ITAT Bangalore Deletes ₹41.82 Crore AMP Adjustment, Partially Reduces Manufacturing Segment TP Addition — Indo Nissin Foods Private Limited
Overview of the Case
The Income Tax Appellate Tribunal, Bangalore Bench, delivered a significant ruling on 31 August 2026 in the matter of Indo Nissin Foods Private Limited Vs ACIT (IT(TP)A 1806/BANG/2024), covering Assessment Year 2020-21. The dispute arose from a final assessment order dated 26.07.2024 passed under Section 143(3) read with Section 144C(13) and Section 144B of the Income Tax Act, 1961, following directions issued by the Dispute Resolution Panel-1, Bengaluru on 24.06.2024.
The case centred on two principal transfer pricing adjustments — one relating to the assessee's manufacturing segment and another concerning advertising, marketing and sales promotion (AMP) expenditure — collectively amounting to ₹53,34,92,074 as proposed by the Transfer Pricing Officer (TPO) under Section 92CA(3) of the Act.
Background and Company Profile
Indo Nissin Foods Private Limited is a subsidiary of Nissin Foods Asia Pte. Ltd., Singapore. The company operates under a non-exclusive licence granted by Nissin Foods Holding Co. Ltd., Japan, authorising use of trademarks, technical know-how, information and data for manufacturing instant noodles. Royalty is paid to Nissin Japan in consideration of this licence. The assessee manufactures and markets instant noodles under the brand names Top Ramen, Cup Noodles and Scoopies.
For AY 2020-21, the assessee filed its return of income on 30/12/2020 declaring nil income. The return was selected for scrutiny, and statutory notices under Section 143(2) and Section 142(1) were issued. Given the volume and nature of international transactions entered into with associated enterprises (AEs), the matter was referred to the TPO under Section 92CA(1) for arm's length price determination.
Transfer Pricing Adjustments Proposed by the TPO
The TPO, vide order dated 24.07.2023 under Section 92CA(3), proposed the following aggregate transfer pricing adjustment:
| Segment | Adjustment Amount |
|---|---|
| Manufacturing and trading of wholesale food, noodles and semi-instant food products | ₹11,52,47,234 |
| AMP expenditure reimbursable | ₹41,82,44,840 |
| Total adjustment under Section 92CA | ₹53,34,92,074 |
A draft assessment order dated 27.09.2023 was passed under Section 144C(1), incorporating these adjustments. The DRP rejected the assessee's objections, and the final assessment order was issued on 26.07.2024.
Issues Considered by the Tribunal
The Tribunal examined the following principal questions:
- Whether the manufacturing segment TP adjustment could lawfully be computed on total entity-level revenue, or whether it must be restricted to transactions with associated enterprises alone.
- Whether specific comparables selected by the TPO were functionally appropriate for benchmarking the assessee's manufacturing transactions.
- Whether AMP expenditure incurred in India constituted a separate international transaction within the meaning of
Section 92Bof the Income Tax Act, 1961. - Whether the Bright-Line Test carried any statutory sanction for determining alleged excess AMP spend.
- Whether the proposed penalty proceedings warranted any intervention at this stage.