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“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
43
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
41
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
38
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
37
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
35
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
26
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
25
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

Coastal Energy Private Limited, Chennai vs. ACIT, Chennai

In the result, the appeal filed by the assessee is allowed for statistical purposes

ITA 2305/CHNY/2012[2008-09]Status: DisposedITAT Chennai06 Feb 2026AY 2008-09

Bench: Shri S.S. Viswanethra Ravi & Shri Jagadishआयकर अपील सं./I.T.A. No.2305/Chny/2012 िनधा"रण वष"/Assessment Year: 2008-09 Coastal Energy Private Limited, Vs. The Assistant Commissioner Of 5, Buhari Buildings, Moores Road, Income Tax, Thousand Lights, Chennai 600 006. Company Circle I(3), Chennai. [Pan: Aaacc4160A] (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ" की ओर से / Appellant By : Shri B. Ramakrishnan, Fca ""थ" की ओर से/Respondent By : Shri A. Sasi Kumar, Cit सुनवाई की तारीख/ Date Of Hearing : 10.11.2025 घोषणा की तारीख /Date Of Pronouncement : 06.02.2026 आदेश /O R D E R

For Appellant: Shri B. Ramakrishnan, FCAFor Respondent: Shri A. Sasi Kumar, CIT
Section 143(3)

section 92C(2) of the Act is applicable only where multiple comparable prices are determined, and the arithmetic mean is computed using the most appropriate method. Accordingly, pursuant to the DRP's directions, the Assessing Officer, in the final assessment order passed under section 143(3) r.w.s. 144C ... Heard both the parties and perused the material available on record. The assessee adopted Comparable Uncontrolled Price ('CUP') method as the most appropriate method to benchmark its international transaction. Upon perusal of the transactions, the TPO noted that the assessee claimed to have received discounts via credit notes from

Osg (India) Private Limited, Gurgaon vs. DCIT, Circle-3(1), Gurgaon

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

ITA 4925/DEL/2024[2021-22]Status: DisposedITAT Delhi04 Feb 2026AY 2021-22

Bench: Shri Yogesh Kumar Us & Shri Brajesh Kumar Singh

Section 143(3)Section 144B

into the following international transactions/ with its Associated Enterprises (AEs): ITA No.- 4925/Del/2024 OSG (India) Pvt. Ltd. S. No. International Amount (INR) Most Transaction Appropriate Method 1. Import of consumable 16212781 TNMM and raw materials 2. Import of finished 189157950 goods 3. Export of manufactured 9697933 goods 4. Commission Income ... into by the Appellant. Thereby the Learned AO/Hon'ble DRP erred in ignoring the application of Transactional Net Margin Method ("TNMM") as the most appropriate method and applied Comparable Uncontrolled Price Method ("CUP") as the most appropriate method. 4. That the Learned AO/ the Hon'ble DRP erred in considering

Zydus Lifesciences Ltd., Ahmedabad vs. The Dy.CIT, Central Circle-2(1), Ahmedabad

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

ITA 392/AHD/2023[2017-18]Status: DisposedITAT Ahmedabad29 Jan 2026AY 2017-18

Bench: SMT. ANNAPURNA GUPTA (Accountant Member), Ms. SUCHITRA KAMBLE (Judicial Member)

For Appellant: Shri Mukesh Patel, Shri Ajit KumarFor Respondent: Shri Prathvi Raj Meena, CIT.DR
Section 153(4)Section 153CSection 35Section 35(1)(i)Section 35(1)(iv)Section 92CSection 92C(2)

pointed out that in the TP study report, the assessee had benchmarked corporate guarantee, charged @1%, by taking “Such Other Method “as the Most Appropriate Method (MAM). The TPO, however, noted that in the TP orders of the assessee for A.Ys ... transfer pricing study report, the assessee was noted to have benchmarked the interest on the said loans by following “Other Method” as the Most Appropriate Method (MAM). The assessee had claimed these transactions to have not given rise to any taxable income and that they had been identified as international

