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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

Omni Active Health Technologies Ltd., Mumbai vs. Addl/Jt./Dy/CIT/Asstt/ITO, National E-Assessmetnt Centre, Delhi

In the result, appeal of assessee is partly allowed

ITA 1224/MUM/2021[2016-17]Status: DisposedITAT Mumbai17 Oct 2022AY 2016-17

Bench: Shri Baskaran Br & Sh. Anikesh Banerjee

Section 143(3)Section 144C(13)Section 144C(5)Section 35Section 69CSection 92C(1)

goods amounting to Rs. 20,00,44,704/- but the TPO rejected the method of TP study of the assessee and converted to CUP method as MAM. Accordingly, adjustment made amounting to Rs. 20,00,44,704/- in related to international transaction of export of goods. Also, the addition ... appellant 22.63% and margin of the comparable (selected in TPSR for external TNMM on a corroborative basis): @11.97%. The TPO has taken the CUP method as MAM. The findings of the DRP, a similar to the earlier Assessment Year i.e. Assessment Year 2012-13 to 2014-15 and that they

Reliance Industries Ltd., Mumbai vs. Asstt. CIT-CC-3(4), Mumbai

In the result, appeal by the Revenue is dismissed

ITA 579/MUM/2021[2016-17]Status: DisposedITAT Mumbai14 Oct 2022AY 2016-17

Bench: Shri Pramod Kumar, Vice Preside & Shri Sandeep Singh Karhail

For Appellant: Shri Nimesh Vora a/wFor Respondent: Shri Chetan M. Kacha, Sr. AR
Section 115JSection 143Section 144C(3)Section 14ASection 250Section 250(6)Section 32Section 92CSection 92C(3)

assessee and at another place relying on the Hon'ble ITAT's decision for a y 2005 2006 to 2009-2010 wherein assessee followed CUP method, which again clearly shows that the CIT(A) has not verified the YSM adopted by the assessee? (Included in 7) 11.3 Whether

ACIT -3(4), Mumbai vs. Reliance Industries Ltd, Mumbai

In the result, appeal by the Revenue is dismissed

ITA 1438/MUM/2021[2016-17]Status: DisposedITAT Mumbai14 Oct 2022AY 2016-17

Bench: Shri Pramod Kumar, Vice Preside & Shri Sandeep Singh Karhail

For Appellant: Shri Nimesh Vora a/wFor Respondent: Shri Chetan M. Kacha, Sr. AR
Section 115JSection 143Section 144C(3)Section 14ASection 250Section 250(6)Section 32Section 92CSection 92C(3)

assessee and at another place relying on the Hon'ble ITAT's decision for a y 2005 2006 to 2009-2010 wherein assessee followed CUP method, which again clearly shows that the CIT(A) has not verified the YSM adopted by the assessee? (Included in 7) 11.3 Whether

Merck Specialities Pvt. Ltd, Mumbai vs. The Dy. Commissioner of Income Tax, Circle-7(2)(1), Mumbai

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

ITA 2056/MUM/2016[2011-12]Status: DisposedITAT Mumbai14 Oct 2022AY 2011-12

Bench: Shri Pramod Kumar & Shri Sandeep Singh Karhail

For Appellant: Ms. Aarti Vissanji a/wFor Respondent: Ms. Vatsalaa Jha
Section 143(3)Section 144C(1)Section 4Section 5Section 92CSection 92C(1)

what an independent enterprise would have paid for the same. In case TPO can demonstrate that the consideration for similar services, under the CUP method, is NIL, he can very well do so. That‟s not, however, his case. He only states that these services are not worth the amount ... benchmarking, the right course of action will be to follow CUP M/s. Merck Specialties Pvt. Ltd. ITA No.2056/Mum./2016 method because the value under CUP method will be best indicator of the value of these services. It was in this background that the TPO made certain adverse inferences against

Infiniti Wholesale Ltd ( Formerly Knwon As Woolwonths Wholesale (India) P.Ltd), Mumbai vs. Asst CIT Cir 8(3), Mumbai

In the result, appeal filed by the Appellant is partly allowed

ITA 7718/MUM/2012[2008-09]Status: DisposedITAT Mumbai13 Oct 2022AY 2008-09
For Appellant: Shri Nitesh JoshiFor Respondent: Michael Jerald
Section 143(3)Section 144CSection 144C(5)Section 92C

