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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

Sikka Ports & Terminals Ltd, Mumbai vs. DCIT 3(3) (1), Mumbai

In the result, the appeal of the assessee is allowed and the appeal of the Assessing Officer is dismissed

ITA 2022/MUM/2021[2013-14]Status: DisposedITAT Mumbai30 May 2022AY 2013-14
Section 143(3)Section 92BSection 92C

yield spread approach adopted by the assessee has been wrongly rejected, there is no need to deal with this clearly defective application of CUP method. No such inputs have been referred to, or relied upon, by the authorities below. 8. In view of these discussions, as also bearing in mind

Dy.Commissioner of Income Tax Circle-2(1)(1), Bangalore vs. M/S Axa Group Solutions Private Limited, Bangalore

In the result, the appeals of the revenue are dismissed

ITA 3279/BANG/2018[2011-12]Status: DisposedITAT Bangalore30 May 2022AY 2011-12

Bench: Shri N.V. Vasudevan, Vice Preseident & Shri Padmavathy S

For Appellant: Shri Sankar Ganesh, Jt.CIT(DR)(ITAT), BengaluruFor Respondent: Smt. Tanmayee Rajkumar, Advocate
Section 10ASection 115JSection 143(1)Section 14ASection 92C

transaction cannot be determined using TNMM and proceeded to calculate the ALP in respect of this transaction separately using CUP method. The TPO concluded that the assessee’s submissions are nothing more than a description of certain alleged services received by it from its AE and the documents filed

Dy.Commissioner of Income Tax Circle-1(1)(1), Bangalore vs. M/S Axa Group Solutions Private Limited, Bangalore

In the result, the appeals of the revenue are dismissed

ITA 555/BANG/2017[2011-12]Status: DisposedITAT Bangalore30 May 2022AY 2011-12

Bench: Shri N.V. Vasudevan, Vice Preseident & Shri Padmavathy S

For Appellant: Shri Sankar Ganesh, Jt.CIT(DR)(ITAT), BengaluruFor Respondent: Smt. Tanmayee Rajkumar, Advocate
Section 10ASection 115JSection 143(1)Section 14ASection 92C

transaction cannot be determined using TNMM and proceeded to calculate the ALP in respect of this transaction separately using CUP method. The TPO concluded that the assessee’s submissions are nothing more than a description of certain alleged services received by it from its AE and the documents filed

Gmr Highways Limited, Bengaluru vs. Deputy Commissioner of Income Tax, Circle- 3(1)(2), Bangalore

In the result, Ground no. 1 raised for A

ITA 495/BANG/2020[2016-17]Status: DisposedITAT Bangalore25 May 2022AY 2016-17

Bench: Shri. Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri Yogesh A Thar, CA
Section 14ASection 201Section 234B

rate of guarantee commission, it is noted that the arm's length price of guarantee commission was determined by the TPO by applying CUP method and the arithmetic mean of 1.5% of the guarantee commission charged by the HSBC Bank in the range of 0.15 to 3% was taken ... length price. The ld. CIT(A) upheld the CUP method applied by the TPO but adopted the rate of 0.25% of guarantee fee as arm's length price relying on the decision of French Court in the case of Societe Carrefour. The ld. D.R., at the time of hearing before

Gmr Highways Limited, Bengaluru vs. Deputy Commissioner of Income Tax, Circle 3(1)(2), Bangalore

In the result, Ground no. 1 raised for A

ITA 1643/BANG/2019[2015-16]Status: DisposedITAT Bangalore25 May 2022AY 2015-16

Bench: Shri. Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri Yogesh A Thar, CA
Section 14ASection 201Section 234B

rate of guarantee commission, it is noted that the arm's length price of guarantee commission was determined by the TPO by applying CUP method and the arithmetic mean of 1.5% of the guarantee commission charged by the HSBC Bank in the range of 0.15 to 3% was taken ... length price. The ld. CIT(A) upheld the CUP method applied by the TPO but adopted the rate of 0.25% of guarantee fee as arm's length price relying on the decision of French Court in the case of Societe Carrefour. The ld. D.R., at the time of hearing before

