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“CUP method”

Transfer PricingSection 92CSection 92C828 judgments

The decision most relied on for CUP method is Serdia Pharmaceuticals (India) (P.) Ltd. v. Asstt. CIT (44 SOT 391), cited in 39 judgments on BharatTax.

Leading authorities on CUP method

Serdia Pharmaceuticals (India) (P.) Ltd. v. Asstt. CIT
44 SOT 391 · 2011 · ITAT
39
citing judgments

The Comparable Uncontrolled Price (CUP) method is preferred over indirect methods for determining the arm's length price in transfer pricing matters, especially for royalty payments.

Asstt. CIT v. MSS India (P.) Ltd.
32 SOT 132 · 2009 · ITAT
26
citing judgments

The Comparable Uncontrolled Price (CUP) method is preferred when comparable transactions with third parties are available to determine if transfer prices are at arm's length. Transactional profit methods are considered methods of last resort.

10 Glenmark Pharmaceuticals Ltd. v. Addl. CIT
43 Taxmann.com 191 · 2014 · Reported
26
citing judgments

Bank guarantee commission prices are not comparable to external CUPs for benchmarking corporate guarantees in transfer pricing.

CIT v. Eicher Motors Ltd.
293 ITR 464 · 2007 · High Court
22
citing judgments

Expenditure by way of royalty is an allowable revenue deduction if it is for a limited license to use know-how, where the assessee is not vested with proprietary rights. This is especially true if the payment falls within a reasonable range based on comparable transactions.

CIT v. Star Paper Mills Ltd.
172 Taxmann.com 391 · 2025 · High Court
21
citing judgments

The transfer price for intra-group services, specifically the sale of power from a captive power plant to a manufacturing unit, can be benchmarked based on the price at which the manufacturing unit procures power from the State Electricity Board, especially when it reflects a reasonable and arm's length price.

ACIT v. MSS India (P) Ltd.
123 TTJ 657 · 2009 · ITAT
16
citing judgments

A transfer pricing officer (TPO) must justify preferring one method over another, such as the Transactional Net Margin Method (TNMM) over the Comparable Uncontrolled Price (CUP) method, by demonstrating fallacies in the application of the preferred standard method.

Star India P. Ltd. v. ACIT
317 ITR 292 · 2009 · ITAT
16
citing judgments

When analyzing international transactions, separate classes of transactions, such as fees for technical know-how, use of trademarks, and procurement, must be analyzed individually, as each impacts profits. Aggregation of such transactions is not permissible.

Gharda Chemicals Ltd. v. Oy. CIT
39 SOT 93 · 2010 · ITAT
16
citing judgments

The Comparable Uncontrolled Price (CUP) method is the most preferred method for determining arm's length price in international transactions, but it requires a high degree of comparability. If comparables are not identical, the CUP method may not be applicable unless another method is proven to be more reliable in the specific fact situation.

Judgments citing CUP method

Siemens Aktiengesellschaft, Mumbai vs. DDIT (It) 2(1), Mumbai

In the result, grounds No

ITA 7779/MUM/2012[2008-09]Status: DisposedITAT Mumbai16 Jun 2025AY 2008-09

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI OMKARESHWAR CHIDARA (Accountant Member)

Section 143(3)Section 234BSection 271(1)(c)Section 271G

cannot be held that assessee had under charged albeit, Indian AE have over paid. 18. Additionally, it had been submitted that assessee has borrowed CUP method to benchmark the transaction considering that the rates are approved by the Central Government / RBI which is to be considered to be compliant with

Deputy Commissioner of Income Tax, Guntur vs. Ccl Products (India) Limited, Guntur

In the result, appeal filed by the Revenue is dismissed

ITA 98/VIZ/2025[2012-13]Status: DisposedITAT Visakhapatnam10 Jun 2025AY 2012-13

Bench: Shri V. Durga Rao, Hon’Ble & Shri S Balakrishnan, Hon’Bleआयकरअपीलसं./I.T.A. No.97/Viz/2025 (निर्धारण वर्ा/ Assessment Year: 2011-12) Deputy Commissioner Of Income V. Ccl Products (India) Limited, Tax, Guntur-522330, Guntur-522004. Andhra Pradesh. Pan: Aaacc9552G (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent)

Section 143(3)Section 263Section 271ASection 92C

made to AE and non-AE, without appreciating that the TPO has selected the appropriate comparables after making necessary adjustments as required under the CUP method? (iii) Whether on the facts and in the circumstances of the case and in law the CIT(A) is justified in comparing the entire ... Grandsaugreen SA, Switzerland in various packing sizes ranging from 45 gms to 500 gms and also in bulk sizes. For this, the assessee adopted CUP method and held the same to beat Arm’s Length and did not suggest any adjustment. The assessee further submitted that the TPO refused