Delhi-Trib.) the Tribunal has held that the WDV of asset cannot be the determining factor to decide ALP under Comparable Uncontrolled Price (CUP) Method. Per contra, the Ld. Departmental Representative relied upon the orders passed by the TPO and DRP. 13. We have heard the rival submissions and perused ... that was used for the first time by the Appellant in India. Further, we note that the TPO has arrived at ALP by using CUP method by merely taking WDV of the Asset without considering any other factor. In the case of ACIT, Circle-I, Hosur Vs. Interpump Hydraulics India

ACIT, Cir- 14(1)(2), Mumbai vs. Wns Global Services Pvt. Ltd., Mumbai

In the result, appeal filed by the assessee is allowed

ITA 2474/MUM/2021[2013-14]Status: DisposedITAT Mumbai12 Oct 2022AY 2013-14

Bench: Shri Vikas Awasthy, Hon'Ble & Shri S. Rifaur Rahman, Hon'Ble

Section 14ASection 32(1)

methods as prescribed u/s. 92C of the IT Act has been followed. Whereas, the assessee has followed in its transfer pricing study as the CUP method as the most appropriate method by determining the value of the MSA on the basis of valuation report given by the independent valuer. Section

ACIT, Circle 14 (1)(2), Mumbai vs. Wns Global Services Pvt. Ltd., Mumbai

In the result, appeal filed by the assessee is allowed

ITA 2473/MUM/2021[2014-15]Status: DisposedITAT Mumbai12 Oct 2022AY 2014-15

Bench: Shri Vikas Awasthy, Hon'Ble & Shri S. Rifaur Rahman, Hon'Ble

Section 14ASection 32(1)

methods as prescribed u/s. 92C of the IT Act has been followed. Whereas, the assessee has followed in its transfer pricing study as the CUP method as the most appropriate method by determining the value of the MSA on the basis of valuation report given by the independent valuer. Section

Wipro Ge Healthcare Private Limited, Bangalore vs. Assistant Commissioner of Income Tax, Circle-7(1)(1), Bangalore

In the result, the appeal filed by the assessee in IT(TP)A No

ITA 703/BANG/2021[2012-13]Status: DisposedITAT Bangalore07 Oct 2022AY 2012-13

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri K.R. Pradeep &For Respondent: Shri Praveen Karanth, D.R
Section 143(3)Section 254Section 92C

lack of comparable transaction, ex-facie the companies cannot be considered as a comparable with the assessee. The adoption of CUP method is also not as per law in the absence of comparable transaction. Hence in the impugned case, there are no comparables identified as required ... above, the AO/TPO has not identified any comparable as required under law. Though the TPO has stated that he has followed the CUP method, there is no comparable transaction which has been brought on record. What is stated by the TPO as rate

Wipro Ge Healthcare Private Limited (Earlier Known As Ge Medical Systems India Private Limited), Bangalore vs. Deputy Commissioner of Income Tax, Circle-7(1)(1), Bangalore

In the result, the appeal filed by the assessee in IT(TP)A No

ITA 344/BANG/2021[2006-07]Status: DisposedITAT Bangalore07 Oct 2022AY 2006-07

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri K.R. Pradeep &For Respondent: Shri Praveen Karanth, D.R
Section 143(3)Section 254Section 92C

lack of comparable transaction, ex-facie the companies cannot be considered as a comparable with the assessee. The adoption of CUP method is also not as per law in the absence of comparable transaction. Hence in the impugned case, there are no comparables identified as required ... above, the AO/TPO has not identified any comparable as required under law. Though the TPO has stated that he has followed the CUP method, there is no comparable transaction which has been brought on record. What is stated by the TPO as rate

Asst CIT Cir 2(2)(1), Mumbai vs. Mahindra & Mahindra Ltd, Mumbai

In the result, appeal filed by the Revenue is dismissed

ITA 1739/MUM/2015[2010-11]Status: DisposedITAT Mumbai04 Oct 2022AY 2010-11

Bench: Shri M. Balaganesh () & Smt. Kavitha Rajagopal () Mahindra & Mahindra Limited Vs Asst.Commissioner Of Income-Tax, Corporation Taxation, P.K. Kurne Circle-2(2)(1), Mumbai Chowk, Worli, Mumbai-400 018 Aayakar Bhavan, M.K. Road Pan : Aaacm3025E Mumbai-400 020 Appellant Respondent Asst.Commissioner Of Income-Tax, Vs 020Mahindra & Mahindra Limited Circle-2(2)(1), Mumbai Corporation Taxation, P.K. Kurne Aayakar Bhavan, M.K. Road Chowk, Worli, Mumbai-400 018 Mumbai-400 Pan : Aaacm3025E Appellant Respondent