Assistant Commissioner of Income Tax, Central Circle-2(2), Bengaluru vs. M/S. Gmr Infrastructure Limited, Bengaluru

In the result, Ground no. 1 raised for A

ITA 1744/BANG/2017[2013-14]Status: DisposedITAT Bangalore25 May 2022AY 2013-14

Bench: Shri. Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri Yogesh A Thar, CA
Section 14ASection 201Section 234B

rate of guarantee commission, it is noted that the arm's length price of guarantee commission was determined by the TPO by applying CUP method and the arithmetic mean of 1.5% of the guarantee commission charged by the HSBC Bank in the range of 0.15 to 3% was taken ... length price. The ld. CIT(A) upheld the CUP method applied by the TPO but adopted the rate of 0.25% of guarantee fee as arm's length price relying on the decision of French Court in the case of Societe Carrefour. The ld. D.R., at the time of hearing before

Assistant Commissioner of Income Tax, Central Circle-2(2), Bangalore vs. M/S. Gmr Infrastructure Limited, Bengaluru

In the result, Ground no. 1 raised for A

ITA 1743/BANG/2017[2012-13]Status: DisposedITAT Bangalore25 May 2022AY 2012-13

Bench: Shri. Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri Yogesh A Thar, CA
Section 14ASection 201Section 234B

rate of guarantee commission, it is noted that the arm's length price of guarantee commission was determined by the TPO by applying CUP method and the arithmetic mean of 1.5% of the guarantee commission charged by the HSBC Bank in the range of 0.15 to 3% was taken ... length price. The ld. CIT(A) upheld the CUP method applied by the TPO but adopted the rate of 0.25% of guarantee fee as arm's length price relying on the decision of French Court in the case of Societe Carrefour. The ld. D.R., at the time of hearing before

Assistant Commissioner of Income Tax, Central Circle-2(2), Bengaluru vs. M/S. Gmr Infrastructure Limited, Bengaluru

In the result, Ground no. 1 raised for A

ITA 1742/BANG/2017[2011-12]Status: DisposedITAT Bangalore25 May 2022AY 2011-12

Bench: Shri. Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri Yogesh A Thar, CA
Section 14ASection 201Section 234B

rate of guarantee commission, it is noted that the arm's length price of guarantee commission was determined by the TPO by applying CUP method and the arithmetic mean of 1.5% of the guarantee commission charged by the HSBC Bank in the range of 0.15 to 3% was taken ... length price. The ld. CIT(A) upheld the CUP method applied by the TPO but adopted the rate of 0.25% of guarantee fee as arm's length price relying on the decision of French Court in the case of Societe Carrefour. The ld. D.R., at the time of hearing before

Assistant Commissioner of Income Tax Central Circle-2(2), Bangalore vs. M/S Gmr Infrastructure Ltd, Bangalore

In the result, Ground no. 1 raised for A

ITA 1741/BANG/2017[2010-11]Status: DisposedITAT Bangalore25 May 2022AY 2010-11

Bench: Shri. Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri Yogesh A Thar, CA
Section 14ASection 201Section 234B

rate of guarantee commission, it is noted that the arm's length price of guarantee commission was determined by the TPO by applying CUP method and the arithmetic mean of 1.5% of the guarantee commission charged by the HSBC Bank in the range of 0.15 to 3% was taken ... length price. The ld. CIT(A) upheld the CUP method applied by the TPO but adopted the rate of 0.25% of guarantee fee as arm's length price relying on the decision of French Court in the case of Societe Carrefour. The ld. D.R., at the time of hearing before

Gmr Infrastructure Ltd, Bangalore vs. Deputy Commissioner of Income Tax, Central Circle-2(2), Bangalore