Deputy Commissioner of Income Tax, Guntur vs. Ccl Products (India) Limited, Guntur

In the result, appeal filed by the Revenue is dismissed

ITA 97/VIZ/2025[2011-12]Status: DisposedITAT Visakhapatnam10 Jun 2025AY 2011-12

Bench: Shri V. Durga Rao, Hon’Ble & Shri S Balakrishnan, Hon’Bleआयकरअपीलसं./I.T.A. No.97/Viz/2025 (निर्धारण वर्ा/ Assessment Year: 2011-12) Deputy Commissioner Of Income V. Ccl Products (India) Limited, Tax, Guntur-522330, Guntur-522004. Andhra Pradesh. Pan: Aaacc9552G (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent)

Section 143(3)Section 263Section 271ASection 92C

made to AE and non-AE, without appreciating that the TPO has selected the appropriate comparables after making necessary adjustments as required under the CUP method? (iii) Whether on the facts and in the circumstances of the case and in law the CIT(A) is justified in comparing the entire ... Grandsaugreen SA, Switzerland in various packing sizes ranging from 45 gms to 500 gms and also in bulk sizes. For this, the assessee adopted CUP method and held the same to beat Arm’s Length and did not suggest any adjustment. The assessee further submitted that the TPO refused

Deputy Commissioner of Income Tax, Guntur vs. Ccl Products (India) Limited, Duggirala

In the result, appeal filed by the Revenue is dismissed

ITA 152/VIZ/2025[2016-17]Status: DisposedITAT Visakhapatnam10 Jun 2025AY 2016-17

Bench: Shri V. Durga Rao, Hon’Ble & Shri S Balakrishnan, Hon’Bleआयकरअपीलसं./I.T.A. No.97/Viz/2025 (निर्धारण वर्ा/ Assessment Year: 2011-12) Deputy Commissioner Of Income V. Ccl Products (India) Limited, Tax, Guntur-522330, Guntur-522004. Andhra Pradesh. Pan: Aaacc9552G (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent)

Section 143(3)Section 263Section 271ASection 92C

made to AE and non-AE, without appreciating that the TPO has selected the appropriate comparables after making necessary adjustments as required under the CUP method? (iii) Whether on the facts and in the circumstances of the case and in law the CIT(A) is justified in comparing the entire ... Grandsaugreen SA, Switzerland in various packing sizes ranging from 45 gms to 500 gms and also in bulk sizes. For this, the assessee adopted CUP method and held the same to beat Arm’s Length and did not suggest any adjustment. The assessee further submitted that the TPO refused

Pramod Lakra, Deputy Commissioner of Income Tax, Circle -11(1), Kolkata vs. Philips Carbon Black Ltd, Kolkata

In the result, all the appeals of the revenue are dismissed and the appeal filed by the assessee is partly allowed for statistical purposes

ITA 2459/KOL/2024[2021-22]Status: DisposedITAT Kolkata10 Jun 2025AY 2021-22

Bench: Shri Pradip Kumar Choubey&Shri Sanjay Awasthi]

Section 115JSection 143(1)Section 143(2)Section 14ASection 35Section 35(2)(ab)Section 37Section 80GSection 80ISection 92C

electricity transferred from the power plants to the carbon black manufacturing units was benchmarked at the rates of Rs.5.49/unit, Rs.5.50/unit & Rs.5.91/unit by applying the CUP Method viz., the landed price at which the manufacturing unit would have procured power from the respective SEBs at West Bengal, Kerala & Gujarat. After deducting

Pramod Lakra, Deputy Commissioner of Income Tax, Circle-11(1), Kolkata vs. Phillips Carbon Black Ltd, Kolkata

In the result, all the appeals of the revenue are dismissed and the appeal filed by the assessee is partly allowed for statistical purposes

ITA 2458/KOL/2024[2020-21]Status: DisposedITAT Kolkata10 Jun 2025AY 2020-21

Bench: Shri Pradip Kumar Choubey&Shri Sanjay Awasthi]

Section 115JSection 143(1)Section 143(2)Section 14ASection 35Section 35(2)(ab)Section 37Section 80GSection 80ISection 92C

electricity transferred from the power plants to the carbon black manufacturing units was benchmarked at the rates of Rs.5.49/unit, Rs.5.50/unit & Rs.5.91/unit by applying the CUP Method viz., the landed price at which the manufacturing unit would have procured power from the respective SEBs at West Bengal, Kerala & Gujarat. After deducting

Pramod Lakra, Deputy Commissioner of Income Tax, Circle 11(1), Kolkata vs. Phillips Carbon Black Ltd., Kolkata

