Sony Ericsson Mobile Communications India Pvt. Ltd. v. CIT

374 ITR 118High Court2015#139 most cited

What is Sony Ericsson Mobile Communications India Pvt. Ltd. v. CIT authority for?

The existence of an international transaction for Advertising and Marketing Promotion (AMP) expenditure requires the revenue to discharge the burden of proof. An explanation inserted under Section 92B does not automatically make AMP expenditure an international transaction.

499

judgments rely on this decision, according to BharatTax’s citation analysis of 366,470 Indian tax judgments — from 2015 to 2026.

Also referred to as

Sony Ericsson Mobile Communications India Pvt. Ltd. v. CIT · 374 ITR 118 · Section 92B · AMP expenditure · international transaction · bright line test · burden of proof · revenue

Also reported as

2015 SCC OnLine DEL 8083

Sections most often in play

Section 143(3)Section 92BSection 144C(13)Section 92CSection 234BSection 14ASection 37Section 37(1)
Read the full judgment

Issues it is cited on

bright line testamp expendituresection 92ffunctional analysiscost plus methodtested partysection 92c(3)section 92btransactional net margin methodcup methodbenchmarking analysiscomparable companies

Judgments citing Sony Ericsson Mobile Communications India Pvt. Ltd. v. CIT

M/S. Fujifilm India Private Limited, New Delhi vs. DCIT, New Delhi

Accordingly the appeal filed by the assessee stands statistically allowed

ITA 6916/DEL/2014[2010-11]Status: DisposedITAT Delhi29 Apr 2016AY 2010-11

Bench: Shri N. K. Saini & Smt. Beena Pillai

For Appellant: Sh. Nageshwar Rao, AdvFor Respondent: Sh. Amendra Kumar, CIT DR
Section 92

…IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH ‘I’, NEW DELHI BEFORE SHRI N. K. SAINI, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER I.T.A. NoS.6916 & 2535/Del/2014 (Assessment Years 2009-10 & 2010-11) Fujifilm India Pvt. Ltd. Vs. DCIT, Circle 11(1), C-1/114, Ground Floor, New Delhi Near Mata Chanan Devi Hospital And Lal Sai Mandir, Janakpuri, New Delhi GIR / PAN :AABCF1594J I.T.A.No. 424/Del/2016 (Assessment Year 2011-12) Fujifilm India Pvt. Ltd. Vs. DCIT, Circle 11(1), C-1/114, Ground Floor, New Delhi Near Mata Chanan Devi Hospital And Lal Sai Mandir, Janakpuri, New Delhi GIR / PAN :AABCF1594J…

Goodyear India Ltd., Faridabad vs. ACIT, New Delhi

ITA 5650/DEL/2011[2007-08]Status: DisposedITAT Delhi29 Apr 2016AY 2007-08

Bench: : Shri I.C. Sudhir & Shri L.P. Sahu

For Appellant: Mr. Ajay Vohra, Sr. AdvFor Respondent: Mr. Amrinder Singh, CIT-DR
Section 143(3)Section 144CSection 144C(5)Section 92C

…ts manufacturing segment. The Hon’ble Delhi Court, while adjudicating the batch of appeals against the transfer pricing adjustment on account of AMP expenses, in the case of Sony Ericsson Mobile Communications India Pvt Ltd vs CIT (ITA No 16/2014) reported as 374 ITR 118, upheld clubbing of closely linked transactions for undertaking benchmarking analysis applying entity wide TNMM holding as under: “80. The use of expression class of transaction functions performed by the parties in Section 92C(1) illustrates to the contrary, that the word transaction can never include and would exclude bundle or group of connect…

M/S. Lumax Industries Ltd., New Delhi vs. DCIT, New Delhi

In the result appeal of the assessee is partly allowed

ITA 6212/DEL/2013[2009-10]Status: DisposedITAT Delhi22 Apr 2016AY 2009-10

Bench: Shri Rajpal Yadav & Shri Prashant Maharishilumax Industries Ltd., Dcit, B-85/86, Mayapuri Industrial Area, Circle-4(1), Vs. Phase-1, New Delhi New Delhi Pan:Aadcr6902J (Appellant) (Respondent)

