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Relief to Xerox India: ITAT directs AO to delete adjustment made on account of AMP Transactions

ITAT - AO - AMP transactions - Taxscan

The Income Tax Appellate Tribunal (ITAT), Delhi bench in its recent order directed the Assessing Officer (AO) to delete the adjustment made on account of Advertisement, Marketing, and Sales Promotion (AMP) transactions.

The tribunal further directed the AO to delete the disallowance made on account of depreciation on capital assets converted into stock in trade.

The Assessee, M/s Xerox India Pvt. Ltd. operates in the document management industry, providing a range of office equipment, software solutions, and document management services.

The AO made an addition to the total income of Rs. 15,42,32,773/- under Chapter X of the Income Tax Act, 1961 on account of Advertisement, Marketing, and Sales Promotion (AMP) expenses.

The assessee has sought for allowing the credit of the advance fringe benefit tax and TDS.

The Tribunal consists of Judicial Member, Amit Shukla, and Accountant Member, O.P. Kant held that the AO erred in making/upholding a disallowance of Rs 33,34,814/- being depreciation allowance on capital assets converted into stock in trade.

The tribunal in the light of the decision of the Delhi High Court directed the AO to delete adjustments made on account of AMP transactions.

“Allowing the credit of the taxes paid by the assessee is a matter of the verification by the Assessing Officer and therefore, accordingly we direct the Learned AO for verification of the taxes paid and allow the credit in accordance with the law,” the tribunal said.

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