In the result, all the appeals of the revenue are dismissed and the appeal filed by the assessee is partly allowed for statistical purposes

ITA 2457/KOL/2024[2018-19]Status: DisposedITAT Kolkata10 Jun 2025AY 2018-19

Bench: Shri Pradip Kumar Choubey&Shri Sanjay Awasthi]

Section 115JSection 143(1)Section 143(2)Section 14ASection 35Section 35(2)(ab)Section 37Section 80GSection 80ISection 92C

electricity transferred from the power plants to the carbon black manufacturing units was benchmarked at the rates of Rs.5.49/unit, Rs.5.50/unit & Rs.5.91/unit by applying the CUP Method viz., the landed price at which the manufacturing unit would have procured power from the respective SEBs at West Bengal, Kerala & Gujarat. After deducting

Pramod Lakra, Deputy Commissioner of Income Tax, Circle 11(1), Kolkata vs. Phillips Carbon Black Ltd, Kolkata

In the result, all the appeals of the revenue are dismissed and the appeal filed by the assessee is partly allowed for statistical purposes

ITA 2456/KOL/2024[2017-18]Status: DisposedITAT Kolkata10 Jun 2025AY 2017-18

Bench: Shri Pradip Kumar Choubey&Shri Sanjay Awasthi]

Section 115JSection 143(1)Section 143(2)Section 14ASection 35Section 35(2)(ab)Section 37Section 80GSection 80ISection 92C

electricity transferred from the power plants to the carbon black manufacturing units was benchmarked at the rates of Rs.5.49/unit, Rs.5.50/unit & Rs.5.91/unit by applying the CUP Method viz., the landed price at which the manufacturing unit would have procured power from the respective SEBs at West Bengal, Kerala & Gujarat. After deducting

Pcbl Limited, Kolkata vs. A.C.I.T., Circle - 11(1), Kolkata

In the result, all the appeals of the revenue are dismissed and the appeal filed by the assessee is partly allowed for statistical purposes

ITA 2034/KOL/2024[2020-2021]Status: DisposedITAT Kolkata10 Jun 2025AY 2020-2021

Bench: Shri Pradip Kumar Choubey&Shri Sanjay Awasthi]

Section 115JSection 143(1)Section 143(2)Section 14ASection 35Section 35(2)(ab)Section 37Section 80GSection 80ISection 92C

electricity transferred from the power plants to the carbon black manufacturing units was benchmarked at the rates of Rs.5.49/unit, Rs.5.50/unit & Rs.5.91/unit by applying the CUP Method viz., the landed price at which the manufacturing unit would have procured power from the respective SEBs at West Bengal, Kerala & Gujarat. After deducting

Inlogic Technologies Private Limited, Chennai vs. DCIT Corp. Circle 1(1), Chennai

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

ITA 3323/CHNY/2024[2021-22]Status: DisposedITAT Chennai09 Jun 2025AY 2021-22

Bench: Shri George George K, Hon’Ble & Shri S.R. Raghunatha, Hon’Bleआयकर अपीलसं./Ita No.: 3323/Chny/2024 िनधा"रण वष" / Assessment Year: 2021-22

For Appellant: Shri Vikram Vijayaraghavan, AdvocateFor Respondent: Shri A. Sasikumar, CIT
Section 143(3)Section 144BSection 153

proceedings that the transactions between the appellant and its AE (ie.Medtech) could be regarded as having done at arm's length by using CUP Method as the most appropriate method. I2. The Ld. DRP have erred in not accepting the alternate submission of the appellant that the CUP Method could ... used as the most appropriate method by stating the no documentation, sufficient information and reason for adopted CUP Method by the appellant, which is incorrect. GROUNDS 13 & 14 - Erroneous exclusion of comparable – applying <25% RPT filter :-3-: ITA. No:3323/CHNY/2024 - Seshachal Technologies Ltd - Cadsys (Inda) Ltd - Daffgdil Software

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)

Since the TPO in the present year under consideration has proceeded to make the TP adjustment on the mistaken fact that assessee has followed CUP method, we deem it fit and appropriate to remit this issue back to the TPO for fresh analysis considering the actual method followed

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

assessee company by applying SBI-PLR, and substituting the same by adopting interest rate on “Masala Bonds” transactions as a comparable under the CUP method. The Ld. AR to fortify his contention that the interest paid on the unsecured loans in the form of ECBs denominated in Indian Rupees ... HDFC: 7.875%; and (ii) NTPC: 7.48%, and called upon the assessee company to explain that as to why the “Comparable Uncontrolled Price” (in short, “CUP”) method be not adopted for benchmarking the transaction of interest payment on the Indian rupee denominated ECBs. The TPO after considering the average interest rate