For Appellant: Sh. Pradeep Dinodia, AdvFor Respondent: Sh. Manu Chaurasia, Sr. DR
Section 143(3)Section 144CSection 144C(5)Section 14ASection 43BSection 92C

…of the assessee in ITA No.102/2014 dated 28.10.2015 has not admitted the appeal of the revenue with respect to the determination of ALP of royalty relying on the decision of CIT Vs. EKL Appliances Ltd. 345 ITR 241 and CIT Vs. Sony Ericson Mobile Communication 374 ITR 118. The coordinate bench for AY 2008-09 in ITA No.4456/Del/2012 in assessee’s own case has held as under:- “19. In this regard, it is seen that during the year, royalty was paid bythe Assessee to its AE on sales made using the trade mark of „Stanley‟;that the assessee is a widely held listed company, a market leader.The payment of royalty was for tr…

M/S. Honda Siel Power Products Ltd., Gautam Budh Nagar vs. DCIT, New Delhi

In the result, both the appeals of the assessee-company are partly allowed for statistical purposes

ITA 551/DEL/2014[2009-10]Status: DisposedITAT Delhi13 Apr 2016AY 2009-10

Bench: : Shri I.C. Sudhir & Shri L.P. Sahu

For Appellant: S/Sh. Neeraj Jain, AdvFor Respondent: Sh. Armendra Kumar, CIT/ DR
Section 143(3)Section 144CSection 2Section 92B

…arked under the Transfer Pricing Regulations. 1. No international transaction The said decision of Special Bench of the Tribunal recently was considered by the Hon’ble Delhi High Court in the case of Sony Ericsson Mobile Communications India Pvt. Ltd. Vs. CIT 374 ITR 118. In the said decision the Hon’ble Delhi High Court considered the case of limited risk distributors, i.e., Sony Ericsson, Canon and Reebok, etc., wherein, the existence of international transaction on account of AMP expenditure was admitted and reported. The Delhi High Court in the said decision upheld TP adjustment in respect of AMP expenses onl…

Toshiba India Pvt. Ltd., New Delhi vs. DCIT, New Delhi

In the result the appeal of the assessee is allowed for statistical purposes and the stay application is dismissed as infructuous

ITA 944/DEL/2016[2011-12]Status: DisposedITAT Delhi08 Apr 2016AY 2011-12

Bench: Sh. N. K. Saini, Am & Sh. Beena A. Pillai, Jm Assessment Year : 2011-12 & Stay Application No. 121/Del/2016 (In Ita No. 944/Del/2016) Assessment Year : 2011-12

For Appellant: Sh. Himanshu S. Shekhar, AdvFor Respondent: Sh. Amrendra Kumar, CIT(DR)
Section 143(3)Section 144Section 271(1)(c)Section 274Section 92BSection 92C

…at the very outset submitted that the issue under consideration deserves to be set aside to the TPO/AO as the issue now has been settled by the Hon’ble Jurisdictional High Court in the case of Sony Ericsson Mobile Communications Pvt. Ltd. vs. CIT reported at 374 ITR 118 and in the case of Maruti Suzuki India Ltd. vs. CIT in ITA no. 110/214 and 710/2015 order dated 11 December, 2015. It was further submitted that the aforesaid orders were not available to the T.P.O. / D.R.P. at the time of passing of their respective orders. It was also submitted the TPO/AO/DRP S.A. No.121/Del/2016 5 (In ITA No. 944/Del/2016)…

Hiraco Jewellery (India) P.Ltd, Mumbai vs. CIT (A) 15, Mumbai

In the result, the appeal of the assessee is allowed

ITA 7297/MUM/2014[2009-10]Status: DisposedITAT Mumbai31 Mar 2016AY 2009-10
Section 143(3)

