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Maruti Suzuki - AMP

Supreme Court of India·2019·ITR
Facts

Maruti Suzuki incurred substantial advertising, marketing and promotion (AMP) expenses for its products. TPO held this was an international transaction with parent for brand-building.

Issue

Whether AMP expenses constitute an "international transaction" requiring transfer pricing adjustment?

Held

No bright-line test; AMP cannot be presumed to benefit the foreign AE without specific evidence of an agreement to that effect.

Ratio

TP adjustment requires proven international transaction, not inference from spending patterns.

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