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2. The only issue raised by the assessee in its appeals for these two years is against the addition on account of transfer pricing adjustment in advertisement, marketing and promotion (AMP) expenses. The Revenue 344/Del/2017 & 1117/Del/2015 in its appeal for the A.Y. 2010-11 is also aggrieved against certain aspects impacting only the AMP adjustment.

3. Briefly stated, the facts of the case are that the assessee is a part of Luxottica group which is a leader in design, manufacture and distribution of sun glasses and prescription frames in mid and premium price categories. The assessee was incorporated in India on 15.11.2007 and commenced its actual operations from February, 2008. The assessee reported four international transactions, namely, Purchase of finished goods and Advertising Material and also reimbursement of expenses to and from AEs for the A.Y. 2010-11; and three international transactions, namely, import of finished goods and reimbursement of expenses to and from AEs for the A.Y. 2011-12. On a reference made by the AO to the Transfer Pricing Officer (TPO) for determining the arm's length price (ALP) of the international transactions, the TPO noticed that the assessee incurred AMP expenses amounting to Rs.19,31,44,379/- for the A.Y. 2011-12. Applying the bright line test, he proposed transfer pricing adjustment amounting to Rs.13,40,31,274/- for the A.Y. 2011- 344/Del/2017 & 1117/Del/2015

12. Transfer pricing adjustment was made in the same way for the A.Y. 2010-11. The Dispute Resolution Panel (DRP) largely approved the action of the Assessing Officer/TPO but subject to certain modifications. The Assessing Officer, in his final orders, made transfer pricing additions on account of AMP expenses amounting to Rs.3,13,20,369 for the A.Y. 2010-11 and Rs.13,40,31,274 for the A.Y.2011-12. The assessee is aggrieved against these additions for both the years. The Revenue in its cross appeal for the A.Y. 2010-11 has agitated certain aspects of determination of ALP of AMP expenses.

7. It is clear from the order passed by the Tribunal in assessee's own case for the immediately preceding assessment year that the matter has been sent back to the A.O./TPO for deciding it afresh in the light of the 344/Del/2017 & 1117/Del/2015 judgment of the Hon'ble Delhi High Court in Sony Ericsson Mobile Communications India Pvt. Ltd.

8. The ld. AR contended that the TPO for the A.Y. 2012-13 in assesse's own case has not made any transfer pricing adjustment on account of AMP expenses but has factored in the AMP intensity adjustment in the profit margin of the comparables and made transfer pricing addition on account of the international transaction of `Import of finished goods'. It was urged that instead of restoring the matter to the A.O./TPO for deciding the existence of an international transaction and determining the ALP of this transaction, if any, the matter should be restored with a direction to carry out AMP intensity adjustment in conformity with the view taken by the TPO for the A.Y. 2012-13. This was objected to by the ld. DR.

12. In the result, all the three appeals are allowed for statistical purposes.

Assessment Year 2012-13

13. All the grounds taken by the assessee in its appeal assail the transfer pricing adjustment of AMP expenses. Ground no. 1 is general. Ground no. 2 is the main ground, with several sub-grounds. Such main 344/Del/2017 & 1117/Del/2015 ground has been captioned as :`Transfer pricing adjustment in respect of AMP expenses'. The sub-grounds are: `No transaction much less than an international transaction'; `No arrangement/ Agreement/ Understanding/ contract with AEs'; `Erroneous approach for determining the ALP of alleged AMP expenses'; etc. etc. Though all the grounds are aimed at challenging the addition of transfer pricing adjustment on AMP transaction treated as an international transaction, we notice that the TPO has not made any separate transfer pricing adjustment for AMP expenses. In fact, the transfer pricing adjustment is only for the international transaction of `Import of finished goods', albeit, factoring in the AMP intensity adjustment in the profit rates of comparables. The ld. AR fairly accepted this position and requested for proceeding with the issue actually arising from the impugned order. The ld. DR did not raise any serious objection to it. We are, therefore, espousing the issue in the appeal de hors the language of separate grounds taken in the memorandum of appeal.