Income Tax Appellate Tribunal - Chennai
Renault India Private Limited,Chennai vs Dcit, Circle 1, Ltu, Chennai on 7 May, 2026
आयकर अपीलीय अिधकरण, 'डी' ायपीठ, चे ई।
IN THE INCOME TAX APPELLATE TRIBUNAL
'D' BENCH: CHENNAI
ी एबी टी. वक , ाियक सद एवं सु ी पदमावती यस, लेखासद के सम#
BEFORE SHRI ABY T. VARKEY, JUDICIAL MEMBER AND
MS. PADMAVATHY.S, ACCOUNTANT MEMBER
आयकर अपील सं ./IT(TP)A No.14/Chny/2026
िनधा%रण वष% /Assessment Year: 2022-23
Renault India Pvt. Ltd., The Dy. Commissioner of Income
7/1,7/3,8/1,9,10 & 11, Vs. Tax,
Work Easy Space Solution, Circle-1, LTU,
Block No.20, Velacheri Main Road, Chennai.
Velachery, Chennai - 600 042.
PAN: AADCR 2042M
(अपीलाथ /Appellant) ( यथ /Respondent)
अपीलाथ की ओर से/ Appellant by : Mr.Sriram Seshadri, C.A
)*थ की ओर से /Respondent by : Mr. A. Sasikumar, CIT
सुनवाई की तारीख/Date of Hearing : 30.04.2026
घोषणाकी तारीख /Date of Pronouncement : 07.05.2026
आदे श / O R D E R
PER PADMAVATHY.S, A.M:
This appeal by the assessee is against the final order of the assessment passed by Assessment Unit (in short "AO") passed u/s. 143(3) r.w.s 144C(13) of the Income Tax Act, 1961 (in short "the Act") dated 28.11.2025 for Assessment Year (AY) 2022-23. The assessee raised the following grounds of appeal:
"General Ground
1. The order dated November 28, 2025 ("Impugned Order") passed under section 143(3) read with sections 144C(13) and 144B of the Income Tax act, 1961 ("the act"), in so far as it is prejudicial to the IT(TP)A No.14/Chny/2026 Renault India Pvt. Ltd.
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appellant, is without jurisdiction, bad in law, violative of principles of judicial discipline, erroneous on the facts and unsustainable in law, been passed without adequate inquiries and hence is liable to be quashed as such.
Jurisdictional Ground
2. The Impugned Order is void-ab-initio, invalid and without jurisdiction on account of being barred by the period of limitation prescribed under Section 153 of the Act and is liable to be quashed as such.
Transfer Pricing Grounds - Adjustment towards advertisement expenses 3 The Lower Authorities erred in confirming an upward TP adjustment of INR 173.40 Crores towards the alleged international transaction of brand-building activities, disregarding the binding decisions of the Hon'ble ITAT in the Appellant's own cases for AY 2012-13 and AY 2020-21, which held on identical facts that such transactions are not 'international transactions' under the Act.
4. The Lower Authorities erred in treating the advertisement and sales/product promotion expenses incurred by the Appellant towards domestic unrelated parties for its own business as 'international transactions', baselessly alleging these constituted brand-building services for its overseas Associated Enterprises ("AES").
5 Without prejudice, the Ld. TPO erred in arbitrarily allocating 50% of the Appellant's sales/product promotion expenses towards the alleged brand-building services to its AEs and in erroneously determining an arm's length margin thereon, by referring to companies engaged in brand promotion services.
Corporate tax Grounds
6. The Ld. AO erred in making the Transfer Pricing adjustment under the head Income from Other Sources instead of Profits or Gains from Business or Profession.
7 The Ld. AO erred in not considering the brought-forward business loss and Unabsorbed depreciation eligible for set off, in computing the assessed income.
The Appellant prays that directions be given to grant all such relief arising from the grounds of appeal mentioned supra and all consequential relief thereto. The Appellant craves leave to add to and/or to alter, amend, rescind, modify the grounds herein above or produce further documents before or at the time of hearing of this Appeal."
