“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

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

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

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

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

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

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

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

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

International Seaport Dredging Limited, Chennai vs. DCIT, Chennai

The appeal stand allowed

ITA 72/CHNY/2018[2013-14]Status: DisposedITAT Chennai02 May 2025AY 2013-14

Bench: Hon’Ble Shri Manoj Kumar Aggarwal, Am & Hon’Ble Shri Manu Kumar Giri, Jm आयकर अपील सं./ Ita No.72/Chny/2018 (िनधा)रणवष) / Assessment Year: 2013-14) & आयकर अपील सं./ It (Tp)A No.35/Chny/2018 (िनधा)रणवष) / Assessment Year: 2014-15) & आयकर अपील सं./ It (Tp)A No.87/Chny/2019 (िनधा)रणवष) / Assessment Year: 2015-16) M/S. International Seaport Dredging Dcit / Jcit(Osd) Private Limited, Corporate Circle-2(2) बनाम 5Th Floor, Challam Towers, Chennai. Old No.62, New No.113, / Vs. Dr.Radhakrishnan Salai Chennai-600 004. "थायीलेखासं./जीआइआरसं./Pan/Tan No. Aabci-2286-E (अपीलाथ"/Appellant) : (""थ" / Respondent) अपीलाथ"कीओरसे/ Appellant By : Shri Ashik Shah (C.A) – Ld.Ar ""थ"कीओरसे/Respondent By : Shri A.Sasi Kumar (Cit) -Ld. Dr सुनवाईकीतारीख/Date Of Hearing : 05-02-2025 घोषणाकीतारीख /Date Of Pronouncement : 02-05-2025 आदेश / O R D E R Per Manu Kumar Giri, Jm: These Appeals By Assessee For Assessment Years (Ay) 2013-14 & 2014-15 Arise Out Of The Separate Orders Of Assessments Framed By Ld.

For Appellant: Shri Ashik Shah (C.A) – Ld.ARFor Respondent: Shri A.Sasi Kumar (CIT) -Ld. DR

Section 143(3)

services provided in a comparable uncontrolled transaction, or a number of such transactions, is to be identified. Thus, for the purpose of applying CUP method, the services rendered by the appellant have to be compared with price paid for similar services received by parties in an uncontrolled transaction. However ... that "where no data was available in respect of uncontrolled transactions which were similar to transactions of assessee with its foreign associated enterprise, CUP method could not be considered as most appropriate method to determine arm's length price (ALP) of royalty paid by assesse to its AE for technology

Ivl Dhunseri Petrochem Industries Private Limited, Kolkata vs. D.C.I.T., Circle - 11(1), Kolkata

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

ITA 1712/KOL/2024[2020-2021]Status: DisposedITAT Kolkata24 Apr 2025AY 2020-2021

Bench: Shri Rajesh Kumar & Shri Pradip Kumar Choubeyआयकर अपील सं/Ita No.1712/Kol/2024 (नििाारण वर्ा / Assessment Year : 2020-2021) Ivl Dhunseri Petrochem Vs Dcit, Circle-11(1), Kolkata Industries Pvt. Ltd. Dhunseri House, 4A Woodburn Park, L.R.Sarani, West Bengal-700020 Pan No. :Aafcd 5214 M (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) नििााररती की ओर से /Assessee By : Shri Akkal Dudhewala, Ca & Vidhi Ladia, Ca राजस्व की ओर से /Revenue By : Pradip Kumar Mondal, Cit-Dr सुनवाई की तारीख / Date Of Hearing : 19/03/2025 घोषणा की तारीख/Date Of Pronouncement : 23/04/2025 आदेश / O R D E R Rajesh Kumar, Am : This Is An Appeal Filed By The Assessee Against The Order Dated 26/07/2024, Passed By The Assessment Unit, National Faceless Assessment Centre U/S.143(3) R.W.S.144C(13) R.W.S.144B Of The Act, For The Assessment Year 2020-2021 On The Following Grounds :- 1.(A) For That On The Facts & In The Circumstances Of The Case & In Law, The Tpo Erred In Making A Downward Adjustment Of Rs.24,72,79,392/- In Respect Of The Transfer Value Of Power By The Captive Power Plant At Haldia, West Bengal. (B) For That On The Facts & In The Circumstances Of The Case & In Law, The Methodology Followed By The Assessee To Benchmark The Arm'S Length Value Of The Power Transferred By The Eligible Unit To The Non-Eligible Unit Fulfilled The Internal Cup Parameters & In That View Of The Matter The Transfer Pricing Adjustment Made By The Tpo Was Impermissible On The Given Facts & In Law. (C) For That On The Facts & In The Circumstances Of The Case & In Law, The Manner In Which The Drp/Tpo Has Benchmarked

