurred wholly and exclusively for the business interests of the assessee.

Before us, the ld. counsel for the assessee stated that there is no dispute that the expatriates were employees of LG Korea earlier and therefore, continued to have lien on their employment with LG Korea. But during the year under consideration were in total employment with, and were working under the direct control and supervision of the assessee. It is the say of the ld. AR that the assessee was legal and economic owner of such expatriates during the year under consideration.

The ld. counsel drew our attention to the employment letters and Form No. 16 issued by the assessee. The ld. counsel further stated that while employing these expatriates, the assessee has followed a strict, well defined recruitment process, headed by the HRD of the assessee and expatriates hired by the assessee had to go through recruitment process of the assessee and were selected on the basis of their skills and merits.

The ld. counsel further stated that the assessee shares the job description of the persons to be hired with its AE LG Korea which recommends the names of the people having requisite skills for the relevant job description. It was stated that the expatriates were employed by the assessee for the purpose of its business and were not deputed by the holding company to serve its business. It was also strongly contended that during the period of employment of expatriates, the remuneration for services was directly paid by the assessee and LG Korea was not responsible to pay any remuneration or perquisite for performing their responsibilities. Salary was paid by the assessee after deducting tax at source in accordance with the provisions of the Act and the same has been accepted by the revenue. 108. Reliance was placed on the decision of the Hon'ble Supreme Court in the case of Carborandum 108 ITR 335. 109. Per contra, the ld. DR strongly supporting the findings of the Assessing Officer, pointed out that it is LG Korea who nominates its employees for the purpose of deputation to the assessee. The ld. DR pointed out that only employees from LG Korea have been seconded to the assessee. It was further stated by the Page | 42

The ld. DR further contended that the AO/DRP has only contributed 25% cost of the salary of expats to the alleged PE of LG Korea in India.

We have considered the orders of the authorities below and have given thoughtful consideration to the rival submissions. We have also perused the employment agreement between the assessee and the expat employees. On perusal of the agreement it clearly shows that the expatriates were wholly and exclusively working for the business interest/benefit of the assessee and were not entitled to render service of any nature whatsoever to any other person. It is also true that the assessee follows a well-defined recruitment process which is headed by HRD of the assessee.

Process of recruitment, as exhibited at page 405 of the paper book Volume II, shows that a requisition for recruitment is raised to the HRD and on such a receipt of such a requisition, the HRD evaluates job requirement and requisite skills and competencies to fill vacant posts. Thereafter, requisition is made to LG Korea. Based on job profile, LG Korea nominate its employees and thereafter HRD of the assessee shortlists the employees from pool of names suggested by LG Korea and conducts independent interviews and finally the assessee takes final decision of recruitment. 113. Considering the entire factual matrix, the only logical conclusion that can be drawn is that, such expatriates were employees of the assessee during the year under consideration and worked under the direct control and supervision of the assessee for the purpose of business of the assessee, and for such services they were paid remuneration directly by the assessee, on which tax was deducted at source as per the relevant provisions of the Act, which part has not been disputed by the revenue. 114. The decision of the Hon'ble Supreme Court in the case of Carborandum [supra] squarely apply on the facts of the case, in as much, as the assessee company had taken such expatriates on its payroll on the basis of various agreements of employment, and such expatriate employees worked under the direct control of the assessee company for day to day working. Considering the facts of the case in totality, it can be safely concluded that the expatriates were wholly and exclusively working for the business interest of the assessee and payment of salary to such expatriates is allowable u/s 37 of the Act. We, accordingly, direct the Assessing Officer to delete the impugned addition. Ground No. 11 is allowed.‖ 10.2 Respectfully following the same, the grounds raised by the assessee in this regard are hereby allowed.

During the year under consideration, the assessee has received subsidies as under: - Subsidy from Maharashtra Government - Rs. 58,64,82,702/- - Subsidy from Uttar Pradesh Government - Rs. 25,42,18,072/-

The subsidy from Maharashtra Government was in respect of manufacturing unit in Ranjangaon, Pune. In order to encourage the dispersal of industries to the less developed areas of the State, the Maharashtra Government has announced for Industrial Policy of Maharashtra State Government 2001. Objective of the said policy is to accelerate the flow of investment and creating large scale employment opportunities.

