“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

Emerson Electric Company (India)Pvt. Ltd, Mumbai vs. DCIT 1(2) (1) Jurisdictional Assessing Officer, Mumbai

In the result, this ground of appeal is allowed

ITA 2323/MUM/2022[2018-19]Status: DisposedITAT Mumbai28 May 2025AY 2018-19

Bench: Shri Pawan Singh&Girish Agrawal(Physical Hearing) Emerson Electric Company (India) Dcit, Range-1(2)(1), Mumbai Private Limited, Delphi ‘B’ Wing, Vs Aayakar Bhawan, 601-603, Orchard Avenue, Mumbai Hiranandani Business Park, Powai, Mumbai-400076. [Pan No. Aaace1260B] Appellant / Assessee Respondent / Revenue

Section 143(3)Section 144BSection 144C(13)Section 254(1)

capacity utilisation achieved by the assessee was only 30%. The assessee benchmarked the manufacturing segment by adopting Transactional Net Margin Method as the most appropriate method and after conducting certain economic adjustments as per Rule 10B(1)(e) of the Income Tax Rules, 1962, it was contended that the transaction ... disputed that the capacity utilisation achieved by the assessee was only 30%. The assessee benchmarked the manufacturing segment by adopting TNMM as the most appropriate method. The assessee claimed that they have made certain economic adjustments as per Rule 10B(1)(e) and claimed that the transaction

DCIT, Swargate Pune vs. Elica Pb Whirlpool Kitchen Appliances Private Limited, Pune

In the result, appeal of the Revenue in ITA No

ITA 407/PUN/2025[2014-15]Status: DisposedITAT Pune27 May 2025AY 2014-15

Bench: the Hon'ble Tribunal which may please be granted.” Submission of ld.AR : 2. Ld.AR for the assessee submitted that Quantum Addition has been deleted by ITAT for A.Y.2014-15 in Assessee's own case in

Section 250Section 271GSection 92CSection 92D

order, the TPO has categorically stated that the assessee failed to comply with even a single condition of application of CPM as the most appropriate method, hence the TP Study report and the benchmarking analysis carried out by the assessee has been rejected. It goes to prove ITA Nos.383 & 407/PUN/2025

DCIT, Swargate vs. Elica Pb Whirlpool Kitchen Appliances Private Limited, Pune

In the result, appeal of the Revenue in ITA No

ITA 383/PUN/2025[2014-15]Status: DisposedITAT Pune27 May 2025AY 2014-15

Bench: SHRI VINAY BHAMORE (Judicial Member)

Section 250Section 271GSection 92CSection 92D

Dlf Home Developers Limited, New Delhi vs. Principal Commissioner of Income Tax, Delhi-1, New Delhi

In the result, the appeal of the assessee is allowed

ITA 2585/DEL/2024[2019-20]Status: DisposedITAT Delhi23 May 2025AY 2019-20

Bench: Shri Mahavir Singh & Shri Manish Agarwal[Assessment Year : 2019-20] Dlf Home Developers Limited, Vs Pr.Cit, 9Th Floor, Dlf Centre, Sansad Delhi-1, Marg, New Delhi-110001. New Delhi Pan-Aaccd0037H Appellant Respondent Appellant By Shri R.S.Singhvi, Ca & Shri Satyajeet Goel, Ca Respondent By Shri Surender Pal, Cit Dr Date Of Hearing 19.03.2025 Date Of Pronouncement 23.05.2025

Section 143(3)Section 263

further submitted that once the AO has applied his mind and reaches to the conclusion that POCM is most appropriate method for Revenue recognition and also computed the amount of addition therefore, there is no error in the order of the AO for which the proceedings could be initiated

Milacron India Private Limited, Ahmedabad vs. The Dy. CIT, Circle-2(1)(1), Ahmedabad