DCIT, Circle - 19(1), Delhi vs. Ramayna Ispat Pvt. Ltd., Delhi

In the result, the appeal of the assessee and Revenue are dismissed

ITA 4147/DEL/2024[2018-19]Status: DisposedITAT Delhi28 Jan 2026AY 2018-19

Bench: Shri Satbeer Singh Godara & Shri Manish Agarwalramayna Ispat Private Limited, Dcit, A-48, 1St Floor, Wazirpur Circle-19(1), Industrial Area, Delhi-110052. Vs. New Delhi. Pan-Aaccr7382R (Appellant) (Respondent) Dcit, Ramayna Ispat Private Limited, A-48, 1St Floor, Wazirpur Circle-19(1), New Delhi. Vs. Industrial Area, Delhi-110052. Pan-Aaccr7382R (Appellant) (Respondent) Assessee By Shri Maneesh Upneja, Ca, Shri Baldev Raj, Ca & Ms. Sanju Kumari, Adv. Department By Shri Khitesh Gupta, Sr. Dr Date Of Hearing 27/11/2025 Date Of Pronouncement 27/11/2025 O R D E R Per Manish Agarwal, Am: These Cross Appeals Are Filed By The Assessee & Revenue Against The Order Of Ld. Commissioner Of Income Tax (Appeals), National Faceless Appeal Centre (Nfac), Delhi [Ld. Cit(A)] Dated 11.07.2024 U/S 250 Of The Income Tax Act, 1961 (“The Act” In Short) For Assessment Year 2018-19. Ramayna Ispat Pvt. Ltd. Vs. Ito 2. Brief Facts Of The Case Are That The Assessee Is A Private Ltd. Company Engaged In The Business Of Manufacturing, Processing, Forging, Casting Mixing Of Various Kinds Of Steel, Carbon Settle, Mild Steel, Stainless Steel, High Speed Steel & Bright Steel Etc. The Return Of Income Was Revised On 28.10.2018 At An Income Of Rs.1,00,96,587/-. The Case Of The Assessee Was Reopened U/S 148 For The Reason That Assessee Has Taken Accommodation Entries Of Bogus Purchases & After Considering The Submissions Made, Ao Had Made The Addition Of Rs.5,78,99,593/- U/S 69C Of The Act Towards Unexplained Expenditure On Account Of Bogus Purchase & Further Invoked The Provisions Of Section 115Bbe Of The Act. The Ao Further Made An Addition Of Rs.3,14,795/- By Estimating The Net Profit Declared By The Assessee. Besides This Further Disallowance Of Rs.9,37,608/- Was Made Out Of Freight Expenses And, Accordingly, The Total Income Of The Assessee Was Assessed At Rs.6,87,83,788/-.

Section 115BSection 147Section 148Section 250Section 690Section 69C

year and succeeding years were provided to this office by the Appellant. Based upon the same this office finds the following as the most appropriate method to make additions at the GP rate as under: Sl. No. Particulars Amount 1 Total Alleged purchases 5,78,99,593/- 2 GP rate

ACIT, Circle-1(1)(1), Bangalore vs. Amazon Developement Centre(India) Private Limited, Bangalore

In the result, the appeal of the revenue for A

ITA 2127/BANG/2024[2012-13]Status: DisposedITAT Bangalore27 Jan 2026AY 2012-13

Bench: Ms. Padmavathy S & Shri Rahul Chaudhary

For Appellant: Ms. Deepashree Rao &For Respondent: Dr. Divya K.J, CIT-DR
Section 250

international jurisprudence itself recognize that there cannot be an exact comparable to a given situation, especially with TNMM as the most appropriate method. 7) Whether the CIT(A) is right in not following the decision of ITAT, Bangalore rendered in the case of M/s Societe Generale Global Solution Centre ... above grounds of appeal.” 4. The assessee in the transfer pricing study, has adopted the Transaction Net Margin Method (TNMM) as the most appropriate method and the Profit Level Indicator (PLI) is considered as (operating profit/ operating cost. The assessee has chosen five comparables as listed below with an arithmetic

DCIT, Circle-1(1)(1), Bangalore vs. Amazon Developement Centre (India) Private Limited, Bangalore

