“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, Mumbai vs. Mahindra Homes Pvt Ltd., Mumbai

In the result, the appeal of the Revenue is allowed for statistical purposes

ITA 1212/MUM/2025[2015-16]Status: DisposedITAT Mumbai15 Sept 2025AY 2015-16

Bench: Shri Om Prakash Kant () & Shri Raj Kumar Chauhan ()

For Appellant: Mr. S. Sriram a/w Mr. Samyak LohadeFor Respondent: Mr. Pankaj Kumar, CIT-DR

Section 142(1)Section 143(2)

Rs.48,53,19,310/stands deleted, and consequently ground no. 1 is allowed." 7.1 In the TP study the assessee had taken the comparables in CUP method related to database used NSE, BSE and NSDL database margin of the appellant is 17.65% gross or 15% net of tax system whereas ... applied the same rate of interest both in foreign AE and domestic AE. No other uncontrolled comparable is determined during the TP study under CUP method. The application of CUP method as MAM without taking care the risk adjustment in terms of rule 10B(1)(e)(iii) of the Rules

Brightcom Group Limited, Hyderabad vs. Asst. Commissioner of Income Tax, Circle-1(2), Hyderabad

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

ITA 1747/HYD/2019[2015-16]Status: DisposedITAT Hyderabad10 Sept 2025AY 2015-16

Bench: Shri Vijay Pal Rao & Shri Madhusudan Sawdia

For Appellant: Shri P. Murali Mohan Rao, C.AFor Respondent: Dr. Narendra Kumar Naik

Section 115JSection 143(2)Section 143(3)Section 144C(5)Section 14ASection 37Section 92C

comes to 26.07%, whereas the PLI in respect of non-AE digital marketing services comes to 18.76%. Accordingly, if the Comparable Uncontrolled Price (“CUP”) method is applied, the PLI of services rendered to AE is more than that of non-AE transactions, and no transfer pricing adjustment is warranted ... services (“SDS”), which are functionally dissimilar. It was thus pleaded that the Ld. AO/TPO be directed to accept the segmental audit report and the CUP method applied by the assessee. In support of their contention, the assessee relied on the decision of this Tribunal in the cases of Cura Technologies

Deputy Commissioner of Income Tax, Circle 2(1)(1), Vadodara, Aaykar Bhawan vs. Gujarat Narmada Valley Fertilizer & Chemicals Limited, Narmadanagar

In the result, appeal filed by the Revenue is dismissed

ITA 970/AHD/2025[2015-16]Status: DisposedITAT Ahmedabad03 Sept 2025AY 2015-16

For Appellant: Shri Sher Singh, CIT.DRFor Respondent: Shri Vishal Kalra. AR

Section 250Section 80I

provision laid down under Rule 10B(2)(b) of the I.T. Rules, 1962 and hence the same is not a comparable transaction under CUP method. 2(iv) On the facts and circumstances of the case and in law, the Ld.CIT(A) erred in accepting the ALP of the assessee determined

Dhara Developers, Shree Vishnudhara Homes vs. Income Tax Officer, Ward 4(2)(1), Income Tax Office, Vejalpur

In the result, appeal filed by the assessee is dismissed

ITA 1833/AHD/2024[2015-2016]Status: DisposedITAT Ahmedabad03 Sept 2025AY 2015-2016

Bench: SHRI SANJAY GARG (Judicial Member), SMT. ANNAPURNA GUPTA (Accountant Member)

For Appellant: NoneFor Respondent: Shri Sher Singh, CIT. DR

Section 250Section 92C

transaction was 15.10.2015 and the impugned year being A.Y. 2015-16, he accordingly held that the transaction was not comparable for the purpose of CUP method prescribed in Rule10B(1)(a) of the IT Rules. He accordingly recomputed ALP of the impugned transaction applying rate of Rs.9659/- per Sq.meters

Garware Fulflex India Pvt Ltd, Mumbai vs. DCIT, Circle 1(1)(1), Mumbai

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

ITA 6751/MUM/2024[2021-22]Status: DisposedITAT Mumbai28 Aug 2025AY 2021-22

Bench: Smt. Beena Pillai () & Shri Om Prakash Kant ()

Section 143(3)Section 144C(13)Section 153

foreign AE to enable it to obtain loan but did not charge any commission for the same. The Ld. TPO applied the CUP method using information obtained from independent bank under authority provided u/s 133(6) of the Act and determined and determined the arm's length commission