For Appellant: Shri Akkal Dudhewala, CA and VidhiFor Respondent: Pradip Kumar Mondal, CIT-DR

Section 115Section 143(3)Section 234ASection 270ASection 80ISection 92C

which the non- eligible units/manufacturing units procured the power from unrelated party i.e. SEB. Now the issue before us whether the CUP method can be applied to bench mark specified domestic transactions of transferring power by CPPs to non eligible units. We have also perused the provisions as contained ... acquired under similar market conditions. It is also settled that choice of tested party is of lesser significance for the purpose of application of CUP method but instead key factor in application of CUP is product comparability and similar market conditions. Further the CUP method can be classified into

The Dcitbharuch Range, Bharuch vs. Heubach Colour Pvt.Ltd., Ankleshwar

In the result, Ground Number 3 of the Department’s appeal is dismissed

ITA 547/AHD/2012[2007-08]Status: DisposedITAT Ahmedabad21 Apr 2025AY 2007-08

Bench: Smt. Annapurna Gupta & Shri Siddhartha Nautiyal

For Appellant: Ms. Amrin Pathan, A.RFor Respondent: Dr. Darsi Suman Ratnam, CIT-DR

Assessee should be calculated using the "Net Present Value", NPV/ Royalty Savings Method under Income Approach" as against more appropriate Comparable Uncontrolled Price (CUP) method used by the Transfer Pricing Officer with comparable transaction of Colour Ltd, the Associated Enterprise of the assessee with Avecia Ltd. (ii) the Ld.CIT ... business. However, the Transfer Pricing Officer (TPO) disagreed with the valuation method used by the Assessee and instead proposed using the Comparable Uncontrolled Price (CUP) method for valuing the intangibles. The TPO was of the view that the price paid by CL to Avecia Ltd. in 2002 for similar intangibles

M/S Lubrizol India Private Limited, Mumbai vs. The Office of the Deputy Commissioner of Income Tax, DCIT/ACIT, Circle-3(4), Mumbai

In the result, the appeals of assessee for both AYs are allowed

ITA 6099/MUM/2024[2021-22]Status: DisposedITAT Mumbai21 Apr 2025AY 2021-22

Bench: Shri Pawan Singh & Shri Girish Agrawal & (Physical Hearing) M/S. Lubrizol India Private Limited Deputy Commissioner Of Plant 9/3, Thane-Belapur Road, Turbhe, Vs Income Tax, Dcit/Acit, Navi Mumbai – 400705. Circle – 3(4), Mumbai. [Pan No. Aaacl 0126 H] Appellant / Assessee Respondent / Revenue Assessee By Shri Paras Savla Advocate A/W Ms. Rajnandini Shukla, Ca/ Ar Revenue By Ms. Neena Jeph, (Cit Dr) / Shri Kiran Unavekar, Sr. Dr Date Of Hearing 27.03.2025 Date Of Pronouncement 21.04.2025 Order Under Section 254(1) Of Income Tax Act

Section 254(1)

while benchmarking the balance international transaction pertaining to export of chemical additives for which TNMM was accepted. 8. Erred in selecting Comparable Uncontrolled Price ("CUP") Method as the MAM for benchmarking the said international transaction merely on the basis that the details pertaining to similar transactions with third parties were ... available. 9. Erred in applying CUP method by comparing sales made to unrelated parties with that of export sales made to AEs in overseas market, in spite of significant factors like difference in volume geographical market, lot size difference, credit ITA No. 4630 & 6099/Mum/2024

Lubrizol India Private Limited, Mumbai vs. DCIT, Circle-3(4), Mumbai

In the result, the appeals of assessee for both AYs are allowed

ITA 4630/MUM/2024[2020-21]Status: DisposedITAT Mumbai21 Apr 2025AY 2020-21

Section 254(1)