In the result, the appeal of the revenue for A

ITA 2036/BANG/2024[2013-14]Status: DisposedITAT Bangalore27 Jan 2026AY 2013-14

Bench: Ms. Padmavathy S & Shri Rahul Chaudhary

For Appellant: Ms. Deepashree Rao &For Respondent: Dr. Divya K.J, CIT-DR
Section 250

international jurisprudence itself recognize that there cannot be an exact comparable to a given situation, especially with TNMM as the most appropriate method. 7) Whether the CIT(A) is right in not following the decision of ITAT, Bangalore rendered in the case of M/s Societe Generale Global Solution Centre ... above grounds of appeal.” 4. The assessee in the transfer pricing study, has adopted the Transaction Net Margin Method (TNMM) as the most appropriate method and the Profit Level Indicator (PLI) is considered as (operating profit/ operating cost. The assessee has chosen five comparables as listed below with an arithmetic

Ge India Exports Private Limited, Bangalore vs. DCIT, Bangalore

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

ITA 293/BANG/2016[2011-12]Status: DisposedITAT Bangalore27 Jan 2026AY 2011-12

Bench: Shri Waseem Ahmed & Shri Soundararajan K

For Appellant: Shri Sachit Jolly, Sr. Advocate & Ms. ViyushtiFor Respondent: Dr. KJ Divya, CIT (DR)
Section 143(3)Section 144C(5)Section 254

Division. The dispute is confined to extent of SWD division only. The assessee benchmarked its transaction under SWD segment adopting TNNM as most appropriate method and further PLI as OP/OC which arrived at 13.67%. The assessee for the comparability analysis selected 12 comparables. 9.1 The TPO during the assessment proceedings ... No.253 & 293/Bang/2016 Page 14 of 28 The dispute before us is confined only to the SWD segment. The assessee adopted TNMM as the most appropriate method with OP/OC as the PLI. Therefore, the core requirement is that the selected comparables should be functionally similar, operate under similar economic conditions

DCIT, Bangalore vs. M/S Ge India Export Pvt. Ltd., Bangalore

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

ITA 253/BANG/2016[2011-12]Status: DisposedITAT Bangalore27 Jan 2026AY 2011-12

Bench: Shri Waseem Ahmed & Shri Soundararajan K

For Appellant: Shri Sachit Jolly, Sr. Advocate & Ms. ViyushtiFor Respondent: Dr. KJ Divya, CIT (DR)
Section 143(3)Section 144C(5)Section 254

Division. The dispute is confined to extent of SWD division only. The assessee benchmarked its transaction under SWD segment adopting TNNM as most appropriate method and further PLI as OP/OC which arrived at 13.67%. The assessee for the comparability analysis selected 12 comparables. 9.1 The TPO during the assessment proceedings ... No.253 & 293/Bang/2016 Page 14 of 28 The dispute before us is confined only to the SWD segment. The assessee adopted TNMM as the most appropriate method with OP/OC as the PLI. Therefore, the core requirement is that the selected comparables should be functionally similar, operate under similar economic conditions

Par Formulations Private Limited, Chennai vs. DCIT, Chennai

The appeal of the assessee is allowed for statistical purposes

ITA 1009/CHNY/2017[2012-13]Status: DisposedITAT Chennai23 Jan 2026AY 2012-13

Bench: Shri Aby T. Varkey & Ms. Padmavathy.Sआयकर अपील सं./Ita No.1009/Chny/2017 िनधा%रण वष% /Assessment Year: 2012-13

For Respondent: Mr. ARV Sreenivasan, CIT
Section 143(3)Section 92A

Authorized Representative (AR) of the assessee submitted that the assessee has rightly adopted the internal CUP as the most appropriate method and the valuation of intangibles is based on valuation report. The Ld. AR further submitted that the observations of the TPO (para 7.1 of TPO's order) that ... notice that in the TPSR, the assessee has bench marked the transfer of intangible separately using CUP as the most appropriate method. We further notice that for the purpose of bench marking the SPA and the consideration received there-under has been taken as uncontrolled transaction stating that

