No AMP Adjustment When APA Margin is Followed | ITAT

Case Details: AstraZeneca Pharma India Ltd. vs. DCIT - [2025] 173 taxmann.com 922 (Bangalore-Trib.)

Judiciary and Counsel Details

• Chandra Poojari, Accountant Member & Soundararajan K., Judicial Member
• Nikhil Tiwari, A.R. for the Appellant.
• Ms Neera Malhotra, D.R. for the Respondent.

Facts of the Case

The assessee, a pharmaceutical company, entered into an Advance Pricing Agreement (APA) with the CBDT. During the relevant assessment year, the assessee incurred AMP expenses. The Transfer Pricing Officer (TPO) undertook a separate comparability analysis for companies engaged in providing marketing-related functions. The TPO determined the arm’s length margin on operating costs and added the same to the entire cost of AMP expenses to arrive at an adjustment.

Aggrieved by the order, the assessee preferred an appeal to the Bangalore Tribunal.

ITAT Held

The Tribunal held that the assessee relied on the decision of the Chennai Bench in the case of Nissan Motor India Pvt. Ltd. in IT(TP)A No.91/Chny/2018 and others dated 29.05.2024. In the said case, a similar argument of the assessee was considered, and it was observed that upon careful consideration of the impugned APA signed between the assessee and the CBDT, it was found that the said APA was valid for AYs 2014-15 to 2018-19.

Hence, all four pending appeals would fall under the purview of said APA, and as the assessee had reported its financial transactions in complete fulfilment of the stipulations postulated in the said APA, there was no case for the TPO to make any adjustment.

The addition made by the Assessing Officer was thus in conflict with the agreements done in the APA and, consequently, deserved to be quashed and set aside. Therefore, it was appropriate to remit the issue to the file of the Assessing Officer/TPO to be decided in the light of the above order of the Tribunal.

List of Cases Referred to

• Biocon Ltd. v. Dy. CIT (LTU) [2013] 35 taxmann.com 335/[2014] 144 ITD 21 (Bangalore – Trib.) (para 7.2)
• CIT v. Biocon Ltd. [2020] 121 taxmann.com 351/[2021] 276 Taxman 1/430 ITR 151 (Karnataka) (para 7.3)
• Qlik Tech India Private Limited v. DCIT ITA No.1140/Bang/2018) (para 7.6)
• Flipkart India (P.) Ltd. v. Asstt. CIT [2023] 150 taxmann.com 272/200 ITD 670 (Bangalore – Trib.) (para 7.7)
• Maruti Suzuki India Ltd. v. Addl. CIT [2010] 192 Taxman 317/328 ITR 210 (Delhi) (para 11.16)
• Honda Siel Power Products Ltd. v. Dy. CIT [2015] 64 taxmann.com 328/[2016] 237 Taxman 304 (Delhi) (para 11.16)
• Pr. CIT v. Wrigley India (P.) Ltd. [2023] 156 taxmann.com 245/459 ITR 2 (Delhi) (para 11.16)
• Sony Ericsson Mobile Communications India (P.) Ltd. v. CIT [2015] 55 taxmann.com 240/231 Taxman 113/374 ITR 118 (Delhi) (para 11.24).