In the result, Ground no. 1 raised for A

ITA 1705/BANG/2017[2010-11]Status: DisposedITAT Bangalore25 May 2022AY 2010-11

Bench: Shri. Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri Yogesh A Thar, CA
Section 14ASection 201Section 234B

rate of guarantee commission, it is noted that the arm's length price of guarantee commission was determined by the TPO by applying CUP method and the arithmetic mean of 1.5% of the guarantee commission charged by the HSBC Bank in the range of 0.15 to 3% was taken ... length price. The ld. CIT(A) upheld the CUP method applied by the TPO but adopted the rate of 0.25% of guarantee fee as arm's length price relying on the decision of French Court in the case of Societe Carrefour. The ld. D.R., at the time of hearing before

Gmr Infrastructure Ltd, Bangalore vs. Deputy Commissioner of Income Tax, Central Circle-2(2), Bangalore

In the result, Ground no. 1 raised for A

ITA 1622/BANG/2017[2011-12]Status: DisposedITAT Bangalore25 May 2022AY 2011-12

Bench: Shri. Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri Yogesh A Thar, CA
Section 14ASection 201Section 234B

rate of guarantee commission, it is noted that the arm's length price of guarantee commission was determined by the TPO by applying CUP method and the arithmetic mean of 1.5% of the guarantee commission charged by the HSBC Bank in the range of 0.15 to 3% was taken ... length price. The ld. CIT(A) upheld the CUP method applied by the TPO but adopted the rate of 0.25% of guarantee fee as arm's length price relying on the decision of French Court in the case of Societe Carrefour. The ld. D.R., at the time of hearing before

Gmr Infrastructure Ltd, Bangalore vs. Deputy Commissioner of Income Tax, Central Circle-2(2), Bangalore

In the result, Ground no. 1 raised for A

ITA 1600/BANG/2017[2013-14]Status: DisposedITAT Bangalore25 May 2022AY 2013-14

Bench: Shri. Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri Yogesh A Thar, CA
Section 14ASection 201Section 234B

rate of guarantee commission, it is noted that the arm's length price of guarantee commission was determined by the TPO by applying CUP method and the arithmetic mean of 1.5% of the guarantee commission charged by the HSBC Bank in the range of 0.15 to 3% was taken ... length price. The ld. CIT(A) upheld the CUP method applied by the TPO but adopted the rate of 0.25% of guarantee fee as arm's length price relying on the decision of French Court in the case of Societe Carrefour. The ld. D.R., at the time of hearing before

Gmr Infrastructure Limited, Bangalore vs. Deputy Commissioner of Income Tax, Central Circle-2(2), Bangalore

In the result, Ground no. 1 raised for A

ITA 1599/BANG/2017[2012-13]Status: DisposedITAT Bangalore25 May 2022AY 2012-13

Bench: Shri. Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri Yogesh A Thar, CA
Section 14ASection 201Section 234B

rate of guarantee commission, it is noted that the arm's length price of guarantee commission was determined by the TPO by applying CUP method and the arithmetic mean of 1.5% of the guarantee commission charged by the HSBC Bank in the range of 0.15 to 3% was taken ... length price. The ld. CIT(A) upheld the CUP method applied by the TPO but adopted the rate of 0.25% of guarantee fee as arm's length price relying on the decision of French Court in the case of Societe Carrefour. The ld. D.R., at the time of hearing before

M/S. Wipro Limited, Bangalore vs. Deputy Commissioner of Income Tax, Circle-7(1)(2), Bangalore

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

ITA 2556/BANG/2019[2015-16]Status: HeardITAT Bangalore23 May 2022AY 2015-16

Bench: Shri N.V. Vasudevan & Shri B.R. Baskaranit(Tp)A No.2556/Bang/2019 Assessment Year : 2015-16

For Appellant: Shri S. Ganesh, Sr. ARFor Respondent: Shri T. Roumuan Paite, D.R
Section 143(3)

value of corporate guarantee so provided. According to the assessee, it has bench marked this transaction by applying Comparable Uncontrolled Price (CUP) method. However, the TPO was not satisfied with the rate of 0.50% p.a. The TPO discussed about the nature of guarantees provided in the normal course and also ... provided by it to its associated enterprises. It is also stated that the above said rate of 0.50% was determined by the assessee under CUP method described in transfer pricing report. We notice that the TPO has adopted the rate of 3% without furnishing any basis or comparables though

