“most appropriate method”

Transfer PricingSection 92CSection 92C1,345 judgments

The decision most relied on for most appropriate method is CIT v. Cushman & Wakefield (India) (P.) Ltd. (367 ITR 730), cited in 120 judgments on BharatTax.

Leading authorities on most appropriate method

CIT v. Cushman & Wakefield (India) (P.) Ltd.

367 ITR 730 · 2014 · High Court

120

citing judgments

This case determines the Arm's Length Price (ALP) for intra-group services and reimbursements, clarifying when charges constitute services warranting a mark-up versus mere pass-through costs. It provides guidance on the circumstances under which an ALP adjustment, including an ALP of 'nil', is appropriate for such transactions.

Dresser-Rand India (P.) Ltd. v. Addl. CIT

13 Taxmann.com 82 · 2011 · High Court

citing judgments

An Assessing Officer cannot disregard an assessee's decision to avail services from associated enterprises, even if the assessee has internal expertise, as the determination of necessity is the assessee's prerogative. The Transfer Pricing Officer's role is to determine the arm's length price, not the need for the service itself.

CIT v. EHPT India P Ltd.

350 ITR 41 · 2013 · High Court

citing judgments

The headcount method is an appropriate allocation key for indirect expenses between eligible and non-eligible units when it has been consistently accepted by revenue authorities and there is no just cause for abandoning it. Deviation from a consistently followed and accepted method can disturb or distort profits.

Mobis India Ltd. v. Dy. CIT

38 Taxmann.com 231 · 2013 · ITAT

citing judgments

A working capital adjustment is unreliable if it is based on broad approximations, estimations, and assumptions, and the assessee fails to demonstrate how the adjustment was arrived at.

LG Electronics India Pvt. Ltd. v. ACIT

29 Taxmann.com 300 · 2013 · High Court

citing judgments

The 'bright line test' is not an appropriate method for determining the existence of an international transaction for calculating arm's length price. This ruling overrules prior special bench decisions on AMP expenses.

Magneti Marelli Powertrain India Pvt. Ltd. v. DCIT

389 ITR 469 · 2016 · High Court

citing judgments

The Assessing Officer (AO) or Transfer Pricing Officer (TPO) cannot dispute the application of the TNMM method if they have already accepted it as the most appropriate method for certain international transactions, especially when other transactions are intrinsically linked.

Skoda Auto India (P) Ltd. v. ACIT, Aurangabad

30 SOT 319 · 2009 · ITAT

citing judgments

The Tribunal may allow adjustments for differences between the tested party and comparable companies to eliminate material differences, provided accurate and credible evidence is furnished.

Principal Commissioner of Income-tax-6 v. Matrix Cellular International Services (P.) Ltd.

90 Taxmann.com 54 · 2018 · High Court

citing judgments

The Resale Price Method (RPM) is the most appropriate method for determining the arm's length price of a distributor who does not add significant value to the goods purchased.

Judgments citing most appropriate method

Schindler India Private Limited, Mumbai vs. Income-Tax Officer, Mumbai

In the result, the appeal filed by the assessee is disposed off in light of aforesaid directions

ITA 4819/MUM/2024[AY 2020-21]Status: DisposedITAT Mumbai06 Jun 2025

Bench: Shri Vikram Singh Yadav & Shri Sandeep Singh Karhailassessment Year : 2020-21 Schindler India Private Limited, The Asst. Commissioner Of Schindler House, Income Tax, Main Street, Vs. Circle-15(3)(2) Hiranandani Gardens, Aayakar Bhavan, Powai, Maharshi Karve Road, Mumbai -400076 New Marine Lines, [Pan: Aaecs1548J] Churchgate, Mumbai-400020 (Appellant) (Respondent)

For Appellant: Ms. Chandani Shah a/wFor Respondent: Shri Ajay Chandra, CIT-DR

Section 143(3)Section 144CSection 144C(8)Section 270ASection 274Section 37(1)Section 92C

determination of arm's length price as prescribed under section 92C of the Act, read with rule 10C of the rules being the most appropriate method. 1.6. On the facts and in the circumstances of the case and in law, the learned AO/ TPO erred ... erred and the Hon'ble DRP further erred in rejecting benchmarking approach adopted by Assessee using Comparable Uncontrolled Price method (CUP) as the Most appropriate method selected by the Assessee based on the contemporaneous data in the transfer pricing study report maintained as per section 92D of the Act read