M/S Takata India Pvt. Ltd., New Delhi vs. DCIT, New Delhi

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

ITA 6835/DEL/2015[2011-12]Status: DisposedITAT Delhi28 Aug 2025AY 2011-12

Bench: Shri Prakash Chand Yadav & Manish Agarwalassessment Year: 2011-12 Takata India Pvt Ltd., Vs. Dcit, Circle 25(1), (Now Joyson Anand Abhishek New Delhi Safety Systems Pvt Ltd.,) Plot No.20, Sector-5, Imt Manesar, Gurugram (Haryana)-122050 Pan/Gir No. Aacct 7200 N (Appellant) .. ( Respondent)

For Appellant: NoneFor Respondent: Shri S.K.Jadhav, CIT (DR)

applied TNMM is the most appropriate method for determining the Arm’s Length Price. However, Ld.DRP as well as Transfer Pricing Officer applied CUP method as most appropriate method. We observe that the Ld.DRP has not at all dealt with this issue in judicious manner. The Ld.DRP has not even

ACIT-8(1)(1), Mumbai vs. Reliance Life Sciences Pvt. Ltd., Navi Mumbai

ITA 2978/MUM/2025[2016-17]Status: DisposedITAT Mumbai25 Aug 2025AY 2016-17

Bench: Smt. Beena Pillai & Shri Girish Agrawal

For Appellant: Shri Nimesh Vora & Ms. Moksha Mehta, CAsFor Respondent: Shri Asif Karmali, Sr. DR

Section 143(3)Section 35Section 92F

price within the meaning of section 92C(3)(a) r.w.r. 10B(1)(a). He thus, proceeded to determine arm's length interest by following CUP method. For this, he referred to the Bloomberg database to identify comparable loans. Based on the data obtained from Bloomberg, he found that the prevailing ... party with similar financial strength as that of the associated enterprise. 7. Assessee contented that ld. TPO while conducting the benchmarking exercise by adopting CUP method has only considered the criteria of loans taken in same currency, same financial year in which loan is given, loans pertaining to the country

Novateur Electrical and Digital Systems Pvt Ltd., Mumbai vs. Asst CIT 10(3)(1), Mumbai

In the result, appeal of the assessee is partly allowed and that by the Revenue is dismissed

ITA 944/MUM/2020[2012-13]Status: DisposedITAT Mumbai25 Aug 2025AY 2012-13

Bench: Smt. Beena Pillai & Shri Girish Agrawalassessment Year: 2012-13

For Appellant: Shri Nikhil Tiwari and Shri Lekh Mehta, CAsFor Respondent: Shri Pankaj Kumar, CIT DR

Section 143(3)Section 32Section 92CSection 92C(2)

length price for certain finished goods, without appreciating that goods sold to third party and product sold to AE are not comparable and thereby CUP method fails as CUP method requires high degree of product comparability: f) Without prejudice to the above, even if CUP method is applied, erred ... excise, freight expenses, admin and finance expenses, warehousing expenses and other dissimilarities to make the CUP data comparable; g) erred in not rejecting the CUP method on the ground that accurate adjustment on account of difference in products sold to AE and products sold to third party cannot be reasonably

Dy CIT 10(3)(1), Mumbai vs. M/S Novateur Electricals and Digital Systems Pvt Ltd., Mumbai

In the result, appeal of the assessee is partly allowed and that by the Revenue is dismissed

ITA 1189/MUM/2020[2012-13]Status: DisposedITAT Mumbai25 Aug 2025AY 2012-13

Bench: Smt. Beena Pillai & Shri Girish Agrawalassessment Year: 2012-13

For Appellant: Shri Nikhil Tiwari and Shri Lekh Mehta, CAsFor Respondent: Shri Pankaj Kumar, CIT DR

Section 143(3)Section 32Section 92CSection 92C(2)

Goldman Sachs (India) Finance Private Limited, Mumbai vs. Assessment Unit, Income-Tax Department, New Delhi

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

ITA 6766/MUM/2024[AY 2021-22]Status: DisposedITAT Mumbai22 Aug 2025

Bench: Shri Narendra Kumar Billaiyashri Sandeep Singh Karhail

For Appellant: Shri Madhur AgrawalFor Respondent: Ms. Neena Jeph, CIT-DR

Section 142(1)Section 143(1)Section 143(1)(a)Section 143(2)Section 143(3)Section 144C(1)Section 144C(5)Section 253Section 32Section 37(1)