IT(TP)A No.14/Chny/2026 Renault India Pvt. Ltd.
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2. The assessee is a private limited company and is the subsidiary of Renault Group BV, Netherlands holding 99.69%. The ultimate holding company of the assessee is Renault SAS which is based out of France. In FY 2012-13, the assessee started manufacturing Renault brand cars in India. For AY 2022-23, the assessee filed the return of income on 29.11.2022 declaring Nil income. The case was selected for scrutiny and the statutory notices were duly served on the assessee. Since the assessee had international transactions, the A.O made a reference to the Transfer Pricing Officer (TPO) to determine the Arm's Length Price (ALP) of the international transactions. The TPO noticed that the assessee during the year under consideration has incurred expenditure to the tune of Rs. 327,57,57,314/- towards advertisement and sales promotion (AMP) and in this regard sent a show cause notice to the assessee proposing as to why a TP adjustment cannot be made towards 50% of the expenditure with the market of 5.87%. The assessee submitted that the entire expenditure is incurred in India for the promotion of sale of car in India by the assessee and hence, the same cannot be treated as international transaction. The assessee further submitted that the payments have been made to unrelated third parties and the benefit if any accruing to the AE is only incidental. Accordingly, the assessee submitted that no adjustment is warranted. The TPO however did not accept the submission of the assessee and held that the AMP expenditure incurred by the assessee benefits the AE in brand building and therefore need to be recovered from the AE.
Accordingly, the TPO made an adjustment of Rs.173,40,22,134/-. The A.O passed the draft assessment order incorporating the TP adjustment. Aggrieved, the assessee filed further objections before the Disputes Resolution Panel (DRP), who confirmed the TP adjustment. The assessee is in IT(TP)A No.14/Chny/2026 Renault India Pvt. Ltd.
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appeal before the Tribunal against the final assessment order passed by the A.O pursuant to the directions of the DRP.
3. Ground No.1 is general and does not warrant any separate adjudication. The Ld. AR during the course of hearing submitted that ground No.2 on the legal issue with regard to limitation is not pressed and hence the same is dismissed as not pressed.
4. Ground No.3 to 5 is with regard to TP adjustment towards AMP expenses. The Ld. Authorized Representative (AR) of the assessee submitted that the impugned issue of TP adjustment towards AMP expenses is considered by the Coordinate Bench of the Tribunal in assessee's own case for AY 2020-21 [IT(TP)A No.43/Chny/2024 dated 24.02.2025]. The Ld. AR further submitted that the AMP expenses are neither incurred at the instance of the foreign AE nor was there any mutual agreement or understanding with regard to allocation etc. by the AE towards the reimbursement of any part of AMP expenses. The Ld. AR also submitted that in the absence of any understanding or arrangement no transaction or international transaction could be said to be involved with respect to such expenditure incurred by domestic enterprise which may be covered by the TP regulations. The Ld. AR also placed reliance on the decision of the coordinate Bench in the case of Hyundai Motors India Ltd. vs. DCIT [IT(TP)A No.56/Chny/2024 dated 28.02.2025] and also the decisions in assessee's own case for AY 2016-17 & AY 2020-21
5. The Ld. Departmental Representative (DR), on the other hand, relied on the orders of the lower authorities.
IT(TP)A No.14/Chny/2026 Renault India Pvt. Ltd.
