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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

Technimont Spa India Project Office, Mumbai vs. DCIT (It) 4(1)(2), Mumbai

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

ITA 2152/MUM/2017[2012-13]Status: DisposedITAT Mumbai21 Apr 2023AY 2012-13

Bench: Shri Aby T. Varkey, Jm & Shri S Rifaur Rahman, Am आयकर अपील सं/ I.T.A. No.2152/Mum/2017 (निर्धारण वर्ा / Assessment Years: 2012-13) M/S. Tecnimont Spa India बिधम/ Deputy Commissioner Of Office Income Tax- 4(1)(2) Vs. Tecnimont Icb House, Room No. 1712 17Th Chincholi Bunder, 504 Link Floor, Air India Building Road, Malad (W), Mumbai- Nariman Point, Mumbai- 400064. 400021 स्थधयी लेखध सं./जीआइआर सं./Pan/Gir No. : Aaact8224A (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) Assessee By: Shri. M.P. Lohia A/W Pranay Gandhi Revenue By: Shri Manoj Kumar Cit Dr सुनवाई की तारीख / Date Of Hearing: 15/02/2023 घोषणा की तारीख /Date Of Pronouncement: 21/04/2023 आदेश / O R D E R Per Aby T. Varkey, Jm: This Is An Appeal Preferred By The Assessee Against The Order Of The Ao Dated Nil Passed U/S 143(3) Read With Section 144C(1) Of The Income Tax Act, 1961 (Hereinafter “The Act”). 2. At The Outset, The Ld. Ar Of The Assessee Brought To Our Notice That The Only Issue Is Regarding The Transfer Pricing Adjustment Made By The Ao Pursuant To The Dispute Resolution Panel (Drp) Direction Dated 23.12.2016. According To The Ld. Ar, The Assessee/Tipo Is A Project Office/Pe Of M/S. Tecnimont Spa (Tcm), A Foreign Company Incorporated At Milan, Italy Which Is Engaged In Engineering & Construction World-Wide In Section Of Chemical, Petro-Chemical Oil & Gas, Energy Etc; According To The Ld. Ar, The Assessee/Tipo Has Been Awarded Inter-Alia Turnkey Project By M/S. Indian Oil Corporation (Hereinafter “M/S. Iocl”) At Panipat Project. & The Assessee/Tipo

For Appellant: Shri. M.P. Lohia a/w PranayFor Respondent: Shri Manoj Kumar CIT DR
Section 143(3)Section 144C(1)

study being neither signed nor auditors name not discernable, he took note of the earlier years [two (2) years] wherein the Most Appropriate method (MAM) adopted was TNMM instead of CPM [as suggested in this year T.P. Study], and he adopted TNMM as MAM; and consequently, [PLI is operating profit