Rules, 1962 (Rules'), wherein, the learned AO/ TPO has erred in: 4.1.1 Rejecting the benchmarking analysis undertaken by the Appellant using Comparable Uncontrolled Price (CUP) method; and 4.1.2 Adopting 'Other method' as the most appropriate method for determining the ALP for the international transaction in relation to payment of interest ... CCDs issued during the financial year 2019- 20 to its associated enterprises. The assessee benchmarked this transaction by adopting the Comparable Uncontrolled Price (“CUP") Method as the most appropriate method and considered the information published by Bombay Stock Exchange (“BSE”), National Stock Exchange (“NSE”), and National Securities Depository Ltd. (“NSDL

Mondelez India Foods Pvt. Ltd. (Formerly Known As Cadbury India Ltd.), Mumbai vs. ACIT, Range 5 (1)(2), Mumbai

In the result, appeal of the assessee company is allowed/partly

ITA 7269/MUM/2019[2015-16]Status: DisposedITAT Mumbai22 Aug 2025AY 2015-16

Bench: Shri Amit Shukla & Shri Arun Khodpiaआयकर अपील सं. / Ita No.7269/Mum/2019 निर्धारण वर्ष / Assessment Year :2015-16 M/S Mondelez India Foods Private Limited (Formerly Known As Cadbury India Limited), Mondelez House, Unit No.2001, 20Th Floor Tower-3 (Wing C) India Bulls Finance Centre), Parel, Mumbai-400 013 Pan : Aaac0460H ........अपीलार्थी / Appellant बनाम / V/S. The Assistant Commissioner Of Income-Tax, Range-5(1)(2), Mumbai, Aayakar Bhavan, M.K. Road Mumbai-400 020 ......प्रत्यर्थी / Respondent Assessee By : Shri J.D. Mistri, Sr. Advocate Shri Hiten Chande Revenue By : Shri Pankaj Kumar, Cit-Dr सुनवाई की तारीख / Date Of Hearing :18.08.2025 घोषणा की तारीख / Date Of Pronouncement : 22.08.2025

For Appellant: Shri J.D. Mistri, Sr. AdvocateFor Respondent: Shri Pankaj Kumar, CIT-DR

Section 115JSection 143(3)Section 144C(1)Section 144C(5)Section 14ASection 234C

accordingly, it was submitted that the transaction is within arm's length price. The TPO rejected the submissions of the assessee and applied CUP method where he has applied the amount / rate of Rs.6,250 to be the arm's length compensation for the services rendered. The TPO made

Assistant Commissioner of Income Tax Ltu Circle 1 Chennai, Chennai vs. Carborundum Universal Limited, Chennai

ITA 48/CHNY/2025[2017-18]Status: DisposedITAT Chennai20 Aug 2025AY 2017-18

Bench: Hon’Ble Shri Manu Kumar Giri & Shri Hon’Ble Amitabh Shuklaआयकर अपील सं./ It(Tp)A Nos.2, 3 & 4/Chny/2025 िनधा@रण वष@ /Assessment Years: 2012-13, 2013-14 & 2017-18

For Appellant: Shri R.Vijayaraghavan, AdvocateFor Respondent: Shri P.K.Senthil Kumar, Addl. CIT

given to AE are amenable to adjustment under the Transfer pricing. The CIT(A) also found that the TPO on the basis of external CUP method found that arithmetic mean of the rates of bank guarantee was 2.01% but added in the case of the Assessee a conservative figure

Indian Metals and Ferro Alloys Ltd, Bhubaneswar vs. DCIT, Circle-1(1), Bhubaneswar

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

ITA 506/CTK/2024[2021-22]Status: DisposedITAT Cuttack19 Aug 2025AY 2021-22

Bench: Shri Duvvuru Rl Reddy(Kz) & Shri Rakesh Mishra

Section 143(1)Section 143(2)Section 143(3)Section 144C(5)Section 234BSection 234CSection 270ASection 92CSection 92D

High Court, it has been held as under: “35. In the present case, the Assessee had computed the ALP by adopting the CUP method as provided in Rule 10B(1)(a) of the Rules. The TPO had also accepted it as the most appropriate method in the facts ... present case. Thus, there is no dispute that CUP method is required to be used for determining the ALP and the market value for the purposes of Section 80IA of the Act. 36. As is apparent from Sub-clause (i) of Clause (a) of Rule 10B(1) of the Rules

Assistant Commissioner of Income Tax, Circle-1, Tiruppur vs. Prabhu Spinning Mills Private Limited, Tiruppur