Tesco Bangalore Private Limited, Bangalore vs. Deputy Commissioner of Income Tax, Circle-7(1)(1), Bangalore

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

ITA 602/BANG/2016[2011-12]Status: PendingITAT Bangalore23 May 2022AY 2011-12

Bench: Shri N. V. Vasudevan & Shri B. R. Baskaranit(Tp)A No.602/Bang/2016 Assessment Year : 2011-12 M/S. Tesco Bengaluru Private Limited, Dcit, Vs. (Earlier Known As Tesco Hindustan Service Circle – 7(1)(1), Centre Private Limited), Bengaluru. No.81 & 82, Tesco H S C, Epip Area, White Field, Bengaluru-560 066. Pan : Aabct 8915 B Appellant Respondent Assessee By : Shri. T. Suryanarayana, Advocate Revenue By : Shri. Sumer Singh Meena, Cit(Dr)(Itat), Bengaluru. Date Of Hearing : 22.02.2022 Date Of Pronouncement : 23.05.2022 O R D E R Per B. R. Baskaran:

For Appellant: Shri. T. Suryanarayana, AdvocateFor Respondent: Shri. Sumer Singh Meena, CIT(DR)(ITAT), Bengaluru
Section 10ASection 143(3)Section 234BSection 234C

taxpayer company has paid /Re-imbursed IT(TP)A No.602/Bang/2016 Page 4 of 11 the said amount the transaction is treated as NIL by applying CUP method. Hence the arms length price for payment towards intra group services Rs.2,29,82,094/- would be treated as NIL or to the extent ... shown that the benefit actually derived from such payment by applying CUP method.” The Ld DRP upheld the transfer pricing adjustment made by the TPO. 5.1 The Ld A.R submitted that the TPO as well as Ld DRP has not properly understood the nature of transaction with regard to reimbursement

Dow Chemicals International Pvt Ltd. As Successor of Rohm and Haas (India) Pvt Ltd, Mumbai vs. ITO 14 (1)(3), Mumbai

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

ITA 7936/MUM/2019[2015-16]Status: DisposedITAT Mumbai19 May 2022AY 2015-16

Bench: Shri Om Prakash Kant () & Shri Rahul Chaudhary () Assessment Year: 2015-16 Dow Chemical International Private Income Tax Officer-14(1)(3), Limited As Successor Of Rohm & Hass Room No. 458, 4Th Floor, (India) Private Limited, Vs. Aayakar Bhavan, M.K. Road, Godrej It Park-P2, 1St Floor Block B, 02, Mumbai-400020. Lbs Road, Godrej Business District, Pirojshanagar, Vikhroli (West), Mumbai-400079. Pan No. Aaacr 2855 F Appellant Respondent

For Appellant: Mr. Rajan R. Vora/For Respondent: Dr. Yogesh Kamat, CIT-DR
Section 92C

ground Nos. 10 and 11, the assessee has raised the issue of not considering direct method in the form of Comparable Uncontrolled Price (CUP) method in view of availability of data Dow Chemical International Private Limited as successor of Rohm and Hass 11 (India) Private Limited using “TIPS database ... export of finished goods. Similarly in ground No. 15 to 17, the assessee has raised the issue of not considering CUP method in view of availability of “TIPS” data of import of raw materials. 9. Before, we proceed to adjudicate the issue in dispute, it is relevant to discuss

DCIT-5(1)(2), Mumbai vs. M/S Dharmanandan Diamonds Pvt Ltd., Mumbai

In the result, the appeal of the Revenue is dismissed

ITA 4232/MUM/2019[2013-14]Status: DisposedITAT Mumbai19 May 2022AY 2013-14

Bench: Shri Om Prakash Kant () & Shri Rahul Chaudhary () Assessment Year: 2013-14 Dy. Commissioner Of Income- M/S Dharmanandan Tax, Circle 5(1)(2), Diamonds Pvt. Ltd., R.No. 568, Aayakar Bhavan, Vs. Fc-7081-82, M.K. Road, Bharat Diamond Bourse, Mumbai-400020. Bkc, Bandra (East), Mumbai-400051. Pan No. Aaccd 6676 J Appellant Respondent Revenue By : Dr. Yogesh Kamat, Cit-Dr Assessee By : Rashmikant C. Modi/ Ketki Rajeshirke, Ars Date Of Hearing : 23/03/2022 Date Of Pronouncement : 19/05/2022