…(TNMM), on aggregation of transactions, as prescribed under section 92C of the Income Tax Act, 1961". In this backdrop, we can usefully refer to the decision of Hon'ble Delhi High Court, in the case of Sony Ericsson Mobile Corporation Pvt Ltd Vs ACIT [(2015) 374 ITR 118(Del)] wherein Their Lordships had, inter alia, observed as follows: "Where the Assessing Officer/TPO accepts the comparables adopted by the assessed, with or without making adjustments, as a bundled transaction, it would be illogical and improper to treat AMP expenses as a separate international transaction, for the simple reason that if the func…

Rusabh Diamonds, Mumbai vs. Asst CIT 15(1), Mumbai

In the result, the appeal of the assessee is allowed and appeal of the revenue is dismissed as infructuous

ITA 2840/MUM/2014[2009-10]Status: DisposedITAT Mumbai31 Mar 2016AY 2009-10
Section 143(3)

…Nos.2840 & 2497/Mum/2014 C.O. No.110/Mum/2014 Assessment year: 2009-10 Page 10 of 30 under rule 10D(1)(k), that the transaction is at an arm’s length. Coming to the judicial precedent in the case of Sony Ericsson Mobile Corporation Pvt. Ltd. Vs. ACIT [(2015) 374 ITR 118 (Del)], he submits that the ratio of this case cannot be applied in the context of interest on delayed realization of debts for the simple reason that while AMP expenses, as in that case, are taken into account in the computation of the PLI, interest on delayed realization of debts is not taken into account in computation of the PLI. In other wor…

Gitanjali Exports Corpon. Ltd, Mumbai vs. Addl CIT RG 5(1), Mumbai

In the result, while appeal of the Assessing Officer is dismissed, the appeal of the assessee is allowed

ITA 142/MUM/2014[2008-09]Status: DisposedITAT Mumbai31 Mar 2016AY 2008-09
Section 10ASection 143(3)Section 2Section 27Section 36(1)(iii)Section 51

…(TNMM), on aggregation of transactions, as prescribed under section 92C of the Income Tax Act, 1961". In this backdrop, we can usefully refer to the decision of Hon'ble Delhi High Court, in the case of Sony Ericsson Mobile Corporation Pvt Ltd Vs ACIT [(2015) 374 ITR 118(Del)] wherein Their Lordships had, inter alia, observed as follows: "Where the Assessing Officer/TPO accepts the comparables adopted by the assessed, with or without making adjustments, as a bundled transaction, it would be illogical and improper to treat AMP expenses as a separate international transaction, for the simple reason that if the func…

Firestone Diamond P.Ltd, Mumbai vs. ITO WD 8(1)(4), Mumbai

In the result, the appeal is allowed

ITA 139/MUM/2014[2008-09]Status: DisposedITAT Mumbai31 Mar 2016AY 2008-09
Section 143(3)Section 92BSection 92C

…(TNMM), on aggregation of transactions, as prescribed under section 92C of the Income Tax Act, 1961". In this backdrop, we can usefully refer to the decision of Hon'ble Delhi High Court, in the case of Sony Ericsson Mobile Corporation Pvt Ltd Vs ACIT [(2015) 374 ITR 118(Del)] wherein Their Lordships had, inter alia, observed as follows: "Where the Assessing Officer/TPO accepts the comparables adopted by the assessed, with or without making adjustments, as a bundled transaction, it would be illogical and improper to treat AMP expenses as a separate international transaction, for the simple reason that if the func…

ACIT Cen Cir 2, Mumbai vs. Gitanjali Exports Corporation Ltd, Mumbai

In the result, while appeal of the Assessing Officer is dismissed, the appeal of the assessee is allowed

ITA 7662/MUM/2013[2008-09]Status: DisposedITAT Mumbai31 Mar 2016AY 2008-09
Section 10ASection 143(3)Section 2Section 27Section 36(1)(iii)Section 51