Kadimi Special Steels Private Limited(Amalgamated With Kadimi Tool Manufacturing Company Private Limited), Delhi vs. ACIT, Circle-13(1), Delhi

In the result, Appeals of the Assessee are allowed

ITA 2246/DEL/2022[2018-19]Status: DisposedITAT Delhi23 Jan 2026AY 2018-19

Bench: Shri Yogesh Kumar U.S. & Shri Brajesh Kumar Singh

Section 143(3)Section 144BSection 144C(3)

disregarding the Comparable Uncontrolled Price ('CUP') Method, being a price-based and direct method, alternatively applied by the appellant, as the most appropriate method based on Customs price database instead of TNMM, applied by the Ld. TPO and by the appellant in its TP Study, without providing cogent reasons. Kadini

Kadimi Special Steels Private Limited(Amalgamated With Kadimi Tool Manufacturing Company Private Limited), New Delhi vs. ACIT, Circle-13(1), Delhi

In the result, Appeals of the Assessee are allowed

ITA 2245/DEL/2022[2017-18]Status: DisposedITAT Delhi23 Jan 2026AY 2017-18

Bench: Shri Yogesh Kumar U.S. & Shri Brajesh Kumar Singh

Section 143(3)Section 144BSection 144C(3)

disregarding the Comparable Uncontrolled Price ('CUP') Method, being a price-based and direct method, alternatively applied by the appellant, as the most appropriate method based on Customs price database instead of TNMM, applied by the Ld. TPO and by the appellant in its TP Study, without providing cogent reasons. Kadini

Brown- Forman Worldwide Llc, Gurgaon vs. ACIT, Int, Taxation, Gurgaon

ITA 2329/DEL/2022[2009-10]Status: DisposedITAT Delhi21 Jan 2026AY 2009-10

Bench: Shrichalla Nagendra Prasad & Shri Amitabh Shukla

Section 144Section 234BSection 271(1)(c)

reference to the TPO for determining the ALP of this international transaction. The TPO did not dispute the application of TNMM as the most appropriate method with the PLI of OP/TC. The assessee had selected 11 companies as comparable. The TPO rejected all of them and made a list

Swatch Group (India) Private Limited, New Delhi vs. Deputy Commissioner of Income Tax, Circle 22(2), C.R. Building

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

ITA 5929/DEL/2024[2021-22]Status: DisposedITAT Delhi14 Jan 2026AY 2021-22

Bench: Shri Challa Nagendra Prasad & Shri Brajesh Kumar Singh[Assessment Year: 2021-22] Swatch Group (India) Private Deputy Commissioner Of Income Limited, Tax, 4Th Floor, Rectangle-I, Plot No. D- Vs Circle 22(2), 4, Saket District Centre, C.R. Building, I.P. Estate, Delhi, New Delhi-110017. 110002. Pan- Aafcs7516R Assessee Revenue

Section 143(3)Section 92C

length price in relation to an international transaction shall be determined by any of the following methods being the most appropriate method, having regard to the nature of transaction or class of transaction or class of associated persons or functions performed by such persons or such other relevant factors ... length price. The said approach is not mandated and stipulated in the Act or the Rules.... 121..... The TPO can then apply an appropriate method and compute the arm's length price of the two independently and even by applying separate methods. This will be in terms of the provisions

D.C.I.T Cir - 10(1), Kolkata vs. M/S Eureka Forbs Ltd, Kolkata

The appeal is dismissed

ITA 2037/KOL/2019[2015-16]Status: DisposedITAT Kolkata12 Jan 2026AY 2015-16

Bench: Shri Pradip Kumar Choubey & Shri Rakesh Mishra

Section 115JSection 14ASection 250Section 92C

facts and law by not allowing the method of benchmarking of the transaction by taking cost of funds plus credit spread as the most appropriate method in the facts of the case of the assessee. 9. That the Ld. CIT(A) has erred on facts and law by not determining