The appeal of the assessee is allowed

ITA 2201/AHD/2024[2021-22]Status: DisposedITAT Ahmedabad21 May 2025AY 2021-22

Bench: S/Shri T.R. Senthil Kumar & Makarand V.Mahadeokarasstt.Year : 2021-22 Milacron India Pvt.Ltd. The Dcit, Cir.2(1)(1) Plot No.93/2 & 91/4 Vs Ahmedabad. Phase-1,Gidc Vatva, Ahmedabad. Pan : Aabcc 0881 D

For Appellant: Shri Prathvi Raj Meena, CIT-DR

Section 143(3)Section 144C(1)Section 144C(5)Section 270ASection 92BSection 92C

must be benchmarked independently, and that aggregation is not permissible, the AR submitted that while the receivables may constitute a separate international transaction, the appropriate method of evaluating the arm’s length nature is through a holistic adjustment that reflects the commercial substance of the tested party’s operating cycle ... proposition that no separate adjustment on account of interest for delayed receivables is warranted when the TNMM has been adopted as the most appropriate method, the assessee’s profit margins fall within the arm’s length range, and a working capital adjustment has been granted to account for differences

Jungheinrich Lift Truck India Private Limited, Mumbai vs. Assessment Unit, National E Assessment Centre- Delhi, Delhi

In the result, the appeal is accordingly allowed for statistical purposes

ITA 4260/MUM/2024[2020-2021]Status: DisposedITAT Mumbai21 May 2025AY 2020-2021

Bench: Ms. Padmavathy S & Shri Raj Kumar Chauhanvs. Assessment Jungheinrich Lift Truck Unit/Nfac/Dcit India Private Limited Circle 15(1)(2), 4Th Floor, Delphi A Wing, Mumbai Central Avenue, Aayakar Bhavan, Hiranandani, Business Mumbai. Park, Powai, Mumbai, Maharashtra-400 076 Pan/Gir No. Aaccj7808G (Applicant) (Respondent) Assessee By Shri Ajit Jain / Shri Siddesh Chaugule / Shri Rishab Parekh, Ld. Ars Revenue By Shri Kiran Unavekar, Sr. Dr Date Of Hearing 05.03.2025 Date Of Pronouncement 21.05.2025 आदेश / Order Per Raj Kumar Chauhan, Jm: This Appeal Is Directed Against The Assessment Order Dated 26.06.2024 Passed By Assessment Unit (Hereinafter Referred As Ld. Ao) For Ay 2020-21 In Pursuance To The Direction Of Ld. Drp-1, Mumbai Dated 14.06.2024

Section 143(3)Section 144C(13)Section 43A

transactions were considered by the assessee company to be in compliance with the arm’s length principle on application of ‘other method’ as most appropriate method. It was further submitted that such reimbursement of expenses are included in the total expenses and accordingly, the assessee has applied transactional net margin ... were considered by the assessee company to be in compliance with the arm's-length principle on application of other method as the most appropriate method. 6. The learned transfer pricing officer disputed the above transaction asking the assessee to furnish back to back invoices of the expenses incurred

Excelra Knowledge Solutions Private Limited, Hyderabad vs. DCIT., Circle-8(1), Hyderabad

In the result, appeal of the assessee is allowed for statistical purposes

ITA 1319/HYD/2024[2021-22]Status: DisposedITAT Hyderabad20 May 2025AY 2021-22

Bench: Shri Vijay Pal Rao & Shri Manjunatha G

For Appellant: Shri Abhishek BoobFor Respondent: MS. M. Narmada, CIT-DR

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

transactions involving payment of business development expenses to it’s AEs’ and has selected Transactional Net Margin Method [in short "TNMM"] as the Most Appropriate Method [in short "MAM"] and claimed that, transactions with it’s AEs’ are at Arms Length Price [in short “ALP”]. 2.1. The appellant company ... that, assessee has maintained relevant documents/information in respect of it’s TP documentation report and also based business profile, selected TNMM as the most appropriate method. Learned Assessing Officer without recording any reason as to why the TP documentation submitted by the appellant company cannot be accepted, simply rejected

Aquity Solutions India Private Limited, Mumbai vs. Deputy Commissioner of Income Tax, Circle 15(1)(1), Mumbai

