May 2026

The Income Tax Appellate Tribunal (ITAT), Delhi Bench, allowed the appeal of Whirlpool of India Ltd. for AY 2017-18, primarily on the issue of transfer pricing adjustments on Advertisement, Marketing and Sales Promotion (AMP) expenses. The Tribunal held that AMP expenses incurred by the assessee do not constitute an international transaction under section 92B, following the Delhi High Court’s decision in the assessee’s own case for AY 2008-09, which was upheld by the Supreme Court. The Bright Line Test for making protective adjustments was also rejected in light of the Sony Ericsson decision. Other issues, including disallowance of daughter marriage fund expenditure, foreign tax credit, and an additional ground regarding warranty expenditure, were remitted to the Assessing Officer for verification and fresh adjudication. The appeal was allowed with consequential relief.

The Gujarat High Court quashed revision notices under Section 263 of the Income Tax Act, 1961, issued by the Principal Commissioner against assessment orders passed under Section 153C. The Court held that the Assessing Officer had made thorough inquiries, considered the incriminating material (MoU), and relied on the DVO’s valuation report to make a plausible addition. The Commissioner’s attempt to revise the order on grounds that the Assessing Officer ignored the MoU and failed to initiate penalty proceedings was unsustainable. The Court emphasized that revisional powers cannot be used to substitute a plausible view with another, and the Assessing Officer had no jurisdiction to initiate penalty under Section 271D at the relevant time. The petitions were allowed.