“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

DCIT, Madurai vs. The Ramco Cements Ltd., Rajapalayam

The appeals of the revenue stand dismissed

ITA 1274/CHNY/2016[2010-11]Status: DisposedITAT Chennai03 Jul 2024AY 2010-11

Bench: Hon’Ble Shri Manoj Kumar Aggarwal, Am & Hon’Ble Shri Manu Kumar Giri, Jm 1. आयकरअपील सं./ Ita No.957/Chny/2016 (िनधा;रण वष; / Assessment Year: 2010-11) & 2. आयकरअपील सं./ Ita No.958/Chny/2016 (िनधा;रण वष; / Assessment Year: 2012-13) & 3. आयकरअपील सं./ Ita No.2196/Chny/2019 (िनधा;रण वष; / Assessment Year: 2014-15) The Ramco Cements Limited Dcit बनाम (Formerly Known As Madras Cements Ltd) Corporate Circle -2, Ramamandiram, / Vs. Madurai. Rajapalayam-626 117. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aabcm-8375-L (अपीलाथ"/Appellant) : (" थ" / Respondent) & 4. आयकरअपील सं./ Ita No.1274/Chny/2016 (िनधा;रण वष; / Assessment Year: 2010-11) & 5. आयकरअपील सं./ Ita No.1363/Chny/2016 (िनधा;रण वष; / Assessment Year: 2012-13) & 6. आयकरअपील सं./ Ita No.1897/Chny/2017 (िनधा;रणवष; / Assessment Year: 2013-14) Dcit The Ramco Cements Limited बनाम/ Corporate Circle -2, (Formerly Known As Madras Cements Ltd) Ramamandiram, Vs. Madurai. Rajapalayam-626 117. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aabcm-8375-L (अपीलाथ"/Appellant) : (" थ" / Respondent)

For Appellant: Shri J.Prabhakar (CA) &For Respondent: Mrs. Jothi Lakshmi Nayak (CIT)-Ld.DR

Alathiyur Thermal Plant of the assessee for captive consumption. This unit was enjoying exemption u/s 80-IA. The assessee benchmarked the same using CUP method. The electricity generated by the unit was transferred at Rs.6.52 per unit on the basis of which deduction u/s 80IA was claimed by the assessee ... sugar industry. The TPO comparison of tariff rates by regulatory commission was not derived from actual transaction which was a primary requirement under CUP method and hence it was not a valid comparison. The Ld. TPO did not question the CUP method adopted by the assessee. The Hon’ble Bombay

The Dy.Commissioner of Income Tax, Circle-1(1)(2), Ahmedabad vs. M/S. Cadila Pharmaceuticals Ltd., Ahmedabad

In the result, Revenue’s appeal is allowed in part

ITA 74/AHD/2020[2010-11]Status: DisposedITAT Ahmedabad01 Jul 2024AY 2010-11

Bench: Shri TR Senthil Kumar (Judicial Member), Shri Narendra Prasad Sinha (Accountant Member)

For Appellant: Parin Shah, A.RsFor Respondent: Dr. Darsi Suman Ratnam, CIT

Section 143(3)Section 35

that the loan in that case was given out of own funds of the assessee. 4.5 There is no dispute to the fact that CUP method is the most appropriate method to ascertain ALP of the international transaction of interest received on loan. Where the transaction was of lending money

Cadila Pharmaceuticals Ltd., Ahmedabad vs. The Asst. Commissioner of Income Tax, Circle-1(1)(2), Ahmedabad

In the result, Revenue’s appeal is allowed in part

ITA 53/AHD/2020[2010-11]Status: DisposedITAT Ahmedabad01 Jul 2024AY 2010-11

Bench: Shri TR Senthil Kumar (Judicial Member), Shri Narendra Prasad Sinha (Accountant Member)

For Appellant: Parin Shah, A.RsFor Respondent: Dr. Darsi Suman Ratnam, CIT

Section 143(3)Section 35

DCIT (It) 2(2)(2), Mumbai vs. The Hongkong and Shanghai Banking Corp Ltd, Mumbai

In the result, the captioned appeals by the assessee are partly

ITA 7309/MUM/2016[2008-09]Status: DisposedITAT Mumbai28 Jun 2024AY 2008-09

Bench: Shri Narendra Kumar Billaiya, Hon'Ble

interest earned by the assessee from HSBC USA, department of the assessee has already been incorporated above. The assessee has benchmarked the transaction using CUP method thereby various Indian banks have applied similar services from HSBC USA which have also been incorporated above. Assessee stated that "Best Efforts" are based