Section 143(3)Section 144CSection 14ASection 35Section 40Section 80I

being 75% of the technical services fees paid. 13.3.5. Before the Panel the assessee pointed out that the TPO had proposed application of CUP method but did not proceed with the same. The assessee reiterated its submissions made before the TPO and placed reliance on certain case laws placed before

Mahindra & Mahindra Limited, Mumbai vs. ACIT, Cir -2(2)(1), Mumbai

In the result, appeal filed by the Revenue is dismissed

ITA 1676/MUM/2015[2010-11]Status: DisposedITAT Mumbai04 Oct 2022AY 2010-11

Bench: Shri M. Balaganesh () & Smt. Kavitha Rajagopal () Mahindra & Mahindra Limited Vs Asst.Commissioner Of Income-Tax, Corporation Taxation, P.K. Kurne Circle-2(2)(1), Mumbai Chowk, Worli, Mumbai-400 018 Aayakar Bhavan, M.K. Road Pan : Aaacm3025E Mumbai-400 020 Appellant Respondent Asst.Commissioner Of Income-Tax, Vs 020Mahindra & Mahindra Limited Circle-2(2)(1), Mumbai Corporation Taxation, P.K. Kurne Aayakar Bhavan, M.K. Road Chowk, Worli, Mumbai-400 018 Mumbai-400 Pan : Aaacm3025E Appellant Respondent

Section 143(3)Section 144CSection 14ASection 35Section 40Section 80I

being 75% of the technical services fees paid. 13.3.5. Before the Panel the assessee pointed out that the TPO had proposed application of CUP method but did not proceed with the same. The assessee reiterated its submissions made before the TPO and placed reliance on certain case laws placed before

Ntt Data Fa Insurance Systems (India) Private Limited, Bangalore vs. The Deputy Commissioner of Income Tax, Circle-3(1)(1), Bangalore

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

ITA 261/BANG/2021[2016-17]Status: DisposedITAT Bangalore03 Oct 2022AY 2016-17

Bench: Shri N.V. Vasudevan & Shri Chandra Poojariit(Tp)A No.261/Bang/2021 Assessment Year: 2016-17

For Appellant: Shri T. Suryanarayana, Sr. A.RFor Respondent: Shri Sumer Singh Meena, D.R
Section 143(3)Section 92C

accordingly conducting fresh search for comparable companies. 5. The Hon'ble DRP/Ld. AO/Ld. TPO erred in rejecting the use of Comparable Uncontrolled Price (CUP') method for determining the arm's length price of the Appellants provision of software development services transactions 6. Without prejudice to the above grounds ... transaction under similar IT(TP)A No.261/Bang/2021 NTT Data FA Insurance Systems (India) Pvt. Ltd., Bangalore Page 7 of 37 circumstances. Thus, application of CUP method depends on the existence of similar uncontrolled services rendered by the taxpayer. Similar transactions can be an internal comparable or an external comparable

M/S. Mahindra Homes Pvt. Ltd, Mumbai vs. Addl/Jt/Dy/ACIT/ITO/NFAC, Mumbai

In the result, the appeal of the assessee for Asst Year 2016-17 is partly allowed for statistical purposes

ITA 2179/MUM/2021[2017-18]Status: DisposedITAT Mumbai30 Sept 2022AY 2017-18

Bench: Us That The Issues In Asst Year 2016-17 May Be Taken As The Lead Case & The Decision Rendered Thereon Would Apply With Equal Force For The Asst Year 2017-18 Also In View Of Identical Facts Except With Variance In Figures.

Section 143(3)Section 144C(13)Section 144C(5)Section 92C

engaged in real estate industry but in the Oil & Gas and Infrastructure industries as comparable to interest on CCDs under Comparable Uncontrolled Price ('CUP) method without appreciating that the four conditions for application of CUP are not satisfied in these cases i.e. specific characteristics of the products being compared, functions ... paper book) Analysis) published by the Reserve Bank of M/s. Mahindra Homes Pvt. Ltd., 6.3. It is not in dispute that Comparable Uncontrolled Price (CUP) method is MAM for the aforesaid international transaction. The assessee took comparable debt instruments for CUP and chose 14 comparables which are listed in page

Mahindra Homes P. Ltd., Mumbai vs. ITO, Range-7(2)(1), Mumbai

In the result, the appeal of the assessee for Asst Year 2016-17 is partly allowed for statistical purposes

ITA 1008/MUM/2021[2016-17]Status: DisposedITAT Mumbai30 Sept 2022AY 2016-17

Bench: Us That The Issues In Asst Year 2016-17 May Be Taken As The Lead Case & The Decision Rendered Thereon Would Apply With Equal Force For The Asst Year 2017-18 Also In View Of Identical Facts Except With Variance In Figures.