Pos-Hyundai Steel Manufacturing India Private Limited, Kanchipuram vs. Deputy Commissioner of Income Taxof Income Tax Circle 1 Ltu, Chennai

In the result the appeal of the Assessee is allowed

ITA 2485/CHNY/2024[2020-21]Status: DisposedITAT Chennai04 Jun 2025AY 2020-21

Bench: Shri George George K & Shri S.R. Raghunathaआयकर अपील सं./Ita No.:2485/Chny/2024 िनधा"रण वष" / Assessment Year: 2020-21 Pos – Hyundai Steel Manufacturing Deputy Commissioner Of Income India Private Limited, Vs. Tax, F-70, Sipcot Industrial Park, Circle -1, Ltu, Irungattukottai S.O., Chennai. Kanchipuram – 602 117. [Pan:Aaacp-6484-G] (अपीलाथ"/Appellant) (""थ"/Respondent)

For Appellant: Shri. B. Srinath, C.AFor Respondent: Shri. A. Sasikumar, C.I.T

Section 143(3)Section 144C(5)

suppliers of auto parts. The assessee to benchmark the international transaction of purchase of steel coils from AE has adopted TNMM as the Most Appropriate Method by considering the AE segment margin of 5.01% and compared it with External comparable, including POS India’s Non-AE segment. The margin ... submitted that in AE and Non-AE segment same process is followed and they have adopted Internal TNMM as most appropriate method. Further, the AR submitted due to voluminous nature of data sought by the TPO, the assessee has furnished only sample data and submitted that it is practically

Lions Gate India LLP, Mumbai vs. Assessment Unit, National Faceless Assessment Centre, Income Tax Department, Delhi, Mumbai

In the result, appeal of the assessee is dismissed as withdrawn

ITA 4970/MUM/2024[AY 2020-21]Status: DisposedITAT Mumbai04 Jun 2025

Bench: Smt. Beena Pillai & Shri Girish Agrawalassessment Year: 2020-21

For Appellant: Ms. Bhumika Majethiya, AR (virtually)For Respondent: Shri Bhagirath Ramawat, Sr. DR

Section 144C(5)Section 153Section 92CSection 92C(3)

international transaction at 50% of the amount paid on an ad-hoc basis by applying the Other Method as the most appropriate method without providing any comparable uncontrolled data for arriving at the ALP as 50% of the amount paid, which is not in accordance with the transfer pricing regulations ... amount paid on an ad-hoc basis applying the Other Method as the most 4 Lions Gate India LLP AY 2020-21 appropriate method without providing any comparable uncontrolled data for arriving at the ALP as 50% of the amount paid, which is not in accordance with the transfer pricing

Griptonite Games India Private Limited, Hyderabad vs. Deputy Commissioner of Income Tax, Circle-2(1), Hyderabad

ITA 199/HYD/2022[2017-18]Status: DisposedITAT Hyderabad02 Jun 2025AY 2017-18

Bench: SHRI RAVISH SOOD, HON’BLE (Judicial Member), SHRI MADHUSUDAN SAWDIA, HON'BLE (Accountant Member)

For Appellant: Shri S.P.Chidambaram, ARFor Respondent: Shri B. Bala Krishna, CIT-

Section 143(3)Section 144(5)Section 92C

infirmity on the part of the TPO/DRP in benchmarking the same based on the other public Masala Bond rates as the most appropriate method under CUP. It was submitted by him that the domestic rates like SBI- PLR could not be adopted as a comparable for benchmarking the ECB transaction ... interest rate paid 16 Griptonite Games India Pvt Ltd vs. DCIT on Masala Bonds rates gathered from the public database, as the Most Appropriate Method under CUP. 30. Having given thoughtful consideration, we are of the view that in the case of Masala Bonds the foreign entities are allowed