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

from its non-AEs and that not charging any interest to its AEs is consistent with the arm's length principle while applying the CUP method for determining the ALP. 11. The Ld. DRP/AO has erred in applying the rate of interest on Prime Lending Rate of SBI (prevailing ... associated enterprises and thereby not charging any interest to its associated enterprise is consistent with the arm's-length principle while applying the CUP method for determining the arm's-length price. Even otherwise, it was submitted that the lower authorities are not correct in applying the rate of interest

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

rate of 1.90% for charging guarantee commission. The learned TPO proposed proposed proposed comparable comparable comparable uncontrolled uncontrolled uncontrolled price(CUP) price(CUP) price(CUP) method method method for for for benchmarking using the benchmarking using the mean or average bank guarantee average bank guarantee commission, which is the commission ... accordance with the provisions of the relevant rules provisions of the relevant rules i.e. Rule 10B (relating to CUP i.e. Rule 10B (relating to CUP method) of income tax rules, 1962. method) of income tax rules, 1962. 5.5 The learned TPO rejected the rate of 0.5% The learned TPO rejected

DCIT-CC-4(3), Mumbai vs. Era Realtors Private Limited, Mumbai

In the result, the ground No

ITA 3096/MUM/2023[2013-14]Status: DisposedITAT Mumbai30 May 2025AY 2013-14

Bench: Shri Pawan Singh, Hon'Bleshri Girish Agrawal, Hon'Ble

Section 132Section 143(2)Section 153ASection 254(1)Section 92C

considered 'Nil.' The assessee vide its reply dated 04.10.2018 stated that the benchmarking was done by the assessee as per the internal CUP method and the lending rates of 7.2. the banks during the year. However, the explanation of the assessee is not acceptable. In view of the discussion ... making addition of interest paid to debenture without appreciating the fact that debenture issued by the assessee for benchmarking was done as per internal CUP method, thus the addition may be deleted. The assessee 12 also stated that they have provided sufficient evinces to prove the identity, capacity and creditworthiness

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)

paid a sum of ₹ 6 crores to UC Singapore as interest on such CCDs. The assessee has benchmarked the transaction by applying marked CUP method wherein set of 10 comparables, the interest rate was ranging between 8.5 to 12 % of 10% and the assessee had paid interest @ 12 %. Thus ... thus submitted by Ld.AR that it is a settled law that ALP of a transaction cannot be benchmarked as NIL by applying CUP method without comparing the same within uncontrolled transaction therefore, he prayed for the deletion of the adjustment made by the AO/TPO and upheld

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

quality as well as the price along with 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 ... segment wise profitability made to AE’s and non-AE’s in 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

Wrigley India Private Limited, Delhi vs. ACIT, Circle-27(2), Delhi

ITA 953/DEL/2022[2016-17]Status: DisposedITAT Delhi29 May 2025AY 2016-17

Bench: Shri Vikas Awasthy & Shri Manish Agarwal

Section 250(6)Section 92CSection 92C(3)Section 92D

according to the revenue authorities, delayed. In any event, even when an ALP is made in respect excessive credit period allowed under the CUP method, stated by the TPO, the comparable has to be dues recoverable from a debtor and not a borrower. It appears that the TPO has adopted ... that the continuing debit balances of associated enterprises can be treated as 'international transactions under section 92 B, the right course of applying the CUP method, in the case of non charging of interest on overdue balances. would have been by comparing this not charging of interest with other cases

Wrigley India Private Limited, Delhi vs. ACIT, Circle-27(2), Delhi

ITA 952/DEL/2022[2015-16]Status: DisposedITAT Delhi29 May 2025AY 2015-16

Bench: Shri Vikas Awasthy & Shri Manish Agarwal

Section 250(6)Section 92CSection 92C(3)Section 92D

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘I': NEW DELHI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER AND SHRI MANISH

DCIT, Circle-25(1), New Delhi vs. Wrigley India P.Ltd, New Delhi

ITA 1295/DEL/2022[2016-17]Status: DisposedITAT Delhi29 May 2025AY 2016-17

Bench: Shri Vikas Awasthy & Shri Manish Agarwal

Section 250(6)Section 92CSection 92C(3)Section 92D

payment is, according to the revenue authorities, delayed. In any event, even when an ALP is made in excessive credit period allowed under the CUP method, stated by the TPΟ, the comparable has to be dues recoverable from a debtor and not a borrower. It appears that ... that the continuing debit balances of associated enterprises can be treated as 'international transactions under section 92 B, the right course of applying the CUP method, in the case of non charging of interest on overdue balances. would have been by comparing this not charging of interest with other cases