For Appellant: Rashmikant C. Modi/For Respondent: Dr. Yogesh Kamat, CIT-DR
Section 271GSection 92Section 92DSection 92D(3)

furnished various information and documents as required by Rule 10D and submitted segment-wise PLI during the penalty proceedings. The appellant further submitted that CUP method could not be applied as each invoice of sale to AE and Non-AEs include different types of goods sold for different price ... peculiar character of the goods sold, the appellant did not consider the CUP method as the most appropriate method. It is also mentioned that the department M/s Dharmanandan Diamonds Pvt. Ltd. 6 accepted TNMM Method as the most appropriate method and no adjustments were made in the preceding years

Aquity Solutions India Pvt. Ltd. (Earlier Known As Mmodel Global Services Ltd.), Mumbai vs. DCIT - 15 (2)(2), Mumbai

In the result, appeal of the assessee is partly allowed in the terms aforesaid

ITA 1161/MUM/2019[2005-06]Status: DisposedITAT Mumbai13 May 2022AY 2005-06

Bench: Vikas Awasthy & Shri Prashant Maharishi

For Appellant: Ms.Karishma R. Phatarphekar with S/Shri Harsh Shah/ Paras Savla/For Respondent: Ms. Vatsalaa Jha

case and in law, the learned AO / TPO under the directions of the Hon'ble DRP have erred in rejecting Comparable Uncontrolled Price ('CUP') method and adopting Transactional Net Margin Method (TNMM') as the most appropriate method to benchmark the international transaction of the Appellant” 12. The issue before ... have been exhaustively dealt with by the CIT(A) in his order. It is a fact on record that the assessee has adopted the CUP method for computing the Arms’ Length Price for the international transaction entered into by it with its AE for the medical transcription service rendered

Cbay Systems (India) Private Limited, Bangalore vs. ITO, Bangalore

In the result, appeal of the assessee is partly allowed in the terms aforesaid

ITA 1351/BANG/2011[2007-08]Status: DisposedITAT Mumbai13 May 2022AY 2007-08

Bench: Vikas Awasthy & Shri Prashant Maharishi

For Appellant: Ms.Karishma R. Phatarphekar with S/Shri Harsh Shah/ Paras Savla/For Respondent: Ms. Vatsalaa Jha

case and in law, the learned AO / TPO under the directions of the Hon'ble DRP have erred in rejecting Comparable Uncontrolled Price ('CUP') method and adopting Transactional Net Margin Method (TNMM') as the most appropriate method to benchmark the international transaction of the Appellant” 12. The issue before ... have been exhaustively dealt with by the CIT(A) in his order. It is a fact on record that the assessee has adopted the CUP method for computing the Arms’ Length Price for the international transaction entered into by it with its AE for the medical transcription service rendered

Frost & Sullivan (India) P.Ltd, Chennai vs. DCIT (OSD) 8(1), Mumbai

In the result, the appeal filed by the assessee is treated as allowed and the appeal of the revenue is dismissed

ITA 1124/MUM/2014[2009-10]Status: DisposedITAT Mumbai11 May 2022AY 2009-10
Section 143(3)Section 144C(13)Section 36(1)(vii)Section 40

assessee benchmarked international transactions separately for CP division and GIC division. The Company claimed before the Transfer Pricing Officer (TPO) that it has adopted CUP method for benchmarking CP division. However, the TPO noticed that transfer pricing study has been done under ‘Transaction net margin’ method only, though ... claimed that that international transactions of CP division was bench marked under CUP method. The TPO rejected transfer pricing study of the assessee and proceeded to determine arms length price of the international transaction by aggregating transactions of both divisions cited above. The TPO selected sixteen comparables and determined arithmetical