An identical issue was considered by this Tribunal in assessee‘s own case in Assessment Year 2008-09 and in Assessment Year 20009- 10 in ITA No. 953/DEL/2014. All the issues raised by the ld. counsel and the Page | 44 reliance on the decisions have been duly considered by this Tribunal in earlier Assessment Years. Therefore, we do not find any reason to divulge from the decision taken in the earlier years.

The findings given by this Tribunal in Assessment Year 2009-10 in read as under: 41. An identical issue was considered and decided by the Tribunal in assessee‘s own case in for assessment year 2008-09 vide Ground No. 8 of that appeal. The relevant findings of the co-ordinate bench read as under: ―78. We have given thoughtful consideration to the orders of the authorities below. We have also considered the orders of the coordinate bench in assessee‘s own case and the various judicial decisions relied upon by the ld. AR. In A.Y 2002-03, the coordinate bench in ITA No. 1404/DEL/2007 has held as under: ―9. We have heard both the parties and gone through the material available on record. In this case the assessee had collected sales tax as a part of dealers' price. At the year end the sales tax portion, which formed the part of dealers' price had been bifurcated and has been claimed as capital subsidy. We have also gone through the Notification No. 1179 dated 31.03.1995 issued by the State Government of Uttar Pradesh. The State Govt. has provided sales tax exemption with an objective to promote the development of certain industries which have been set up or undertaken modernisation, diversification, backward integration by way of fixed capital investment of Rs.50 crores or more. The exemption of from sales tax or benefit of reduced rate of tax is available to those units which have started production or have carried out expansion or modernisation or backward integration etc. between 1.12.1994 and 31.03.2000. Para 2 of the notification specifies that the exemption or reduction in the rate of sales tax including the additional tax would not be more than 5 per cent of sale of goods. In case where tax rate was more than 5 per cent including additional tax, the balance was to be paid by the unit. Para7 (2) of the notification provides for the exemption of sales tax to the extent of exemption or reduction in tax. Item (2) of the Schedule includes Greater Noida Industrial Development Area wherein exemption from sales tax to the extent of 200 per Page | 45 cent of capital investment has been provided. None of the clauses of the Notification authorises the assessee to collect the sales tax and retain the same with it. The exemption of sales tax was available from the date of first sale or the date within the period of six months from the date of production, whichever is earlier. The said notification also provided that the eligibility certificate to the assessee will be issued by the joint/additional director of concerned Development Authority and the same will be produced before the concerned assessing officer. The Addl. Director Industries, Greater Noida Industrial Development Authority, vide letter No. 1344 dated 23/06/1999 issued eligibility certificate to the assessee. As per this certificate fixed capital investment is of Rs.51,57,95,446/-. The date of commencement of production is 9/03/1998 and the first sale was affected on 27th March, 1998. The assessee applied for exemption from trade tax [sales tax] vide application dated 10/09/1998. The exemption from trade tax [sales tax] was provided from 27th March, 1998 to 26th March, 2013 for a period of 15 years or till the time the exemption of sales tax was availed of to the extent of 200 per cent of fixed capital investment i.e. Rs.1,02,75,90,892/- whichever was earlier. This certificate also provided the items i.e. Colour TV, Washing machine and Air-conditioners on which exemption from sales tax was provided. Another certificate was issued on 27th September, 2000 vide letter No. 1519 in respect of printed circuit voice for CTV number 8,12,000 and Micro-wave Oven 1,00,000. In this certificate, the sales tax exemption in first three years has been provided to the extent of 100 per cent, next three years 75 per cent, next two years 50 per cent and next two years 25 per cent. In all exemption from sales tax was provided for 10 years.