…(TNMM), on aggregation of transactions, as prescribed under section 92C of the Income Tax Act, 1961". In this backdrop, we can usefully refer to the decision of Hon'ble Delhi High Court, in the case of Sony Ericsson Mobile Corporation Pvt Ltd Vs ACIT [(2015) 374 ITR 118(Del)] wherein Their Lordships had, inter alia, observed as follows: "Where the Assessing Officer/TPO accepts the comparables adopted by the assessed, with or without making adjustments, as a bundled transaction, it would be illogical and improper to treat AMP expenses as a separate international transaction, for the simple reason that if the func…

Jcb India Ltd., New Delhi vs. DCIT, New Delhi

In the result, the appeal is allowed for statistical purposes

ITA 1075/DEL/2016[2011-12]Status: DisposedITAT Delhi31 Mar 2016AY 2011-12

Bench: Shri R.S. Syal, Am & Shri Kuldip Singh, Jm Assessment Year : 2011-12

For Appellant: Shri M.S. Syali, Sr. Advocate &For Respondent: Shri Amrendra Kumar, CIT, DR
Section 143(3)Section 144C(1)

…such a contention has been repelled by the tribunal for earlier years, still the ld. AR canvassed this 14 view before us by relying on the judgment of the Hon’ble jurisdictional High Court in Sony Ericsson Mobile Communications India (P) Ltd. VS. CIT (2015) 374 ITR 118 (Del), which in the opinion of the ld. AR, is an authority for the proposition that aggregation of all the international transactions for benchmarking under the TNMM is permissible and, there is no need to separately determine the ALP of any international transaction including `Payment of royalty’. 7.2. We are unable to countenance this conte…

Denso India Limited vs. Commissioner of Income Tax

ITA-443/2013HC Delhi29 Feb 2016
Section 143(1)Section 92C(2)

…nclusion. In fact, by all the five methods or any one of them, when applied to the fact that there is no necessity of payment, the result of "nil" ALP will come." 15. Sony Ericsson Mobile Communications India (P) Ltd v Commissioner of Income Tax (2015) 374 ITR 118 (Del) was a subsequent decision by another Bench of this Court, which reviewed the methodology that TPOs are to adopt while determining ALP. The said judgment held, inter alia, that: "137. The question of aggregation and disaggregation of transactions when the TNM Method or even in other methods is sought to be applied, must have reference t…

Molson Coors Cobra India P.Ltd ( Erstwhile Cobra Indian Beer P.Lt), Mumbai vs. DCIT 3(1), Mumbai

In the result, appeal of the assessee is partly allowed for statistical purposes

ITA 7119/MUM/2012[2007-08]Status: DisposedITAT Mumbai10 Feb 2016AY 2007-08

Bench: Shri D. Karunakara Rao & Shri Sanjay Gargi.T.A. No.7119/M/2012 (Assessment Year: 2007-2008) फनाभ/ Molson Coors Cobra India Dcit-Circle 3(1), Private Limited (Erstwhile R.No.607, Aayakar Bhavan, Vs. Cobra Indian Beer Private M.K. Road, Limited), Unit No.603/6 Th Mumbai – 400 020. Floor, Central Plaza, 166, C.S.T. Road, Kalina, Mumbai- 400 098. स्थामी रेखा सं./ Pan : Aabcc7215K (अऩीराथी /Appellant) .. (प्रत्मथी / Respondent) अऩीराथी की ओय से / Appellant By : Shri Sauzdbh Sparkar & Mr. Bandish Soparkar प्रत्मथी की ओय से/ Respondent By : Shri N.K. Chand-Cit & Shri Abhinahy Kumbhar, Dr सुनवाई की तायीख / Date Of Hearing : 01.02.2016 घोषणा की तायीख /Date Of Pronouncement : 10.02.2016 आदेश / O R D E R Per D. Karunakara Rao, Am:

For Appellant: Shri Sauzdbh Sparkar & MrFor Respondent: Shri N.K. Chand-CIT and Shri
Section 92C

…nts. 5. At the outset, Ld Counsel for the assessee submitted that the impugned order being dated 10.9.2012 by the CIT (A) was passed prior to the judgment of the Hon‟ble Delhi High Court in the case of Sony Ericsson Mobile Communications India Pvt Ltd vs CIT [374 ITR 118] and Maruti Suziki India Limited vs. CIT in ITA No. 110/ 2014 and ITA 710/2015, dated 11th December, 2015 and the coordinate Bench decision of the ITAT in the case of M/s. Johnson & Johnson Limited vs. ADIT vide I.T.A. No.829/M/2014 (AY 2009-2010), dated 07.01.2016. Summarising the above, Ld Counsel for the assessee submitted that the Ground no.2…

M/S Essilor India P Ltd, Bangalore vs. Deputy Commissioner of Income Tax, Bangalore

In the result, the both the appeals are treated as partly allowed

ITA 227/BANG/2015[2010-11]Status: DisposedITAT Bangalore05 Feb 2016AY 2010-11

Bench: Shri Vijay Pal Rao & Shri Inturi Rama Raoit(Tp)A No.29/Bang/2014 (Assessment Year: 2009-10) & It(Tp)A No.227/Bang/2015 (Assessment Year: 2010-11) M/S.Essilor India Pvt.Ltd. No.71/1, Brigade Plaza, 6Th Floor, S C Road, Gandhinagar, Bangalore-9. … Appellant Pan:Aaace 4623 J Vs. Deputy Commissioner Of Income-Tax, Circle 11(3), Bangalore. … Respondent

For Appellant: Shri S.Ramasubramanyam, CAFor Respondent: Smt. Neera Malhotra, CIT(DR)
Section 143(3)Section 14ASection 234C

…IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH, BANGALORE BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER and SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER IT(TP)A No.29/Bang/2014 (Assessment year: 2009-10) and IT(TP)A No.227/Bang/2015 (Assessment year: 2010-11) M/s.Essilor India Pvt.Ltd. No.71/1, Brigade Plaza, 6th floor, S C Road, Gandhinagar, Bangalore-9. … Appellant PAN:AAACE 4623 J Vs. Deputy Commissioner of Income-tax, Circle 11(3), Bangalore. … Respondent Appellant by : Shri S.Ramasubramanyam, CA Respondent by : Smt. Neera Malhotra, CIT(DR) Date of hearing : 08/12/2015 Date of pronouncement : 05/02/2016 O R D E R P…

Pr. Commissioner of Income Tax - 8 New Delhi vs. M/S Sony Mobile Communications (India) Pvt. Ltd

The appeals are disposed of in the above terms

ITA/648/2015HC Delhi28 Jan 2016

Bench: HON'BLE DR. JUSTICE S.MURALIDHAR,HON'BLE MR. JUSTICE VIBHU BAKHRU

Section 92B

…g Officer ('AO') to decide the issue in the light of that decision. 4. The decision of the Special Bench of the ITAT in LG Electronics (supra) was examined by this Court in Sony Ericsson Mobile Communications India P. Ltd. V. Commissioner of Income Tax (2015) 374 ITR 118 (Del). The decision of this Court was rendered on 16^*^ March 2015, which was shortly after the impugned order of the ITAT in the present case. One of the significant conclusions in Sony Ericsson (supra) was that the Bright Line Test ('BLT') could not be applied for either determining the existence of an intemational ITA Nos. 638/2015 <6 648/2015…

Sony Ericsson Mobile Communications India Pvt. Ltd vs. Deputy Commissioner of Income Tax