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

ITA 4817/MUM/2024[2020-21]Status: DisposedITAT Mumbai20 May 2025AY 2020-21

Bench: Shri Sandeep Singh Karhailshri Girish Agrawal

For Appellant: Shri Harsh ShahFor Respondent: Shri Ajay Ojha, Sr.DR

Section 143(3)Section 144C(13)Section 144C(5)Section 234ASection 234B

specifications and instructions provided by the US AE. For benchmarking this transaction, the assessee adopted Comparable Uncontrolled Price (“CUP") method as the most appropriate method by considering itself as the tested party. For the determination of arm's length price (“ALP”), the assessee analysed the service level agreement ... assessee also undertook a corroborated benchmarking of this transaction by adopting the Transactional Net Margin Method (“TNMM”) as the most appropriate method with the Profit Level Indicator (“PLI") of Operating Profit to Total Operating Expenses. By considering itself as the tested party, the assessee identified 11 comparable companies with

Vertex Offshore Services Private Limited, Hyderabad vs. Dict, Circle-8(1), Hyderabad

In the result, appeal of the assessee is partly allowed for statistical purposes

ITA 204/HYD/2021[ 2016-17]Status: DisposedITAT Hyderabad16 May 2025

Bench: Shri Vijay Pal Rao & Shri Manjunatha G

For Appellant: Shri Nageswar Rao, AdvocateFor Respondent: MS. M. Narmada, CIT-DR

Section 143(3)Section 144C(1)Section 144C(5)Section 92CSection 92C(3)

services of Rs.24,10,97,420/-. The appellant has conducted TP study and selected Transactional Net Margin Method [in short “TNMM”] as the most appropriate method. The 3 ITA.No.204/Hyd./2021 appellant has selected 16 comparables with margin of 11.09% to 22.26% and claimed that margin earned by the appellant

M/S Essar Shipping Ltd, Mumbai vs. Deputy Commissioner of Income Tax, Circle 5(1)(1), Mumbai

In the result, ground no. 5 raised by the assessee is dismissed

ITA 4440/MUM/2024[2020-21]Status: DisposedITAT Mumbai16 May 2025AY 2020-21

Bench: Ms. Kavitha Rajagopal, Jm & Shri Omkareshwar Chidara, Am

For Respondent: Shri. Piyush Chaturvedi

Section 143(2)Section 144Section 144C(1)Section 41Section 92B(2)Section 92C

case of Varada, the ld. AO/TPO benchmarked the said transaction by using Comparable Uncontrolled Price (CUP method) as the most appropriate method (MAM) and rejected the Nil adjustment made by the assessee. The ld. AO determined 0.75% as guarantee commission. The assessee's objection was dismissed ... treated as an international transaction for which Arm's Length Price of corporate guarantee has to be determined by adopting the most appropriate method (MAM) from the prescribed methods as per Section 92C of the Act. The ld. AR though has relied on the decision of the Hon'ble Jurisdictional

Delicatessen Engineering Services Private Limited, Hyderabad vs. DCIT., Circle- 8(1), Hyderabad

In the result, appeal filed by the assessee is partly allowed

ITA 835/HYD/2024[2020-21]Status: DisposedITAT Hyderabad15 May 2025AY 2020-21

Bench: Shri Vijay Pal Rao, Vice- & Shri Manjunatha, G.आ.अपी.सं /Ita No.835/Hyd/2024 (िनधा"रण वष"/Assessment Year: 2020-21) Delicatessen Vs. Dy. Cit. Engineering Services Circle- 8(1), Private Hyderabad Limited,Hyderabad Pan:Aagcd8678N (Appellant) (Respondent) िनधा""रती "ारा/Assessee By: Shri H. Srinivasulu, Advocate राज" व "ारा/Revenue By:: Shri B Bala Krishna, Cit(Dr) सुनवाई की तारीख/Date Of Hearing: 26/02/2025 घोषणा की तारीख/Pronouncement: 16/05/2025 आदेश/Order Per Manjunatha, G. A.M This Appeal Filed By The Assessee Is Directed Against The Final Assessment Order Passed By The Assessing Officer U/S 143(3) R.W.S. 144C(13) R.W.S. 144B Of The I.T. Act, 1961 Dated,18/07/2024, In Pursuant To The Directions Issued By The Drp-1 Bengaluru, Dated 26/02/2024 U/S 144C(5) Of The I.T. Act, 1961 & Relating To A.Y.2020-21. Page 1 Of 32