In view of the aforesaid observations and respectfully following the various judicial precedents relied upon hereinabove, the Ground No. 12 qua the receipt of subsidy from Maharashtra Govt is decided in favour of the assessee. This order has to be read together with the earlier Tribunal order dated 16.08.2022 and MA order dated 31.03.2023.

In the result, the appeal of the assessee is allowed in view of the above mentioned terms.‖ 11.3 Respectfully following the same, grounds raised by the assessee in this regard are hereby partly allowed for AY 2011-12. The grounds raised by the assessee in this regard for AYs 2012-13, 2013-14 and 2014-15 are dismissed.

We find that an identical quarrel arose in Assessment Year 2008-09 and 2009-10 and this Tribunal in and in Assessment Year 20009-10 followed in has decided this issue as under: ―92. Ground Nos. 12 & 12.1 relate to disallowance of deduction under section 80JJAA of the Act to the extent of Rs. 29,06,091/- 93. Facts on record show that the assessee claimed deduction u/s 80JJAA of the Act amounting to Rs. 44,50,635/-. The said amount pertained to deduction in respect of additional wages paid in financial years 2005-06, 2006-07 and 2007-08. The Assessing Officer has allowed the deduction in respect of claim pertaining to the A.Y under consideration amounting to Rs. 15.44 lakhs and disallowed the claim of deduction pertaining to A.Y 2006-07 and 2007-08 amounting to Rs. 29.06 lakhs.

Before us, the ld. AR contended that due to the amendment in section 80JJAA of the Act, the assessee is very much entitled for the claim of deduction. It is the say of the ld. AR that the only dispute is whether workmen who joined the assessee company in the earlier years and worked for less than 300 days in that year and therefore, were not regarded as ―regular workmen‖ in that year. It is the say of the ld. AR that if the amendment is considered in its true perspective, such workmen will be considered as ―regular workmen‖ in the subsequent years in which their period of employment becomes equal to or more than 300 days.

Per contra, the ld. DR stated that the amendment brought in section 80JJAA is w.e.f. 1.4.2019 and, therefore, the same is not applicable for the year under consideration.

We have carefully considered the orders of the authorities below qua the issue. There is no dispute that he assessee satisfies all the conditions for claiming deduction u/s 80JJAA of the Act. For our convenience, section 80JJAA reads as under: ―80JJAA. (1) Where the gross total income of an assessee, being an Indian company, includes any profits and gains derived from any industrial undertaking engaged in the manufacture or production of article or thing, there shall, subject to the conditions specified in sub- Page | 50 section (2), be allowed a deduction of an amount equal to thirty per cent of additional wages paid to the new regular workmen employed by the assessee in the previous year for three assessment years including the assessment year relevant to the previous year in which such employment is provided. (2) No deduction under sub-section (1) shall be allowed— (a) if the business is formed by splitting up or the reconstruction of an existing business. "Provided further that where an employee is employed during the previous year for a period of less than two hundred and forty days or one hundred and fifty days, as the case may be, but is employed for a period of two hundred and forty days or one hundred and fifty days, as the case may be, in the immediately succeeding year, he shall be deemed to have been employed in the succeeding year and the provisions of this section shall apply accordingly;".

The claim of the assessee is that the workmen who joined in the preceding year in which such workmen worked for less than 300 days should be considered provided that the period of employment of such workmen is equal to or more than 300 days in the relevant previous year. What the assessee contends is that new workmen, who did not fall in the category of ―regular workmen‖, on account of employment being for less than 300 days in the year of appointment, should be considered as ―regular workmen‖ in the subsequent year, provided such workmen continue to be employed with the company and the total period of their employment is equal to or more than 300 days in the subsequent year. Thought this contention of the assessee has been take care of by the second proviso, but the same has been given effect from 1.4.2019.

If the effect of the second proviso is given retrospectively, then the assessee‘s claim of deduction is allowable. Memorandum explaining provisions of Finance Bill 2018 states that the amendment is intended to rationalize the deduction of 30% of additional wages ―by allowing the benefit for a new employee who is employed for less than the minimum period during the first year but continues to remain employed for the minimum period in subsequent year.