The Hongkong and Shanghai Banking Corporation Ltd, Mumbai vs. Addl DIT (It) -3, Mumbai

In the result, the captioned appeals by the assessee are partly allowed and that of the revenue are partly allowed

ITA 7010/MUM/2016[2008-09]Status: DisposedITAT Mumbai28 Jun 2024AY 2008-09

Bench: Shri Narendra Kumar Billaiya, Hon'Ble & Shri Raj Kumar Chauhan, Hon'Ble

DCIT (It) 2(2)(2), Mumbai vs. The Hongkong and Shanghai Banking Corp Ltd, Mumbai

In the result, the captioned appeals by the assessee are partly allowed and that of the revenue are partly allowed

ITA 4788/MUM/2016[2007-08]Status: DisposedITAT Mumbai28 Jun 2024AY 2007-08

Bench: Shri Narendra Kumar Billaiya, Hon'Ble & Shri Raj Kumar Chauhan, Hon'Ble

DCIT (It) 2(2)(2), Mumbai vs. The Hongkong and Shanghai Banking Corp Ltd, Mumbai

In the result, the captioned appeals by the assessee are partly

ITA 4787/MUM/2016[2006-07]Status: DisposedITAT Mumbai28 Jun 2024AY 2006-07

Bench: Shri Narendra Kumar Billaiya, Hon'Ble

The Hong Kong & Shanghai Banking Corporation Ltd., Mumbai vs. Addl. Director of Income Tax (International Taxation) - Range -3, Mumbai

In the result, the captioned appeals by the assessee are partly

ITA 4767/MUM/2016[2007-08]Status: DisposedITAT Mumbai28 Jun 2024AY 2007-08

Bench: Shri Narendra Kumar Billaiya, Hon'Ble

The Hong Kong & Shanghai Banking Corporation Ltd., Mumbai vs. Addl. Director of Income Tax (International Taxation) - Range -3, Mumbai

In the result, the captioned appeals by the assessee are partly

ITA 4766/MUM/2016[2006-07]Status: DisposedITAT Mumbai28 Jun 2024AY 2006-07

Bench: Shri Narendra Kumar Billaiya, Hon'Ble

Addi CIT Spl. Range- 6, New Delhi vs. Maharashtra Seamless Ltd., New Delhi

In the result, LIBOR + 300 points be charged and corporate guaranteed commission be charged @ 0

ITA 7700/DEL/2019[2013-14]Status: DisposedITAT Delhi27 Jun 2024AY 2013-14

Bench: Dr. B. R. R. Kumar, Sh. Vimal Kumar

For Appellant: Sh. Ved Jain, Adv. &For Respondent: Sh. Prakshit Singh, Sr. DR

income filed by the assessee. 4. The above International transaction of interest received of Rs. 19,88,755/-was benchmarked by the assessee adopting CUP method, being the appropriate method. The assessee has considered JPSPL, its Associated Enterprise as the internal comparable because JPSPL (AE) has also taken the loan

M/S Centrient Pharmaceuticals India Private Limited, Nawanshahar vs. Additinal/Joint/Deputy/Asstt. C.It, ITO, Neac, Delhi

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

ITA 102/CHANDI/2021[2016-17]Status: DisposedITAT Chandigarh18 Jun 2024AY 2016-17

Bench: SHRI. AAKASH DEEP JAIN (Vice President), SHRI. VIKRAM SINGH YADAV (Accountant Member)

For Appellant: Shri Darpan Kirpalani, AdvocateFor Respondent: Shri Rohit Sharma, CIT DR

Section 144

aforesaid international transaction by applying Transactional Net Margin method as the most appropriate method which was rejected by the TPO wherein he applied CUP method to benchmark the said international transaction and determined the arm’s length price of the transaction at NIL and made an addition

ACIT 4(1), Mumbai vs. M/S Bofa Securities India Limited (Earlier Known As Dsp Merrill Lynch Ltd ), Mumbai