The appeals are disposed of in the above terms

ITA/638/2015HC Delhi28 Jan 2016

Bench: HON'BLE DR. JUSTICE S.MURALIDHAR,HON'BLE MR. JUSTICE VIBHU BAKHRU

Section 92B

…g Officer ('AO') to decide the issue in the light of that decision. 4. The decision of the Special Bench of the ITAT in LG Electronics (supra) was examined by this Court in Sony Ericsson Mobile Communications India P. Ltd. V. Commissioner of Income Tax (2015) 374 ITR 118 (Del). The decision of this Court was rendered on 16^*^ March 2015, which was shortly after the impugned order of the ITAT in the present case. One of the significant conclusions in Sony Ericsson (supra) was that the Bright Line Test ('BLT') could not be applied for either determining the existence of an intemational ITA Nos. 638/2015 <6 648/2015…

Honda Siel Power Products Limited vs. Deputy Commissioner of Income Tax

The appeal is allowed but in the circumstances no orders as to

ITA-346/2015HC Delhi23 Dec 2015
Section 260ASection 92C

…ITA 346/2015 Page 1 of 30 $~ * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 346/2015 Reserved on: September 21, 2015 Date of decision: December 23, 2015 HONDA SIEL POWER PRODUCTS LIMITED ..... Appellant Through: Mr. Ajay Vohra, Senior Advocate with Mr. Neeraj Jain and Mr. Aditya Vohra, Advocates. versus DEPUTY COMMISSIONER OF INCOME TAX ..... Respondent Through: Mr. G.C. Srivastava and Mr. D.S. Bhardwarj, Advocates. CORAM: JUSTICE S.MURALIDHAR JUSTICE VIBHU BAKHRU JUDGMENT % 23.12.2015 Dr. S. Muralidhar, J.: 1. Th…

Bausch & Lomb Eyecare (India) Pvt. Ltd

The appeals of the Assessee are allowed and the appeals of the Revenue

ITA/165/2015HC Delhi23 Dec 2015
Section 260A

…e novo consideration without finally adjudicating issues raised before the Tribunal and without correctly appreciating submissions of Appellant in view of decision of this Hon'ble Court in case of Sony Ericsson Mobile Communications India Pvt. Ltd v. CIT, 374 ITR 118? (c) Whether AMP expenditure incurred by Appellant for its business cannot be characterized as an 'international transaction' under the Act in the facts of present case? (d) Whether TPO is not empowered to look into the reasonableness, quantum and commercial expediency of AMP expenditure incurred by the Appellant for carrying on its bus…

Bausch & Lomb Eyecare (India) Pvt. Ltd

The appeals of the Assessee are allowed and the appeals of the Revenue

ITA/677/2014HC Delhi23 Dec 2015
Section 260A

…e novo consideration without finally adjudicating issues raised before the Tribunal and without correctly appreciating submissions of Appellant in view of decision of this Hon'ble Court in case of Sony Ericsson Mobile Communications India Pvt. Ltd v. CIT, 374 ITR 118? (c) Whether AMP expenditure incurred by Appellant for its business cannot be characterized as an 'international transaction' under the Act in the facts of present case? (d) Whether TPO is not empowered to look into the reasonableness, quantum and commercial expediency of AMP expenditure incurred by the Appellant for carrying on its bus…

Honda Siel Power Products Limited vs. Deputy Commissioner of Income Tax

The appeal is allowed but in the circumstances no orders as to

ITA/346/2015HC Delhi23 Dec 2015
Section 260ASection 92C

…ITA 346/2015 Page 1 of 30 $~ * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 346/2015 Reserved on: September 21, 2015 Date of decision: December 23, 2015 HONDA SIEL POWER PRODUCTS LIMITED ..... Appellant Through: Mr. Ajay Vohra, Senior Advocate with Mr. Neeraj Jain and Mr. Aditya Vohra, Advocates. versus DEPUTY COMMISSIONER OF INCOME TAX ..... Respondent Through: Mr. G.C. Srivastava and Mr. D.S. Bhardwarj, Advocates. CORAM: JUSTICE S.MURALIDHAR JUSTICE VIBHU BAKHRU JUDGMENT % 23.12.2015 Dr. S. Muralidhar, J.: 1. Th…