D.C.I.T Cir - 10(1), Kolkata vs. M/S Eureka Forbs Ltd, Kolkata

The appeal is dismissed

ITA 1248/KOL/2019[2014-15]Status: DisposedITAT Kolkata12 Jan 2026AY 2014-15

Bench: Shri Pradip Kumar Choubey & Shri Rakesh Mishra

Section 115JSection 14ASection 250Section 92C

facts and law by not allowing the method of benchmarking of the transaction by taking cost of funds plus credit spread as the most appropriate method in the facts of the case of the assessee. 9. That the Ld. CIT(A) has erred on facts and law by not determining

D.C.I.T Cir - 10(1), Kolkata vs. M/S Eureka Forbs Ltd, Kolkata

The appeal is dismissed

ITA 1247/KOL/2019[2013-14]Status: DisposedITAT Kolkata12 Jan 2026AY 2013-14

Bench: Shri Pradip Kumar Choubey & Shri Rakesh Mishra

Section 115JSection 14ASection 250Section 92C

facts and law by not allowing the method of benchmarking of the transaction by taking cost of funds plus credit spread as the most appropriate method in the facts of the case of the assessee. 9. That the Ld. CIT(A) has erred on facts and law by not determining

D.C.I.T Cir - 10(1), Kolkata vs. M/S Eureka Forbs Ltd, Kolkata

The appeal is dismissed

ITA 1246/KOL/2019[2012-13]Status: DisposedITAT Kolkata12 Jan 2026AY 2012-13

Bench: Shri Pradip Kumar Choubey & Shri Rakesh Mishra

Section 115JSection 14ASection 250Section 92C

facts and law by not allowing the method of benchmarking of the transaction by taking cost of funds plus credit spread as the most appropriate method in the facts of the case of the assessee. 9. That the Ld. CIT(A) has erred on facts and law by not determining

Red Hat India Private Limited, Mumbai vs. Assistant Commissioner of Income Tax, Circle 15(3)(1), Mumbai

In the result, the appeal of the assessee is allowed

ITA 3853/MUM/2025[2016-17]Status: DisposedITAT Mumbai12 Jan 2026AY 2016-17
Section 143(3)Section 154Section 254Section 92C

enabled services to group entities. The complete details of such international transactions, along with the Associated Enterprises involved, the amounts transacted, and the most appropriate method applied, are tabulated and are reproduced hereunder. S International AE Amount Method No. transaction 1 Payment of Red Hat 94,99,29,936/- TNMM

Te Connectivity India Private Limited, Bangalore vs. The Office of the Deputy Commissioner of Income-Tax, Circle 7(1)(1), Bangalore

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

ITA 1789/BANG/2024[2020-21]Status: DisposedITAT Bangalore08 Jan 2026AY 2020-21

Bench: Shri Waseem Ahmed & Shri Soundararajan K

For Appellant: Shri Darpan Kriplani, CAFor Respondent: Dr. KJ Dhivya, CIT (DR)

Trading segment - License manufacturing segment - Service segment 10. The international transactions under the different segments were benchmarked at entity level adopting TNMM as most appropriate method except for certain transactions such reimbursement of ESOP, recovery of expenses and interest expenses were benchmark using other methods and CUP method respectively ... conducting a detailed and exhaustive analysis of the assessee’s international transactions, had rightly determined the arm’s length price by applying the most appropriate method and selecting proper comparables. Accordingly, the IT(TP)A No.1789/Bang/2024 Page 18 of 38 DRP rightly upheld the transfer pricing adjustments, and therefore

Giesecke and Devrient India Pvt Ltd., Gurgaon vs. ACIT (OSD), New Delhi

In the result, assessee’s appeal in ITA No

ITA 1428/DEL/2022[2018-19]Status: DisposedITAT Delhi07 Jan 2026AY 2018-19

Bench: Ms. Madhumita Roy & Smt. Renu Jauhriassessment Year: 2018-19

Section 119Section 143(3)Section 144BSection 144B(8)Section 144C(13)Section 144C(5)

summarily rejecting the approach adopted by the Appellant wherein it has benchmarked this international transaction using Transactional Net Margin Method ("TNMM") as the most appropriate method. 29. That the TPO/DRP erred in making/upholding the adjustments while applying the principles of "commercial expediency", which approach had been rejected judicially