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6. We have heard the parties, and perused the material available on record. We notice that the Coordinate Bench in assessee's own case for AY 2020-21 (IT(TP)A No.43/Chny/2024 dated 24.02.2025) has considered an identical issue where it has been held that:
"9. We have heard both the parties and perused the orders of the lower authorities and order of the co-ordinate bench of Tribunal in assessee's own case. The decision of Co-ordinate Bench of the Tribunal in assessee's own case in ITA No. 1078/Mds/2017, for assessment year 2012-2013 dated 30.01.2018, which is reproduced hereunder:-
20. We have considered the rival contentions and perused the orders of the authorities below. Ld. TPO had found expenditure of ₹123.80 crores incurred by the assessee towards advertisement and sales promotion expenses as helping the promotion of "Renault" brand in India. According to him, assessee had mentioned this in its own business plan. Though the assessee argued against any adjustment on brand promotion, relying on the judgment of Hon'ble Delhi High Court in the case of Maruti Suzuki India Ltd (supra), Id. TPO did not accept it. According to him, in the case of the assessee there was an admission that it was promoting "Renault" brand. In our opinion, just because assessee mentioned that marketing expenditure incurred by it helped promotion of Renault brand in India, it cannot be presumed that such expenditure resulted in any "international transaction. What was observed by the Id. TPO in its order on this issue is reproduced hereunder:-
Here it is the assessee's own admission that its business plan is "distribution of Renault Cars in India and to promote the Renault brand in India and to create a market share for Renault cars in India. Therefore no further evidence is required to make out an international transactions either by going through BLT or otherwise".
Expenditure was incurred by the assessee, to create market share for its Cars and marginal benefits derived by its principal abroad, as an off shoot cannot in our opinion convert it to a international transaction. Hon'ble Delhi High Court in the case of Maruti Suzuki India Ltd (supra), had held as under at paras 68 to 86 of its judgment:-
"68. The above submissions proceed purely on surmises and conjectures and if accepted as such will lead to sending the tax authorities themselves on a wild-goose chase of what can at best be described as a "mirage". First of all, there has to be a clear statutory mandate for such an exercise. The court is unable to find IT(TP)A No.14/Chny/2026 Renault India Pvt. Ltd.
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one. To the question whether there is any "machinery" provision for determining the existence of an international transaction involving AMP expenses, Mr. Srivastava only referred to section 92F(ii) which defines arm's length price to mean a price "which is applied or proposed to be applied in a transaction between persons other than associated enterprises in uncontrolled conditions".
Since the reference is to "price" and to "uncontrolled conditions" it implicitly brings into play the bright line test. 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 arm's length price. The court does not see this as a machinery provision particularly in light of the fact that the bright line test has been expressly negatived by the court in Sony Ericsson. Therefore, the existence of an international transaction will have to be established dehors the bright line test.
69. There is nothing in the Act which indicates how, in the absence of the bright line test, one can discern the existence of an international transaction as far as AMP expenditure is concerned. The court finds considerable merit in the contention of the assessee that the only transfer pricing adjustment authorised and permitted by Chapter X is the substitution of the arm's length price for the transaction price or the contract price. It bears repetition that each of the methods specified in section 92C(1) is a price discovery method. Section 92C(1) thus is explicit that the only manner of effecting a transfer pricing adjustment is to substitute the transaction price with the arm's length price so determined. The second proviso to section 92C(2) provides a "gateway" by stipulating that if the variation between the arm's length price and the transaction price does not exceed the specified percentage, no transfer pricing adjustment can at all be made. Both section 92CA, which provides for making a reference to the Transfer Pricing Officer for computation of the arm's length price and the manner of the determination of the arm's length price by the Transfer Pricing Officer, and section 92CB which provides for the "safe harbour"
rules for determination of the arm's length price, can be applied only if the transfer pricing adjustment involves substitution of the transaction price with the arm's length price. Rules 108, 10C and the new rule 10AB only deal with the determination of the arm's length price. Thus for the purposes of Chapter X of the Act, what is envisaged is not a quantitative adjustment but only a substitution of the transaction price with the arm's length price.
70. What is clear is that it is the "price" of an international transaction which is required to be adjusted. The very existence of an international transaction cannot be presumed by assigning some IT(TP)A No.14/Chny/2026 Renault India Pvt. Ltd.