Atmecs Technologies Private Limited, Hyderabad vs. Income Tax Officer, Ward-1(1)(1), Bangalore

In the result, the appeal of assessee is partly allowed

ITA 1681/BANG/2024[2020-2021]Status: DisposedITAT Bangalore02 Jun 2025AY 2020-2021

Bench: Shri Prashant Maharishi & Shri Prakash Chand Yadav

For Appellant: Shri P.V.S.S. Prasad, CAFor Respondent: Dr. K.J. Dhivya

Section 143(3)Section 144C(13)Section 92C

recomputed by the ld. TPO at 14.53%. For benchmarking of the international transactions, assessee adopted Transactional Net Margin Method [TNMM] as the most appropriate method [MAM] selecting the assessee as tested party adopting Profit Level Indicator [PLI] of OP/OC, selecting One comparable company where the margin of the comparable

M/S. Essar Shipping Ltd, Mumbai vs. DCIT, Circle 5(1)(1), Mumbai

In the result, the appeal of the assessee is In the result, the appeal of the assessee is dismissed

ITA 6521/MUM/2024[2021-22]Status: DisposedITAT Mumbai30 May 2025AY 2021-22

Bench: Shri Om Prakash Kant () & Shri Rahul Chaudhary () Assessment Year: 2021-22 M/S Essar Shipping Ltd., Dy. Cit, Circle 5(1)(1), 5Th Floor, Essar House, 11, Keshav Mumbai/Assessment Unit, Vs. Rao Khadye Marg, Mahalaxmi National Faceless Assessment Mumbai-400034. Centre, Room No. 568, Aayakar Bhavan, M.K. Road, Mumbai-400020. Pan No. Aacce 3707 D Appellant Respondent

For Appellant: Mr. Suresh Gaikwad, Sr. DRFor Respondent: Mr. Piyush Chaturvedi

Section 115B

namely ‘OGDSHIL’ and NIL ‘OGDSHIL’ and NIL in respect of another AE namely another AE namely ‘Varada’, applying ‘other method other method’ as ‘most appropriate method’ appropriate method’ for benchmarking. The learned TPO rejected The learned TPO rejected the benchmarking carried out by the assessee as same

Troy Chemical India Private Limited, Mumbai vs. CIT (A), NFAC, Mumbai

In the result, the appeal by the assessee is allowed

ITA 5933/MUM/2024[2021-22]Status: DisposedITAT Mumbai30 May 2025AY 2021-22

Bench: Shri Sandeep Singh Karhailshri Bijayananda Pruseth

For Appellant: Shri Tejveer SinghFor Respondent: Shri Pravin Salunkhe, Sr.DR

Section 143(3)Section 144BSection 144C(13)Section 144C(5)Section 9

benchmarking the international transaction of purchase of finished goods and purchase return, the assessee adopted the Resale Price Method (“RPM") as the most appropriate method. By considering itself as a tested party, the assessee identified 22 comparable companies with 35th to 65th percentile range of gross margin, i.e., GP/sales between ... chemicals, and therefore, are comparable to the assessee for benchmarking the international transaction entered into by the assessee by adopting RPM as the most appropriate method. During the hearing, by referring to internal page 40 of the Transfer Pricing Study Report, the learned AR submitted that under the RPM, comparability

Ucweb Mobile Private Limited, Gurgaon vs. Assessment Unit, Inocome Tax Department, Gurgaon

In the result, the appeal of the assessee is partly allowed

ITA 3945/DEL/2024[2020-21]Status: DisposedITAT Delhi30 May 2025AY 2020-21

Bench: SHRI MAHAVIR SINGH (Vice President), SHRI MANISH AGARWAL (Accountant Member)

Section 143(2)Section 143(3)Section 144CSection 144C(1)Section 144C(13)Section 144C(5)Section 253(1)(d)Section 43(3)

labelling same as intensity adjustment to one of line items of expenditure in course of application of Transaction Net Margin Method ("TNNM") as Most Appropriate Method. 4. Interest paid on Compulsorily Convertible Debentures ('CCDs') 4.1. Ld. DRP/ TPO/ AO have wrongly re-characterized CCDs as equity, making an upward transfer ... adjustment and further challenged the action of the AO/TPO in making intensity adjustment in the course of application of TNMM as most appropriate method. 12. Before us, Ld.AR for the assessee submitted that the assessee is engaged in the business of distributing UC principal’s designated services in India which