In the result appeals of the assessee are allowed and appeals of the Revenue are dismissed

ITA 6175/MUM/2010[2003-04]Status: DisposedITAT Mumbai10 Jun 2024AY 2003-04

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI S RIFAUR RAHMAN (Accountant Member)

Section 143(3)

Merrill Lynch International U.K (MLI) at Merrill Lynch Capital Market Espana (MLCME). The ld. TPO has rejected the TNMM method and applied CUP method after comparing the weighted average brokerage commission rates charged by assessee to its AE, i.e., Merrill Lynch International UK with the weighted brokerage rate charged ... FIIs. Thus, there is internal CUP available. 16. At the time of hearing, we had asked the Ld. Sr. Counsel, if CUP method is to be applied for benchmarking the transaction then why not weighted average of rates charged at Top 10 third party institutional clients should be used

M/S Bofa Securities India Limited (Formerly Known As A Dsp Merill Lynch Ltd ), Mumbai vs. ACIT RG 4(1), Mumbai

ITA 5864/MUM/2010[2003-04]Status: DisposedITAT Mumbai10 Jun 2024AY 2003-04

Section 143(3)

DCIT 4(1), Mumbai vs. M/S Bofa Securities India Limited (Earlier Known As M/S Dsp Merrill Lynch Limited ), Mumbai

In the result appeals of the assessee are allowed and appeals of the Revenue are dismissed

ITA 5425/MUM/2010[2002-03]Status: DisposedITAT Mumbai10 Jun 2024AY 2002-03

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI S RIFAUR RAHMAN (Accountant Member)

Section 143(3)

Bofa Securities India Limited (Formerly Known As Dsp Merill Lynch Ltd, Mumbai vs. ACIT RG 4(1), Mumbai

In the result appeals of the assessee are allowed and appeals of the Revenue are dismissed

ITA 5416/MUM/2010[2002-03]Status: DisposedITAT Mumbai10 Jun 2024AY 2002-03

Section 143(3)

M/S Kantar Gdc India Pvt. Ltd. (Formerly Tns India Pvt Ltd), Hyderabad vs. Dy. Commissioner of Income Tax, Circle-2(2), Hyderabad

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

ITA 2261/HYD/2017[2013-14]Status: HeardITAT Hyderabad03 Jun 2024AY 2013-14

Bench: Shri Mahavir Singh & Shri Manjunatha, G.आ.अपी.सं /Ita No.2261/Hyd/2017 (िनधा"रण वष"/Assessment Year: 2013-14) M/S. Kantar Gdc India (P) Vs. Dy. C. I. T. Ltd (Formerly Tns India (P) Circle 2(2) Ltd, Hyderabad Hyderabad Pan:Aabcn2278F (Appellant) (Respondent) िनधा""रती "ारा/Assessee By: Advocate Harpreet Singh Ajmani राज" व "ारा/Revenue By:: Shri Shiva Sewak, Cit(Dr) सुनवाई की तारीख/Date Of Hearing: 15/05/2024 घोषणा की तारीख/Pronouncement: 03/06/2024 आदेश/Order

For Appellant: Advocate Harpreet Singh AjmaniFor Respondent: : Shri Shiva Sewak, CIT(DR)

Section 143(3)Section 144C(5)Section 271(1)(c)

assessee has benchmarked different services under different methods like TNMM. For global/regional management allocation fee and payment of trade mark, the appellant had adopted CUP method and claimed that the transaction with its AEs are at ALP. The learned TPO after considering the relevant international transactions and also taking note

The Dy. CIT., Circle-4, Ahmedabad vs. M/S. Invida India Pvt.Ltd. ( Now Known As Menarini India Pvt. Ltd.), Ahmedabad

Appeal of the Revenue is dismissed

ITA 1316/AHD/2015[2010-11]Status: DisposedITAT Ahmedabad30 May 2024AY 2010-11

Bench: Ms. Suchitra Kamble & Shri Waseem Ahmedassessment Year: 2010-11

For Appellant: Shri Ankit Jain, Sr. DRFor Respondent: Shri Tushar Hemani, Sr. Advocate &