For Appellant: Shri H. Srinivasulu, AdvocateFor Respondent: : Shri B Bala Krishna, CIT(DR)

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

international transaction in EDS segment provided to its AEs has been determined by applying the TNNM method as the most appropriate method in the facts and circumstances of the case. The operating cost to the operating profit has been taken to be the profit level indicator (PLI) in TNNM analysis

Deputy Commissioner of Income Tax, Circle-5(1), Kolkata vs. Dhunseri Ventures Limited, Kolkata

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

ITA 968/KOL/2024[2016-17]Status: DisposedITAT Kolkata15 May 2025AY 2016-17

Bench: Shri Pradip Kumar Choubey&Shri Sanjay Awasthi]

Section 115JSection 80ISection 92C

erred in not appreciating that TPO has applied 3 I.T.A. No. 968/Kol/2024 Assessment Year: 2016-17 Dhunseri Ventures Ltd. external CUP as most appropriate method (MAM) which is one of methods or determining ALP and further not discussed in the body of the order as to why the same ... case , the Ld. CIT(A) has assumed an external CUP as an internal CUP and also considered the same to be most appropriate method the price at which a distributor has sold to a third party considered as price at which the assessee has been sold the same

Natems Solar Power Private Limited, Hyderabad vs. Income Tax Officer, Ward 16(1), Hyderabad

ITA 140/HYD/2024[2020-21]Status: DisposedITAT Hyderabad14 May 2025AY 2020-21

Bench: Us:

Section 115JSection 143(3)Section 144BSection 234Section 234A

credit paid/payable by the assessee company to its AE using CUP method as against “Other method” adopted by the assessee company as Most Appropriate Method (“MAM”); therefore, we will confine our adjudication to the said two issues, as under : (A). Interest on Compulsorily Convertible Debentures 12.1 On a perusal ... Natems Solar Power Private Limited coupon rate of 8.5% amounting to Rs.29,18,333/-. The assessee company had adopted “other method” as “Most Appropriate Method” (MAM) for benchmarking the aforesaid transaction of payment of interest on CCD’s. It had based on a search on the NSDL website, wherein

Jade Global Software Private Limited, Pune vs. Assessment Unit, National Faceless Assessment Centre, Pune

In the result, the Appeal of the Assessee is allowed for statistical purpose

ITA 1768/PUN/2024[2020-21]Status: DisposedITAT Pune13 May 2025AY 2020-21

Bench: Shri R.K.Panda & Shri Vinay Bhamore

For Appellant: • considering foreign exchange gain and other income as non-operating income

Section 143(3)Section 144B

Bock Compressors India Private, Bengaluru vs. The Dy. CIT, Circle - 1(1)(1), Vadodara

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

ITA 1484/AHD/2024[2020-21]Status: DisposedITAT Ahmedabad09 May 2025AY 2020-21

Bench: Ms. Suchitra Kamble & Shri Makarand V. Mahadeokarassessment Year 2020-21

For Appellant: Shri Ketan Ves, A.R. &For Respondent: Shri Uday Kakne, Sr. D.R

Section 143(3)Section 144(5)Section 144CSection 234BSection 253Section 270ASection 920Section 92ASection 92C

does not make the transacting party as associated enterprise within the ambit of section 92A and accordingly erred in rejecting RPM as the most appropriate method considering that transaction of purchase and sale both from and related parties cannot be an acceptable transaction within the framework ... general in nature and in fact for the transactions related to purchase as well as sales the RPM method is the most appropriate method as demonstrated by the assessee as the assessee has demonstrated before the Assessing Officer that the sale of goods are at arms length price and since

