ITAT Delhi Deletes AMP Transfer Pricing Adjustment in Whirlpool Case; Follows Binding Precedent
Court / Authority
Income Tax Tribunal
Update / Judgement Date
29 Aug 2026
Source
WCP News Bulletin
Author
Manas Yadav — WCP Legal Desk
Reading Time
2 min read
View Count
Key Facts and Tribunal Findings
The Income Tax Appellate Tribunal (ITAT), Delhi Bench “I”, has allowed the appeal filed by Whirlpool of India Ltd. for Assessment Year 2017–18, deleting transfer pricing adjustments made on account of advertisement, marketing and promotion (AMP) expenses and granting consequential relief on related issues.
The assessee, a subsidiary of Whirlpool USA engaged in manufacturing and sale of consumer appliances, had benchmarked its international transactions using the Transactional Net Margin Method (TNMM). The Transfer Pricing Officer, however, treated AMP expenses as an international transaction, alleging creation of marketing intangibles for the associated enterprise and made adjustments exceeding ₹57 crore, including protective additions using the Bright Line Test.
The Tribunal noted that the issue stood conclusively covered in favour of the assessee by earlier decisions in its own case, including a ruling of the Delhi High Court holding that AMP expenditure does not constitute an international transaction in the absence of an arrangement with the associated enterprise. This position had also attained finality following dismissal of the Revenue’s appeal by the Supreme Court. In the absence of any change in facts, the Tribunal deleted the entire AMP adjustment as well as the protective addition based on the Bright Line Test.
On the issue of disallowance of employee-related expenditure towards a daughter marriage fund, the Tribunal restored the matter to the Assessing Officer for verification, following earlier years’ directions. Similarly, the claim of foreign tax credit was remanded for verification of supporting documentation.
The Tribunal also admitted an additional ground relating to deduction of warranty-related finance cost (“unwinding of discount”), holding that such claims form part of allowable business expenditure subject to verification, and restored the issue to the Assessing Officer.
Accordingly, the appeal was allowed, with major transfer pricing additions deleted and certain issues remanded for verification.
Full Judgement / Attachment
Full Judgement
Frequently asked questions about Income Tax Tribunal
- What is the Income Tax Appellate Tribunal (ITAT)?
- The ITAT, set up in 1941, is the second appellate authority in direct tax matters and the final fact-finding body. It hears appeals against orders of the Commissioner (Appeals) and certain other authorities, through benches across India.
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- An appeal must be filed within two months from the end of the month in which the order is communicated. This rule has applied since 1 October 2024 and continues under the Income-tax Act, 2025. The Tribunal can condone delay for sufficient cause.
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- Yes. The Tribunal can stay recovery of a disputed demand while an appeal is pending, usually on deposit of a part of the demand or furnishing security. Stays are granted for a limited period, and the appeal is expected to be decided within it.
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- An appeal against an ITAT order lies to the High Court, but only on a substantial question of law. A further appeal lies to the Supreme Court.
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