Tupperware India Private Limited, New Delhi vs. DCIT, Circle-25(1), New Delhi

In the result, the appeal of the assessee for AY 2018-19 is partly allowed for statistical purposes

ITA 462/DEL/2022[2017-18]Status: DisposedITAT Delhi17 Apr 2025AY 2017-18

Bench: Shri Mahavir Singh & Shri M. Balaganesh

For Appellant: Shri Rohit Tiwari, AdvFor Respondent: Shri S. K. Jadav, CIT DR

Section 143(3)Section 144BSection 144CSection 144C(3)Section 92CSection 92F

Appellant in respect of payment of management service fees and arbitrarily determined arm's length price as 'Nil' by applying Comparable Uncontrolled Price Method ("CUP") Method in contravention of the provisions of Rule 10B of the Income Tax Rules ("the Rules"), thereby resulting in an adjustment ... response vide letter dated 22.01.2021. The TPO proceeded to determine the ALP of payment of management service as Nil by apply Comparable Uncontrolled Price (CUP) method in contravention of provision of Rule 10B of the Rules and undertake AN adjustment amounting to Rs. 4,27,84,366/-. Both the parties

Tupperware India Private Limited, New Delhi vs. ACIT, Circle-25(1), New Delhi

In the result, the appeal of the assessee for AY 2018-19 is partly allowed for statistical purposes

ITA 2409/DEL/2022[2018-19]Status: DisposedITAT Delhi17 Apr 2025AY 2018-19

Bench: Shri Mahavir Singh & Shri M. Balaganesh

For Appellant: Shri Rohit Tiwari, AdvFor Respondent: Shri S. K. Jadav, CIT DR

Section 143(3)Section 144BSection 144CSection 144C(3)Section 92CSection 92F

Oakton Global Technology Services Centre (I) Private Limited, Hyderabad vs. Dy. Commissioner of Income Tax, Circle-16(2), Hyderabad

In the result, the appeal of the assessee in ITA No

ITA 32/HYD/2019[2014-15]Status: DisposedITAT Hyderabad16 Apr 2025AY 2014-15

Bench: Shri Vijay Pal Rao & Shri Madhusudan Sawdia

For Appellant: Shri Ravi Bharadawaj, C.AFor Respondent: Shri B. Bala Krishna, CIT-DR

Section 143(3)Section 92B

have referred to the PLR rates only by way of analogy so as to state the prevailing interest rates in India, but while applying CUP method for comparability, they had applied LIBOR rates prevailing and had applied a mark-up of 700 points on account of low credit rating

Oakton Global Technology Services Centre (India) Private Limited, Hyderabad vs. Deputy Commissioner of Income Tax, Circle-16(2), Hyderabad

In the result, the appeal of the assessee in ITA No

ITA 2130/HYD/2017[2013-14]Status: DisposedITAT Hyderabad16 Apr 2025AY 2013-14

Bench: Shri Vijay Pal Rao & Shri Madhusudan Sawdia

For Appellant: Shri Ravi Bharadawaj, C.AFor Respondent: Shri B. Bala Krishna, CIT-DR

Section 143(3)Section 92B

DCIT Cir-4(1), Kolkata, Aayakar Bhawan vs. Mcleod Russel India Ltd, Kolkata

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

ITA 1169/KOL/2023[2013-14]Status: DisposedITAT Kolkata16 Apr 2025AY 2013-14

Bench: Shri Rajesh Kumar&Shri Pradip Kumar Choubey]

Section 115OSection 143(2)Section 14ASection 80ISection 92C

disposed of the inter-unit transfers. The ld. Counsel further submits that the TPO had selectively applied the monthly average price method under CUP method and made adjustment only on those months where the purchases were unfavourable and ignored the remaining moths where the inter-unit transfer price were higher ... been drawn by the Ld. A.R on the order passed by the Ld. CIT(A) for AY 2014-15 with regard to application of CUP method which is as follows: 5.3.5. Rule 10B of the I. T. Rules, 1962 prescribes the following with regard to application of the CUP method

Dr. Bhim Rao Ambedkar Mahasang Haryana, Faridabad vs. CIT (Exemptions), Chandigarh/Faridabad