DCIT Circle 5(1)(1), Mumbai vs. Arjav Diamonds (India) Pvt. Ltd, Mumbai

In the result, the appeal filed by the revenue is hereby dismissed

ITA 5610/MUM/2024[2013-14]Status: DisposedITAT Mumbai29 May 2025AY 2013-14

Bench: Shri Om Prakash Kant, Am & Ms. Kavitha Rajagopal, Jm Deputy Commissioner Of Income Tax Arjav Diamonds (India) Pvt. Ltd. - 5(1)(1) Cc, 9010A Bharat Diamond Bourse, Deputy Commissioner Of Income-Tax, Bandra Kurla Complex, Bandra East, Vs. Circle 5(1)(1), R.No.568, Aaykar Mumbai-400051. Bhavan, M.K. Road, Mumbai - 400020. Pan/Gir No. Aagca2472D (Appellant) : (Respondent) Assessee By : Shri. Fenil Bhat Respondent By : Dr. K. R. Subhash, (Cit-Dr) Date Of Hearing : 10.03.2025 Date Of Pronouncement : 29.05.2025 O R D E R Per Kavitha Rajagopal, J M: This Appeal Has Been Filed By The Revenue, Challenging The Order Of The Learned Commissioner Of Income Tax (Appeals), Mumbai (‘Ld.Cit(A)’ For Short), Passed U/S.250 Of The Income Tax Act, 1961 (‘The Act'), Pertaining To The Assessment Year (‘A.Y.’ For Short) 2013-14. 2. The Assessee Has Raised The Following Grounds Of Appeal: “(I) "Whether, On The Facts & Circumstances Of The Case & As Per Law, The Ld. Cit (A) Is Justified In Deleting The Penalty Of Rs. 16,13,66,235/-Levied U/S 271G Of The It Act, 1961 When The Statutory Requirement Of Rule 10B(1)(E), Stating The Methodology For Benchmarking Transactions Using Tnmm, States That The Net Profit Margin From The Controlled International Transaction & The Uncontrolled International Transactions Should Be Separately Provided By The Assessee & Their Statutory Requirement Has Not Been Fulfilled By The Assessee?" Arjav Diamonds (India) Pvt. Ltd.

For Appellant: Shri. Fenil BhatFor Respondent: DR. K. R. Subhash, (CIT-DR)

Section 250Section 271GSection 92C

documentary evidence. The Ld. TPO/AO rejected the assessee’s contention and held that neither TNMM nor CUP method to be applied as a Most Appropriate Method (MAM) and also in the failure of details of profits earned by the AE, which is also not made available, the TPO rejected ... case of manufacturing rough and polished diamonds and further stated that CUP method is not the most appropriate method in such cases where the sale invoice of AE’s and non-AE’s contains various types of goods which are sold at different prices depending upon the quality

Beauty Etoile Private Limited, Mumbai vs. Assessment Unit, Income Tax Department, Delhi

In the result, appeal of the assessee is allowed

ITA 4073/MUM/2024[2020-21]Status: DisposedITAT Mumbai29 May 2025AY 2020-21

Bench: Shri Pawan Singh & Shri Girish Agrawalassessment Year: 2020-21

For Appellant: Shri. Dharan Gandhi, AdvocateFor Respondent: Shri. Kiran Unavekar, Sr. DR

Section 143(3)Section 144Section 144CSection 144C(15)(b)Section 144C(5)Section 234Section 234ASection 270ASection 948

assessee to its AE on its borrowings should not be computed as per Section 94B of the Act, using the “other method” as most appropriate method (MAM). After taking into account submissions made by the assessee and deliberating on the concept of thin capitalization, ld. TPO in para ... interest paid by it to its AE on borrowings should not be computed as per section 94B using the other method as most appropriate method. We also take note of the conclusion drawn by ld. TPO in para 5.7, whereby he has categorically stated that restriction imposed by section