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price to it and then deducing that since it is not an arm's length price, an "adjustment" has to be made. The burden is on the Revenue to first show the existence of an international transaction. Next, to ascertain the disclosed "price" of such transaction and thereafter ask whether it is an arm's length price. If the answer to that is in the negative the transfer pricing adjustment should follow. The objective of Chapter X is to make adjustments to the price of an international transaction which the associated enterprises involved may seek to shift from one jurisdiction to another. An "assumed" price cannot form the reason for making an arm's length price adjustment.
71. Since a quantitative adjustment is not permissible for the purposes of a transfer pricing adjustment under Chapter X, equally it cannot be permitted in respect of AMP expenses either. As already noticed hereinbefore, what the Revenue has sought to do in the present case is to resort to a quantitative adjustment by first determining whether the AMP spent by the assessee on application of the bright line test, is excessive, thereby evidencing the existence of an international transaction involving the associated enterprise. The quantitative determination forms the very basis for the entire transfer price exercise in the present case.
72. As rightly pointed out by the assessee, while such quantitative adjustment involved in respect of AMP expenses may be contemplated in the taxing statutes of certain foreign countries like U.S.A., Australia and New Zealand, no provision in Chapter X of the Act contemplates such an adjustment. An AMP transfer pricing adjustment to which none of the substantive or procedural provisions of Chapter X of the Act apply, cannot be held to be permitted by Chapter X. In other words, with neither the substantive nor the machinery provisions of Chapter X of the Act being applicable to an AMP transfer pricing adjustment, the inevitable conclusion is that Chapter X as a whole, does not permit such an adjustment.
73. It bears repetition that the subject matter of the attempted price adjustment is not the transaction involving the Indian entity and the agencies to whom it is making payments for the AMP expenses. The Revenue is not joining issue, the court was told, that the Indian entity would be entitled to claim such expenses as revenue expense in terms of section 37 of the Act. It is not for the Revenue to dictate to an entity how much it should spend on AMP, That would be a business decision of such entity keeping in view its exigencies and its perception of what is best needed to promote its products. The argument of the Revenue, however, is that while such AMP expense may be wholly and exclusively for the benefit of the Indian entity, it IT(TP)A No.14/Chny/2026 Renault India Pvt. Ltd.
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also enures to building the brand of the foreign associated enterprise for which the foreign associated enterprise is obliged to compensate the Indian entity. The burden of the Revenue's song is this an Indian entity, whose AMP expense is extraordinary (or "non-routine") ought to be compensated by the foreign associated enterprise to whose benefit also such expense enures. The "non- routine" AMP spent is taken to have "subsumed" the portion constituting the "compensation" owed to the Indian entity by the foreign associated enterprise. In such a scenario what will be required to be benchmarked is not the AMP expense itself but to what extent the Indian entity must be compensated. That is not within the realm of the provisions of Chapter X.
74. The problem with the Revenue's approach is that it wants every instance of an AMP spent by an Indian entity which happens to use the brand of a foreign associated enterprise to be presumed to involve an international transaction, and this, notwithstanding that this is not one of the deemed international transactions listed under the Explanation to section 92B of the Act. The problem does not stop here. Even if a transaction involving an AMP spend for a foreign associated enterprise is able to be located in some agreement, written (for e.g., the sample agreements produced before the court by the Revenue) or otherwise, how should a Transfer Pricing Officer proceed to benchmark the portion of such AMP spend that the Indian entity should be compensated for?
75. As an analogy, and for no other purpose, in the context of a domestic transaction involving two or more related parties, reference may be made to section 40A(2)(a) under which certain types of expenditure incurred by way of payment to related parties is not deductible where the Assessing Officer "is of the opinion that such expenditure is excessive or unreasonable having regard to the fair market value of the goods". In such event, "so much of the expenditure as is so considered by him to be excessive or unreasonable shall not be allowed as a deduction". The Assessing Officer in such an instance deploys the "best judgment" assessment as a device to disallow what he considers to be an excessive expenditure. There is no corresponding "machinery" provision in Chapter X which enables an Assessing Officer to determine what should be the fair "compensation" an Indian entity would be entitled to if it is found that there is an international transaction in that regard. In practical terms, absent a clear statutory guidance, this may encounter further difficulties. The strength of a brand, which could be product specific, may be impacted by numerous other imponderables not limited to the nature of the industry, the geographical peculiarities, economic trends both international and domestic, the consumption patterns, market behaviour and so on. A IT(TP)A No.14/Chny/2026 Renault India Pvt. Ltd.
