BUCHER HYDRAULICS PRIVATE LIMITED,GURGOAN vs. INCOME TAX OFFICER, ASSESSMENT UNIT, DELHI

ITTPA 16/DEL/2026Status: DisposedITAT Delhi23 September 2026AY 2022-2311 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the action of the Ld. TPO/DRP in disregarding the aggregation of IGS with other inextricably linked international transactions related to the AE's manufacturing business was illegal and set aside. The Tribunal accepted Ground of Appeal No. 4, which challenged the rejection of the TNMM and the aggregation approach. The Tribunal noted that the TPO had provided no reasons for rejecting TNMM, which had been used in earlier years, and had not discussed the applicability of other methods. The Tribunal referred to the Guidelines for using the 'Other method' under Rule 10AB, stating it provides flexibility for complex transactions where third-party comparables may not exist, but recourse to it is available only if other methods are not appropriate. The Tribunal found merit in the assessee's plea that determining the value of management services at 'Nil' by resorting to the CUP method runs contrary to the factual matrix and legal position. Citing the case of Gates India (P) Ltd, the Tribunal concluded that the DRP directions were required to be set aside, and the adjustment made by the TPO on account of IGS were liable to be cancelled and reversed. The value of transactions towards management charges under the TNMM methodology adopted by the assessee was reinstated. The Tribunal also noted that the Hon'ble Supreme Court in Magneti Marelli Powertrain India Pvt. Ltd. concurred with the Delhi High Court on the adoption of aggregated TNMM as the Most Appropriate Method (MAM). Consequently, the appeal filed by the assessee was allowed.

What were the facts?

The assessee, Bucher Hydraulics Private Limited, filed an appeal against the order dated 19.12.2025 passed by the Assessing Officer (AO) under Section 143(3) read with Section 144C(13) and Section 144B of the Income Tax Act, 1961, for Assessment Year 2022-23. The AO's order was based on a Transfer Pricing Officer's (TPO) upward adjustment of Rs. 2,11,05,018/- concerning international transactions of intra-group services (IGS) availed from associated enterprises (AEs). The Dispute Resolution Panel (DRP) upheld the TPO's order. The assessee had initially filed its return of income on 19.12.2022, and later a revised return on 27.07.2023. The case was selected for scrutiny due to various parameters, including international transactions related to business restructuring and large value receipts/repayments outside banking channels.

What were the issues?

1. Whether the Transfer Pricing adjustment of INR 2,11,05,018/- proposed by the AO, TPO, and DRP for intra-group services (management, marketing, and IT services) is illegal, erroneous, and liable for deletion, as argued by the assessee. The assessee contended that the adjustment is untenable and prayed for its deletion. The revenue, through the Ld. CIT(DR), relied on the orders of the TPO and DRP. 2. Whether the final assessment order dated 19.12.2025 is barred by limitation under Section 153(1) read with Section 153(4) of the Act, rendering it void, as argued by the assessee, citing the judgment in Roca Bathroom Products Private Limited. The revenue did not record specific arguments on this ground. 3. Whether the TPO and DRP erred in rejecting the Transactional Net Margin Method (TNMM) as the most appropriate method for benchmarking IGS without cogent reasons, and by disregarding the aggregation of IGS with other international transactions, as argued by the assessee. The assessee also argued that comparable data was available and the operating margin was higher under the aggregated TNMM. The revenue relied on the TPO and DRP orders. 4. Whether the TPO and DRP exceeded their jurisdiction by determining the ALP of IGS at NIL under an 'Other Method' without providing comparable uncontrolled transactions, as argued by the assessee. The revenue relied on the TPO and DRP orders.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144C(13),Section 144B,Section 92CA(1),Section 92CA(3),Section 143(2),Section 142(1),Section 144C(1),Section 144C(5),Section 153(1),Section 153(4),Section 10B(1)(f),Section 10AB

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “I”, NEW DELHI

For Appellant: Shri Pradeep Dinodia, CA, Ms. Pallavi Dinodia, CA, Ms. Monika Bhardwaj, CA
Hearing: 08.07.2026Pronounced: 23.09.2026

PER VIMAL KUMAR, JM:

The appeal filed by the appellant/ Assessee is against order dated 19.12.2025 of ld. AO/ Assessment unit, Delhi (hereinafter referred to as “the P a g e | 2 IT(TP)A No. 16 /Del/2026

AO”) u/s 143(3) r.w.s. 144C(13) r.w.s. 144B of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for A.Y. 2022-23. 2. Brief facts of the case are that the assessee filed return of income of Rs. 13,47,20,099/- on 19.12.2022. The company filed its return of income of Rs. 13,47,20,100/- on 27.07.2023. The case was selected

The order continues below.

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