Toyota Boshoku Automotive India Private Limited, Bidadi vs. Assessment Unit, Income Tax Department Or the DCIT, Circle - 7(1)(1), Koramangala

In the result, the appeal of the assessee is partly allowed for statistical purposes

ITA 1539/BANG/2024[AY 2020-21]Status: DisposedITAT Bangalore09 May 2025

Bench: Shri Waseem Ahmed & Shri Keshav Dubey

For Appellant: Shri K.R Vasudevan, AdvocateFor Respondent: Ms. Neera Malhotra, CIT (DR)

Section 234ASection 270A

which effectively amounted to 2.28% of net sales. The assessee benchmarked this transaction using the TNMM as the most appropriate method by aggregating all transactions. 14.1 However, the TPO separately benchmarked the royalty payment using the Profit Split Method (PSM) as the most appropriate method and made the necessary adjustment ... Tribunal, vide its order dated 13-04-2022, decided the issue in favor of the assessee by holding that TNMM was the most appropriate method. Accordingly, it directed the TPO to benchmark the royalty transaction as per TNMM. The relevant observations of the Tribunal are as follows: 11.2. We have

Quinnox Consultancy Services Limited, Mumbai vs. DCIT, 3(1)(1), Mumbai

In the result, appeal of the assessee is allowed

ITA 4299/MUM/2024[2020-21]Status: DisposedITAT Mumbai09 May 2025AY 2020-21

Bench: SHRI AMIT SHUKLA (Judicial Member), MS. PADMAVATHY S (Accountant Member)

Section 143(3)

Assessee had benchmarked the AE segment for provision of software services to aforesaid mentioned AE’s by selecting Transactional Net Margin Method as most appropriate method by adopting internal comparable instances i.e., internal TNMM. Profit Level Indicator (PLI) was adopted by using Operating Profit/Operating Cost. The PLI of AE segment ... relating to rejection of internal TNMM concerned, it has been submitted on behalf of the assessee that Internal TNMM as the most appropriate method and the same was adopted for the following reasons: -. “Functional similarity – Quinnox Indla provides software development services to both AE and Non-AE i.e., similar service

Molvizadah Sons India Private Limited, Delhi vs. DCIT Circle-16(1), Delhi

ITA 5297/DEL/2024[2021-22]Status: HeardITAT Delhi09 May 2025AY 2021-22

Bench: Shri Prakash Chand Yadav & Shri Brajesh Kumar Singh

Section 144C(10)Section 92C

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, ‘H’: NEW DELHI BEFORE SHRI PRAKASH CHAND YADAV, JUDICIAL MEMBER AND SHRI

S.N. Exports, New Delhi vs. ITO Ward-4, Panipat

In the result, all the appeals of Revenue are dismissed

ITA 2359/DEL/2019[2014-15]Status: DisposedITAT Delhi09 May 2025AY 2014-15

Bench: Shri M. Balaganesh & Shri Yogesh Kumar U.S.

For Appellant: NoneFor Respondent: Shri Sahil Kumar Bansal, Sr. DR

Section 143(3)Section 271GSection 92BSection 92DSection 92D(1)

respect international transactions without appreciating that there is no exception to the requirement of maintain documents and carrying out analysis by the most appropriate method to show that the international transactions entered into are at arm’s length and that several methods have been prescribed for this purpose. (iv) whether ... sold for different price and due to peculiar character of the goods sold, the appellant did not consider the CUP method as the most appropriate method. It is also mentioned that the department accepted TNMM Method as the most appropriate method and no adjustment. were made in the preceding years

S.N. Exports, New Delhi vs. ITO Ward-4, Panipat

In the result, all the appeals of Revenue are dismissed

ITA 2358/DEL/2019[2014-15]Status: DisposedITAT Delhi09 May 2025AY 2014-15

Bench: Shri M. Balaganesh & Shri Yogesh Kumar U.S.

For Appellant: NoneFor Respondent: Shri Sahil Kumar Bansal, Sr. DR

Section 143(3)Section 271GSection 92BSection 92DSection 92D(1)