Section 142(1)Section 143(1)Section 143(2)

assessee’s contentions relating to payment of royalty that the same has been benchmarked by the assessee by applying Comparable Uncontrolled Price (CUP) method in the Form 3CEB report. The Assessing Officer observed from the same that for the purpose of benchmarking this payment the assessee has considered CUP ... royalty, management fees and IT allocation cost account, the Ld. DR submitted that the payment of royalty was benchmarked by the assessee by applying CUP method for which the assessee relied upon the RBI’s approval. The Ld. DR submitted that for the purpose of determination of ALP, the assessee

DCIT Circle-10(1), New Delhi vs. Htc India Pvt Ltd, Gurgaon

In the result, the appeal of the Revenue is dismissed

ITA 1785/DEL/2020[2011-12]Status: DisposedITAT Delhi30 May 2024AY 2011-12

Bench: Sh. Kul Bharatdr. B. R. R. Kumar

For Appellant: NoneFor Respondent: Sh. Vivek Kr. Upadhyay, Sr. DR

Section 271(1)Section 271(1)(c)Section 92BSection 92C

entity level, the TPO proposed transfer pricing adjustment amounting to Rs.3.31 crore by determining Nil ALP of the three international transactions under the CUP method by basing his conclusion on the fact that the assessee did not avail any services inasmuch as no benefit was derived ... same, but appreciation and consideration is from a different point of view, i.e. bona fides and due diligence. 17. Respondent-assessee had applied CUP method to compute the arms length price of the international transactions with the associated enterprises. Revenue has not disputed that the CUP method was the preferred

Takenaka India Pvt Ltd, Gurgaon vs. JCIT (OSD) Circle-25(1), Gurgaon

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

ITA 5581/DEL/2019[2012-13]Status: DisposedITAT Delhi29 May 2024AY 2012-13

Bench: Shri Kul Bharat & Shri Pradip Kumar Kedia[Assessment Year : 2012-13] M/S. Takenaka India Pvt.Ltd., Vs Cit (A)-44, First Floor, Tower-C, Vatika First New Delhi. India Place, Mehrauli Gurgaon Road, Gurgaon, Haryana-122002. Pan-Aadct6143P Appellant Respondent Appellant By Shri Ashutosh Mohan Rastogi & Shri Dhruv Seth, Adv. Respondent By Shri Gaurav Bansal, Sr. Dr Date Of Hearing 15.04.2024 Date Of Pronouncement 29.05.2024 Order Per Kul Bharat, Jm : The Present Appeal Filed By The Assessee Is Directed Against The Order Passed By Commissioner Of Income Tax (Appeals) (“Cit(A)”)-44, New Delhi Dated 24.04.2019 For The Assessment Year 2012-13. 2. The Assessee Has Assailed The Correctness Of The Order On Following Grounds:-

Section 143(2)Section 143(3)Section 250(6)Section 271(1)(c)Section 92CSection 92C(3)Section 92D

facts and in the circumstances of the case and in law, the Ld.TPO/AO and subsequently Ld. CIT (A) have erred in substituting CUP Method with TNMM. 5. Without prejudice to above grounds, the Ld.TPO/AO and subsequently Ld. CIT (A) have erred in including Jai Hind Projects Limited ... making the impugned additions. He submitted that the AO grossly erred in applying the Transactional Net Margin Method (“TNMM”) instead of Comparable Uncontrolled Price (“CUP”) method for computation of ALP. Further, he contended that the AO has accepted CUP method for Assessment Year (“AY”) 2011-12 and also

Tata Chemicals Ltd, Mumbai vs. DCIT - 2 (3)(1), Mumbai

ITA 3093/MUM/2023[2019-20]Status: DisposedITAT Mumbai28 May 2024AY 2019-20

For Appellant: Shri Nitesh Joshi a/w SamkitFor Respondent: Shri K.C. Selvamani, CIT-DR

Section 143(3)Section 144CSection 144C(5)Section 80Section 80ISection 92Section 92B

Torrent Power Ltd. - Generation, Ahmedabad as a lone suitable comparable instance for the purpose of application of the "Comparable Uncontrolled Price Method" ('CUP method") as prescribed in the Income-tax Rules, 1962. 1.2. in not appreciating that the level of market of the comparable transaction adopted by the Ld. AD/Ld