In the result, both the appeals are partly allowed for statistical purposes

ITA 3196/DEL/2023[NA]Status: DisposedITAT Delhi08 Apr 2025

Bench: Shri S Rifaur Rahman & Shri Vimal Kumarita No. 3195/Del/2017 Assessment Year: 2003-04 Ita No. 3196/Del/2017 Assessment Year: 2004-05 Geodis Overseas Pvt.Ltd., Vs. Asstt. Commissioner Of Building No.5,Tower B, Income Tax, 10Th Floor, Dlf Cyber City, Company Circle- Ii(1), Phase Iii, Gurgaon Chennai-34 Pin: 122 002 Pan No. Aaacc6168L (Appellant) (Respondent)

For Appellant: Shri Vishal Kalra, Adv. & ShriFor Respondent: Ms. Neeju Gupta, Sr. DR

Section 250Section 92C

ground that the Appellant had itself applied TNMM for benchmarking the freight forwarding transaction and never contended to apply comparable uncontrolled price ("CUP") method either in the transfer pricing study or during the assessment proceedings. The CIT(A) has erred in not appreciating that change in methodology for benchmarking ... shared in a 50:50 ratio. In the transfer pricing report submitted by the assessee, the assessee has adopted the Comparable Uncontrolled Price (CUP) method for determining the arm’s length price. However, the A.O. rejected the said method and proceeded to adopt Transactional Net Margin (TNMM) method. The stand

Ayatna Realty Pvt. Ltd., New Delhi vs. ACIT, Circle-3(2), New Delhi

In the result, the appeal of the Assesse in ITA No

ITA 1295/DEL/2024[2012-13]Status: DisposedITAT Delhi07 Apr 2025AY 2012-13

Bench: Shri Vikas Awasthy & Shri Manish Agarwalm/S Wrigley India Private Dcit, Limited Circle-27(2), 206, Okhla Industrial Vs. New Delhi. Estate, Phase Iii, New Delhi-110020 Pan-Aaacw1789P (Appellant) (Respondent) Joint Cit (Osd), M/S Wrigley India Private Circle-27(2), Limited, New Delhi Vs. 206, Okhla Industrial Estate, Phase Iii, New Delhi-110020 Pan-Aaacw1789P (Appellant) (Respondent)

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 ... debit balances of associated enterprises can be treated as 'international ITA No.1293 to1295/Del/2022 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

Ayatna Realty Pvt. Ltd., New Delhi vs. ACIT, Circle-3(2), New Delhi

In the result, the appeal of the Assesse in ITA No

ITA 1294/DEL/2024[2011-12]Status: DisposedITAT Delhi07 Apr 2025AY 2011-12

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

Deputy Commissioner of Income Tax, Nagpur vs. Avantha Holdings Limited, Chandrapur

ITA 354/NAG/2023[2012-13]Status: DisposedITAT Nagpur04 Apr 2025AY 2012-13

Bench: Shri V. Durga Rao & Shri K.M. Roy, Accountant, Member Avantha Holdings Ltd. Ballarpur Paper Mills S.O. Ballarpur 442 901 Pan – Aabcb6134E

For Appellant: Shri Kishore P. DewaniFor Respondent: Shri Sandipkumar Salunke

Section 251

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI K.M. ROY

Avantha Holdings Limited, New Delhi vs. A.C.I.T. Cir-5, Nagpur

ITA 45/NAG/2016[2011-12]Status: DisposedITAT Nagpur04 Apr 2025AY 2011-12

Bench: Shri V. Durga Rao & Shri K.M. Roy, Accountant, Member Avantha Holdings Ltd. Ballarpur Paper Mills S.O. Ballarpur 442 901 Pan – Aabcb6134E Appellant Dy. Commissioner Of Income Tax Circle-4, Nagpur Respondent V/S

For Appellant: Shri Kishore P. DewaniFor Respondent: Shri Sandipkumar Salunke

Section 251

guarantee and the guarantee was issued as However, the TPO held that as the AE had benefited, the ALP had to be computed on CUP method. The Tribunal in this case held that even after the amendment in Sec.928 by amending Explanation to Sec.92B, the corporate guarantee issued