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simplistic approach using one of the modes similar to the ones contemplated by section 92C may not only be legally impermissible but will lend itself to arbitrariness. What is then needed is a clear statutory scheme encapsulating the legislative policy and mandate which provides the necessary checks against arbitrariness while at the same time addressing the apprehension of tax avoidance.
76. As explained by the Supreme Court in CIT v. B. C. Srinivasa Setty [1981] 128 ITR 294 (SC) and PNB Finance Ltd. v. CIT [2008] 307 ITR 75 (SC) in the absence of any machinery provision, bringing an imagined international transaction to tax is fraught with the danger of invalidation. In the present case, in the absence of there being an international transaction involving AMP spend with an ascertainable price, neither the substantive nor the machinery provision of Chapter X are applicable to the transfer pricing adjustment exercise.
Economic ownership of the brand
77. The next issue is concerning the economic ownership and legal ownership of the brand. According to the Revenue, viewing legal ownership as something distinct from economic ownership "may not be the right way of looking at things".
78. It is necessary at this juncture to examine the history of the relationship between MSIL and SMC. When the licence agreements were originally entered in 1982, MSIL was known as Maruti Udyog Limited ("MUL") and SMC did not hold a single share in Maruti Udyog Limited. In 2003 SMC acquired the controlling interest in MSIL. There are various models of Suzuki motor cars manufactured by MSIL and each model is covered by a separate licence agreement. Under these agreements SMC grants licence to MSIL to manufacture that particular car model; provides technical know-how and information and right to use Suzuki's patents and technical information. It also gives MSIL the right to use Suzuki's trade mark and logo on the product. Pursuant to the above agreement, MSIL has been using the co-brand, i.e., Maruti-Suzuki trade mark and logo for more than 30 years. As already noted, this co-brand cannot be used by SMC and is not owned by it.
79. The clauses in the agreement between MSIL and SMC indicate that permission was granted by SMC to MSIL to use the co-brand "Maruti Suzuki" name and logo. The mere fact that the cars manufactured by MSIL bear the symbol "S" is not decisive as the advertisements are of the particular model of the car with the logo "Maruti-Suzuki". The Revenue has been unable to contradict the submission of MSIL that the co-brand mark "Maruti-Suzuki" in fact IT(TP)A No.14/Chny/2026 Renault India Pvt. Ltd.
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does not belong to SMC and cannot be used by SMC either in India or anywhere else. The decision in Sony Ericsson requires that the mark or brand should belong to the foreign associated enterprise. The Revenue also does not deny that as far as the brand "Suzuki" is concerned its legal ownership vests with the foreign associated enterprise, i.e., SMC. The Revenue proceeds on the basis that the benefit of the economic ownership also accrues to the foreign associated enterprise by way of increased royalty, increased raw material sales, increased brand value, etc.
80. The Revenue is proceeding on a presumption regarding the comparative benefits to MSIL and SMC as a result of the AMP expenditure incurred by MSIL. The Revenue is unable to deny that MSIL's expenditure on AMP is only 1.87 per cent. of its total sales whereas SMC's expenditure worldwide on AMP is 7.5 per cent. of its sales. In the circumstances, in the absence of some data, it cannot be simply asserted that the benefit of MSIL's AMP spend to SMC is not merely incidental. The court is unable to accept the assertion of the Revenue that the mere fact of incurring AMP expenditure should lead to an inference of the existence of an international transaction.