Section 143(3)Section 144C(13)Section 144C(5)Section 92C

engaged in real estate industry but in the Oil & Gas and Infrastructure industries as comparable to interest on CCDs under Comparable Uncontrolled Price ('CUP) method without appreciating that the four conditions for application of CUP are not satisfied in these cases i.e. specific characteristics of the products being compared, functions ... paper book) Analysis) published by the Reserve Bank of M/s. Mahindra Homes Pvt. Ltd., 6.3. It is not in dispute that Comparable Uncontrolled Price (CUP) method is MAM for the aforesaid international transaction. The assessee took comparable debt instruments for CUP and chose 14 comparables which are listed in page

M/S. India Medtronics Pvt.Ltd., Baroda vs. The Dy.CIT., Circle-1(2), Baroda

In the result, similarly the Assessee’s appeal is partly allowed

ITA 480/AHD/2011[2005-06]Status: DisposedITAT Mumbai30 Sept 2022AY 2005-06

Bench: Shri Amit Shukla & Shri Gagan Goyal

For Appellant: Sh. Rajan R. Vora with Sh. Nikhil TiwariFor Respondent: Dr. Yogesh Kamath/ Akhtar Hussain Ansari
Section 234BSection 271Section 274Section 92C

Bench and held that when the TPO has accepted TNMM as the most appropriate method for majority of export of AE, erred in applying CUP method for some of the transactions as two methods cannot be applied for one class of transactions. 71. We have heard the submissions made

M/S. Te Connectivity India Private Limited, Bangalore vs. Assistant Commissioner of Income Tax, Circle- 2, Ltu, Bangalore

In the result, all these appeals are partly allowed

ITA 2593/BANG/2019[2015-16]Status: DisposedITAT Bangalore23 Sept 2022AY 2015-16

Bench: Shri N. V. Vasudevan & Shri.Chandra Poojariit(Tp)A Nos. & Appellant Respondent Assessment Year 2593/Bang/2019 M/S. Te Connectivity India Private Limited, Acit, 2015-16 Te Park, 22B, Doddenakundi Corporation, Circle – 2, 2Nd Phase, Industrial Area, Large Taxpayer Unit, Whitefield Road, Bengaluru Bengaluru – 560 048. Pan: Aabct 7374 C 372/Bang/2021 -Do- -Do- 2016-17 200/Bang/2022 -Do- Dcit, Ltu, 2017-18 Circle – 2, Bengaluru. 716/Bang/2022 -Do- Acit, 2018-19 Circle – 7(1)(1), Bengaluru. Assessee By : Shri Sriram Seshadri, Advocate Revenue By : Shri Sumer Singh Meena, Cit(Dr)(Itat), Bengaluru. Date Of Hearing : 21.09.2022 Date Of Pronouncement : 23.09.2022 O R D E R Per N. V. Vasudevan:

For Appellant: Shri Sriram Seshadri, AdvocateFor Respondent: Shri Sumer Singh Meena, CIT(DR)(ITAT), Bengaluru
Section 143(3)Section 144BSection 92Section 92ASection 92F

most appropriate method, and disregarded the documentation/ evidences provided in respect of the transactions. Thereafter, the learned TPO proceeded to adopt Comparable Uncontrolled Price ("CUP") Method as the Most Appropriate Method, considered the ALP at NIL and consequently, treated the entire payment of IS charges as an adjustment ... however held that IS Charges shall be benchmarked separately and determined the corresponding ALP as Nil, upon allegedly applying the Comparable Uncontrolled Price (‘CUP’) Method. While the TPO rejected the assessee’s aggregation approach and considered IS Charges separately for the determination of ALP, the said charges were not excluded