In our considered opinion, this amendment i.e. second proviso is clarifactory in nature and is intended to remove the anomaly so as to advance legislative intention of providing incentive to new worker for more than 300 days and must be given retrospective effect. For this proposition, we draw support from the judgment of the Hon'ble Supreme Court in the case of Allied Motors Pvt. Ltd Vs. CIT 224 ITR 677 [SC]. The relevant finding of the Hon'ble Supreme Court reads Page | 51

During the year under consideration, the assessee has paid royalty amounting to Rs. 177,56,06,674/- to LG Korea for the right to use technology and know how for manufacture and sale of goods. Basis the findings given in earlier Assessment Years, the Assessing Officer disallowed royalty amounting to Rs. 124,29,24,672/- being net of transfer pricing adjustment of Rs. 53,26,82,002/-.

An identical issue was considered by this Tribunal in assessee‘s own case in Assessment Year 2008-09 and in Assessment Year 20009- 10 in ITA No. 953/DEL/2014. The relevant findings read as under: ―43. Ground No. 10 relates to disallowance of Rs. 97,71,71,875/- out of aggregate royalty amounting to Rs. 1,39,59,59,821/- paid to LG Electronics, Korea holding the same to be in the nature of capital expenditure.

A similar issue was decided in favour of the assessee by the Tribunal in assessee‘s own case in for assessment year 2008-09 vide Ground No. 10 of that appeal. The relevant findings of the co-ordinate bench read as under:

Ground No. 12 raised by the assessee for AY 2011-12 is challenging the action of the ld AO in restricting the credit of TDS. This issue requires factual verification. Hence, this issue is restored to the file of the ld AO with a direction to give credit of TDS after due verification of the return of income as per law. Accordingly, ground No. 12 raised by the assessee for AY 2011-12 is allowed for statistical purposes.

The additional ground raised by the assessee goes to the root of the matter and being legal in nature for AY 2012-13 and 2013-14, hence, we admit the same.

Ground No. 4 raised by the revenue for AY 2011-12 is challenging the deletion of disallowance of Rs. 1,87,14,217/- on account of repairs and maintenance of plant and machinery and building. 19.1 We have heard the rival submissions and perused the material available on record. The assessee incurred on repairs and maintenance expenditure on account of labour, calibration charges, moulding charges etc to maintain already existing asset and not to bring any new asset into existence. The ld AO without assigning any specific reason proceeded to disallow a sum of Rs. 187,14,217/- on account of repairs and maintenance expenses incurred by the assessee for its business purposes, which stood rightly deleted by the ld DRP, on which we do not find any infirmity. Accordingly, ground No. 4 raised by the revenue for AY 2011-12 is dismissed.

Ground Nos. 5 and 6 raised by the revenue for AY 2011-12 are general in nature and does not require any specific adjudication. Hence, they are dismissed. Similarly, Ground Nos. 1 to 3.1 for AY 2011-12 raised by the assessee, Ground Nos. 1 to 1.2 for AY 2006-07, Ground Nos. 1 to 4.1 for AY 2014-15 raised by the assessee, Ground Nos. 1 to 1.2 for AY 2005-06, Ground Nos. 1 to 3.1 for AY 2012- 13 raised by the assessee, Ground Nos. 1 to 4.1 for AY 2013-14 are general in nature and does not require any specific adjudication.

With regard to chargeability of interest u/s 234B of the Act, the same is consequential in nature. With regard to chargeability of interest u/s 234C of the Page | 60 Act, the law is very well settled that the same shall be charged only on the returned income and not on the assessed income. With regard to chargeability of interest u/s 234D of the Act, the same is consequential in nature. Accordingly, ground raised by the assessee with regard to the various AYs are disposed of in the above mentioned terms.

In the result, the appeals of the assessee for AY 2005-06 and 2006-07 are partly allowed, appeals of the assessee for AY 2011-12 to 2014-15 are partly allowed for statistical purposes and appeal of the revenue for AY 2011-12 is dismissed.