81. It must be recalled here that the royalty paid to SMC for use of its logo on the product manufactured with its technical know-how is separately subject to transfer pricing. Likewise, payments for use of patents or copyrights are separately assessed. What the present appeals are concerned with is only the AMP expenditure incurred and nothing more. As pointed out by the Revenue the issue is not about the expenditure incurred by MSIL in engaging Indian third parties for AMP but the extent to which the AMP spend can be attributed to enure to the benefit of SMC's brand. This can be a complex exercise and in the absence of clear guidance under the statute and the rules, can result in arbitrariness as a result of proceeding on surmises or conjectures. The Transfer Pricing Officer will need to access data as regards the strength of the foreign associated enterprise's brand and what it commands in the international market and to what extent the presence of the brand in the advertisement actually adds to the benefit of the brand internationally.
82. Para. 6D of the OECD Guidelines deals with "Marketing activities undertaken by enterprises not owning trademarks or trade names". It contains a discussion on promotion of trade marks by distributors of branded goods. It acknowledges the difficulties in determining the extent to which the expenses have contributed to the success of a product. It is stated:
IT(TP)A No.14/Chny/2026 Renault India Pvt. Ltd.
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"For instance, it can be difficult to determine what advertising and marketing expenditures have contributed to the production or revenue, and to what degree. It is also possible that a new trade mark or one newly introduced into a particular market may have no value or little impression on the market (or perhaps loses its impact). A dominant market share may to some extent be attributable to marketing efforts of a distributor. The value and any changes will depend to an extent on how effectively the trade mark is promoted in the particular market. More fundamentally, in many cases higher returns derived from the sale of trademarked products may be due as much to the unique char acteristics of the product or its high quality as to the success of advertising and other promotional expenditures. The actual conduct of the parties over a period of years should be given significant weight in evaluating the return attributable to marketing activities."
83. The Organisation for Economic Co-operation and Development Guidelines set out broad parameters for determining the existence of international transaction and for ascertaining the arm's length price of such transaction. They may not ipso facto become applicable in situations where no studies have been conducted on a scientific basis on the behaviour of market and assessment of brand value.
Incidental benefit to SMC
84. The court next deals with the submission of the Revenue that the benefit to SMC as a result of the MSIL selling its products with the co-brand "Maruti-Suzuki" is not merely incidental. The decision in Sony Ericsson acknowledges that an expenditure cannot be disallowed wholly or partly because its incidentally benefits the third party. This was in context on section 57(1) of the Act. Reference was made to the decision in Sassoon J. David and Co. Pvt. Ltd. v. CIT [1979] 118 ITR 261 (SC). The Supreme Court in the said decision emphasised that the expression "wholly and exclusively used in section 10(2)(xv) of the Act did not mean "necessarily". It said: "The fact that somebody other than the assessee is also benefited by the expenditure should not come in the way of an expenditure being allowed by way of a deduction under section 10(2)(xv) of the Act if it satisfies otherwise the tests laid down by the law".
85. The Organisation for Economic Co-operation and Development Transfer Pricing Guidelines, para 7.13 emphasises that there should not be any automatic inference about an associate enterprise group service only because it gets an incidental benefit for being part of a larger concern and not to any specific activity performed. Even paras 133 and 134 of the Sony Ericsson judgment IT(TP)A No.14/Chny/2026 Renault India Pvt. Ltd.
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makes it clear that AMP adjustment cannot be made in respect of a full-risk manufacturer.
MSIL's higher operating margins
86. In Sony Ericsson it was held that if an Indian entity has satisfied the transactional net margin method, l.e., the operating margins of the Indian enterprise are much higher than the operating margins of the comparable companies, no further separate adjustment for AMP expenditure was warranted. This is also in consonance with rule 108 which mandates only arriving at the net profit by comparing the profit and loss account of the tested party with the comparable. As far as MSIL is concerned, its operating profit margin is 11.19 per cent, which is higher than that of the comparable companies whose profit margin is 4.04 per cent. Therefore, applying the transactional net margin method it must be stated that there is no question of transfer pricing adjustment on account of AMP expenditure".