Dy. C.I.T. Cir-.5, Nagpur vs. M/S Avantha Holdings Ltd., Chandrapur

ITA 248/NAG/2016[2011-12]Status: DisposedITAT Nagpur04 Apr 2025AY 2011-12

Bench: Shri V. Durga Rao & Shri K.M. Roy, Accountant, Member Avantha Holdings Ltd. Ballarpur Paper Mills S.O. Ballarpur 442 901 Pan – Aabcb6134E Appellant

For Appellant: Shri Kishore P. DewaniFor Respondent: Shri Sandipkumar Salunke

Section 251

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI K.M. ROY

DCIT, Cirlce- 1(1) (1), International Taxation, New Delhi vs. American Express Banking Corp. (India Branch), New Delhi

In the result, both appeals are allowed for statistical purposes as above

ITA 165/DEL/2019[2011-12]Status: DisposedITAT Delhi02 Apr 2025AY 2011-12

Bench: Shri Vikas Awasthy & Shri Avdhesh Kumar Mishra

grounds include sub-grounds also), has raised three issues: (i) Rejection of TP study [Ground No.3] (ii) Adoption of Comparable Uncontrolled Price (hereinafter, the ‘CUP’) method instead of TNMM for benchmarking international transactions [Ground Nos. 4 to 7] (iii) Issues relating to Indian & Foreign Associate Enterprises (hereinafter, the ‘AE’) [Ground ... technical support services TNMM 333,211 from AESEL UK 5. The assessee benchmarked its international transactions on TNMM; however, the Ld. TPO applied CUP method. Objections raised by the assessee were addressed by the Ld. TPO as evident from his order. The assessee raised the issue of multiyear data

Assistant Commissioner of Income Tax, Circle-5(1), Kolkata vs. Emami Limited, Kolkata

In the result, the appeal of the Revenue is dismissed

ITA 1330/KOL/2024[2017-18]Status: DisposedITAT Kolkata01 Apr 2025AY 2017-18

Bench: Shri Rajesh Kumar, Am & Shri Pradip Kumar Choubey, Jm

For Appellant: Shri Akkal Dudhewala, ARFor Respondent: Shri Ranu Biswas, DR

located at Kriparampur and Rajkot Unit The assessee while furnishing the annual audited accounts along with the relevant report on Form 3CEB adopted the CUP method for computing the arm's length price of the transactions between the eligible and non-eligible units. But subsequently during the course of proceedings

Royal Canin India Private Limited, Mumbai vs. Assistant Commissioner of Income-Tax, Circle 3(1)(1), Mumbai

In the result, appeal of the assessee Ground no

ITA 4546/MUM/2024[2020-21]Status: DisposedITAT Mumbai01 Apr 2025AY 2020-21

Bench: Shri Amarjit Singh & Shri Anikesh Banerjee

For Appellant: Shri K.M. Gupta a/w Shri AnmolFor Respondent: Shri Pankaj Kumar (CIT DR)

Section 143(3)Section 144BSection 144CSection 144C(13)

India Pvt. Ltd. vs. ACIT, Circle 10(1), Delhi. ITA No.2379/DEL/2022date of pronouncement 22/08/2024, wherein the ITAT-Delhi has stated as follows: "13. The CUP method compares the price charged for property or services transferred in a controlled transaction to the price charged for property or services transferred ... substituted for the price in the controlled transaction. The TPO cannot ordinarily benchmark a transaction value at ‘Nil' under the guise of CUP method on the basis of alleged absence of benefit derived by the assessee from such intra group transactions for two reasons; (i) CUP method cannot be invoked

Purpletalk India Private Limited, Hyderabad vs. Deputy Commissioner of Income Tax, Circle-9(1), Hyderabad

In the result, appeal of the assessee is partly

ITA 193/HYD/2021[2016-17]Status: DisposedITAT Hyderabad27 Mar 2025AY 2016-17

Bench: Shri Vijay Pal Rao & Shri Manjunatha G

For Appellant: CA PVSS PrasadFor Respondent: Shri B Bala Krishna, CIT-DR

Section 143(3)Section 2(24)(x)Section 234ASection 37(1)Section 92C

when the assessee-company adopted TNMM as most appropriate method, it is re-silent to minor 20 ITA.No.193/Hyd./2021 differences and unlike in CUP method, strict comparison of product is not necessary when TNMM is applied as the most appropriate method. Further, the learned DRP has given