Advertisement, Marketing and promotion expenses: Requirement to benchmark these expenses
Outcome: No substantial question of law
- The Assessee had incurred advertising, marketing and promotion expenses during the year under consideration.
- The Tribunal concluded that the said transaction constituted to be an international transaction and remanded the matter to Assessing Officer/Transfer Pricing Officer for determining the arms length price of such transaction.
- The Hon’ble High Court was in agreement with the order of Tribunal and hence, the appeal of revenue was dismissed.
- The Tribunal in its order concluded that the mere fact that the Assessee was permitted to use the brand name ‘Valvoline’ will not automatically lead to an inference that any expense that it was incurred towards advertising, marketing and promotion. The onus was on the Revenue to show the existence of any arrangement or agreement on the basis of which it could be inferred that the said expense incurred by the Assessee was not for its own benefit but for the benefit of its Associated Enterprise. Therefore, no purpose would be served if the matter was remanded to the Transfer Pricing Officer for this purpose.