Accordingly, we are of the opinion that no Arms Length Price adjustment could have been carried out on the advertisement and marketing expenditure incurred by the assessee. Ground No.3 of the assessee stands allowed.
21. Since we have held the transactions between assessee and M/s. RNAIPL as not international transactions, grounds 4 & 5 have become academic and are not necessary to adjudicate.
22. In the result, appeal of the assessee is partly allowed".
10. Having gone through the order of the co-ordinate bench, we are of the considered view that facts in earlier year are similar to the facts in this year also. Accordingly, we are of the opinion that no Arms Length Price adjustment could have been carried out on the advertisement and marketing expenditure incurred by the assessee. Hence, the grounds in question are fully covered by the co-ordinate bench order referred supra. The Id. Counsel for the parties informed the bench that SLP is still pending against the order in the case of Maruti Suzuki (supra). Hence, we allow the appeal of the assessee."
7. We also notice that similar issue has been considered by the Coordinate Bench in the case of Hyundai Motors (supra). We notice that in the case of Maruti Suzuki India Ltd (supra), the Hon'ble High Court held that the existence of an international transaction is a sine qua non for invoking IT(TP)A No.14/Chny/2026 Renault India Pvt. Ltd.
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Chapter X, and the burden lies on the revenue to establish, through tangible material, an agreement, arrangement or understanding with the AE in respect of AMP expenditure. The Hon'ble High Court further holds that mere incurrence of higher AMP expenditure cannot lead to such inference and that transfer pricing provisions contemplate only substitution of the price of an existing transaction with ALP, not a quantitative adjustment based on excess expenditure. The Hon'ble High Court also holds that in the absence of a demonstrable transaction with an ascertainable price, no TP adjustment on AMP can be sustained. In the present case, as submitted by the assessee there is no agreement or arrangement between the assessee and the AE with regard to AMP expenses. Further the only ground for TPO to make the adjustment is a perceived international transaction whereby the AMP expenses incurred by the assessee in India is presumed to be resulting in a benefit to the AE and the ALP of the transaction is computed based on estimate. Therefore we are of the considered view that the ratio laid down in the above judicial precedence is clearly applicable to assessee's case and accordingly respectfully following the same we hold that no adjustment is warranted towards AMP expenses. We direct the TPO to delete the adjustment made in this regard.
8. Ground No.6 & 7 pertain to denial of set off of business loss and unabsorbed depreciation. The Ld. AR submitted that the AO has passed the final assessment order by incorporating the TP adjustment under the head 'Income From Other Sources' instead of "Profits or Gains from Business or Profession" and has further denied the available brought-forward business losses and unabsorbed depreciation to be set off against such business income, resulting in a demand of Rs.85.83 Crores. The Ld. AR in this regard prayed for a direction. Considering our decision on the issue of TP adjustment IT(TP)A No.14/Chny/2026 Renault India Pvt. Ltd.
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towards AMP expenses, we direct the AO to allow the set off of brought forward business / unabsorbed depreciation as claimed by the assessee in accordance with law. Needless to say that the assessee be given a reasonable opportunity of being heard. It is ordered accordingly.
9. In the result, the appeal of the assessee is partly allowed.
Order pronounced on 07th day of May, 2026 at Chennai.
Sd- Sd-
(एबी टी. वक ) (पदमावती यस)
(ABY. T. Varkey) (Padmavathy.S)
याियक सद य / Judicial Member लेखा सद य /Accountant Member
चे नई/Chennai, दनांक/Dated: 07th May, 2026.
EDN, Sr. P.S
आदे श क ितिल प अ े षत/Copy to:
1. अपीलाथ /Appellant
2. थ /Respondent
3. आयकर आयु /CIT, Chennai/Madurai/Coimbatore/Salem
4. िवभागीय ितिनिध/DR
5. गाड फाईल/GF
EJTADA Digitally signed by
EJTADA DURGA
DURGA NARESH
Date: 2026.05.13
NARESH 10:33:25 +05'30'