Mega Soft Limited, Chennai vs. DCIT, Chennai

In the result, the appeal filed by the assessee is partly allowed

ITA 733/CHNY/2017[2012-13]Status: DisposedITAT Chennai21 Sept 2022AY 2012-13

Bench: Shri V. Durga Rao, Hon’Ble & Shri G. Manjunatha, Hon’Bleआयकर अपील सं./Ita No.733/Chny/2017 िनधा"रण वष" /Assessment Year: 2012-13 M/S.Mega Soft Ltd., V. The Dy. Commissioner – No.85, Kutchery Road, Of Income Tax, Mylapore, Chennai-600 004. Corporate Circle-4(1), Chennai. [Pan: Aabcm 8933 A] (अपीलाथ"/Appellant) (""यथ"/Respondent) : अपीलाथ" क" ओर से/ Appellant By Mr.M.Muraleedhara Reddy,Ca & Mr.Nagaprasad, Ca ""यथ" क" ओर से /Respondent By : Dr.S.Palani Kumar, Cit सुनवाई क" तारीख/Date Of Hearing : 28.07.2022 घोषणा क" तारीख /Date Of Pronouncement : 21.09.2022

For Respondent: Dr.S.Palani Kumar, CIT
Section 144(5)Section 144C(13)Section 92B

making upward adjustment in Arm's Length Price (ALP). M/s.Mega Soft Ltd. :: 2 :: 2. The AO/DRP erred in rejecting the Comparable Uncontrolled Price (CUP) method in the current year without passing a reasoned order, even when there is no change in facts of the case and ignoring the fact that ... choosing Transaction Net Margin Method (TNMM) as the most appropriate method without any reasoned order and choosing the same by default on rejection of CUP method? 5. The DRP erred in substituting TNMM over CUP method as the most appropriate method? 6. The DRP/AO failed to see that they cannot

Grundfos Pumps India Private Limited, Chennai vs. DCIT, Chennai

The appeal stands partly allowed

ITA 39/CHNY/2017[2012-13]Status: DisposedITAT Chennai15 Sept 2022AY 2012-13

Bench: Hon’Ble Shri V. Durga Rao & Hon’Ble Shri Manoj Kumar Aggarwal, Am

For Appellant: Shri S.P. Chidambaram (Advocate) – Ld. ARFor Respondent: Shri S. Palanikumar (CIT) – Ld. DR
Section 143(3)Section 144C(5)

separate payment towards it. The assessee has not adduced evidences for receipt of most of the services. Finally, rejecting TNMM method and applying CUP method, Ld. TPO determined Arm’s Length Price of aggregate fees of Rs.1003.58 Lacs as Rs.190.87 Lacs and proposed downward adjustment of Rs.812.71 Lacs. The fees

Grundfos Pumps India Private Limited, Chennai vs. DCIT Corporate Circle 2(1), Chennai

The appeal stands partly allowed

ITA 3088/CHNY/2017[2013-14]Status: DisposedITAT Chennai15 Sept 2022AY 2013-14

Bench: Hon’Ble Shri V. Durga Rao & Hon’Ble Shri Manoj Kumar Aggarwal, Am

For Appellant: Shri S.P. Chidambaram (Advocate) – Ld. ARFor Respondent: Shri S. Palanikumar (CIT) – Ld. DR
Section 143(3)Section 144C(5)

separate payment towards it. The assessee has not adduced evidences for receipt of most of the services. Finally, rejecting TNMM method and applying CUP method, Ld. TPO determined Arm’s Length Price of aggregate fees of Rs.1003.58 Lacs as Rs.190.87 Lacs and proposed downward adjustment of Rs.812.71 Lacs. The fees

Sri. Krishna Diamonds, Bangalore vs. Deputy Commissioner of Income Tax, Central Circle-2(2), Bangalore

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

ITA 232/BANG/2022[2014-15]Status: DisposedITAT Bangalore13 Sept 2022AY 2014-15

Bench: Shri George George K & Shri Laxmi Prasad Sahu

For Appellant: Shri Rohit Goutham, C.AFor Respondent: Dr. Manjunath Karkihalli, CIT (DR)
Section 234BSection 92B

Chapter X is bad in law. GROUNDS RELATED TP ADJUSTMENT 4. The lower income tax authorities have erred in: i. Not appreciating that the CUP Method is the most appropriate method in the facts and circumstances of the case. IT(TP)A No.232/Bang/2022 Page 3 of 24 ii. Rejecting ... analysis undertaken by the Appellant based on CUP method on unjustified reasons and performing fresh transfer pricing analysis; and iii. Not appreciating that TNMM is not the most appropriate method in the facts and circumstance of the case. .. 5. Without prejudice to the above and assuming without admitting that TNMM