ITA 435/CHNY/2025[2017-18]Status: DisposedITAT Chennai13 Aug 2025AY 2017-18

Bench: Shri George George K & Shri S.R. Raghunathaआयकर अपील सं./Ita Nos.:433 & 435/Chny/2025 निर्धारण वर्ष / Assessment Year: 2018-19 & 2017-18 Acit, Circle -1 121, Adarns Plaza, 60, Feet Road, Tiruppur - 641 602. (अपीलार्थी/Appellant) Vs. Prabhu Spining Mills Private Limited, No. 207 – 86, Mangalam Road, Karuvampalayam, Tiruppur – 641 604. Tamil Nadu. [Pan:Aabcp-0750-E] (प्रत्यर्थी/Respondent) अपीलार्थी की ओर से/Appellant By : Shri. Arv Sreenivasan, Cit प्रत्यर्थी की ओर से/Respondent By : Shri. T. Banusekar, Advocate. सुनवाई की तारीख/Date Of Hearing : 16.07.2025 घोषणा की तारीख/Date Of Pronouncement : 13.08.2025 Per S. R. Raghunatha, Am : आदेश /Order These Two Appeals Filed By The Revenue Are Directed Against Separate Orders Passed By The Learned Commissioner Of Income Tax (Appeals), Chennai-16 (In Short “Id.Cit(A)”) Dated 04.10.2024 For Assessment Years 2017-18 & 2018-19 Respectively. Since Facts Are Identical & Issues Are Common, For The Sake Of Convenience, These Appeals By The Revenue Are Being Heard Together & Disposed Of By This Consolidated Order. 2. The Appeal Of The Revenue For The Assessment Year 2017-18 Is Taken As The Lead Appeal For Adjudication Of The Issues Involved. The Only Issue Which Has Been Raised In Appeal By The Revenue Is With Regard To Determination Of Quantum Of Deduction U/S.80-Ia Of The Income Tax Act, 1961 (In Short "The Act"). :-2-:

For Appellant: Shri. ARV Sreenivasan, CITFor Respondent: Shri. T. Banusekar, Advocate

Section 143(3)Section 80Section 92C

receipt of Rule 10B of the Income Tax Rules 1962. Furthermore, in the present case, assessee itself had benchmarked the transactions by following the CUP method under Section 92C of the Act and therefore, also, this judgment is not applicable to the facts of the case.” 11. The Ld.DR based ... unit, while simultaneously captively consuming power at a rate of ₹7.85 per unit. In light of these concurrent transactions, the Tribunal applied the internal CUP method, holding that the rate of third-party sales constituted a more direct and reliable benchmark than any externally regulated tariffs. 14. In stark contrast

Assistant Commissioner of Income Tax, Tiruppur vs. Prabhu Spinning Mills Private Limited, Tiruppur

In the result all the grounds raised by the revenue for the A

ITA 433/CHNY/2025[2018-19]Status: DisposedITAT Chennai13 Aug 2025AY 2018-19

Bench: Shri George George K & Shri S.R. Raghunathaआयकर अपील सं./Ita Nos.:433 & 435/Chny/2025 धनिाजरण वर्ज / Assessment Year: 2018-19 & 2017-18 Acit, Circle -1 Prabhu Spining Mills Private 121, Adarns Plaza, Vs. Limited, 60, Feet Road, No. 207 – 86, Mangalam Road, Tiruppur – 641 602. Karuvampalayam, Tiruppur – 641 604. Tamil Nadu. (अपीलाथी/Appellant) [Pan:Aabcp-0750-E] (प्रत्यथी/Respondent) अपीलाथी की ओर से/Appellant By : Shri. Arv Sreenivasan, Cit प्रत्यथी की ओर से/Respondent By : Shri. T. Banusekar, Advocate. सुनवाई की तारीख/Date Of Hearing : 16.07.2025 घोर्णा की तारीख/Date Of Pronouncement : 13.08.2025

For Appellant: Shri. ARV Sreenivasan, CITFor Respondent: Shri. T. Banusekar, Advocate

Section 143(3)Section 80Section 92C

M/S Geodis Overseas Pvt. Ltd., Gurgaon vs. DCIT, New Delhi

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

ITA 3196/DEL/2017[2004-05]Status: DisposedITAT Delhi13 Aug 2025AY 2004-05

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

M/S Geodis Overseas Pvt. Ltd., Gurgaon vs. DCIT, New Delhi

ITA 3195/DEL/2017[2003-04]Status: DisposedITAT Delhi13 Aug 2025AY 2003-04

Bench: Shri S Rifaur Rahman & Shri Vimal Kumar

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

Sony India Private Limited, New Delhi vs. ACIT, Circle-22(2), Delhi

ITA 2052/DEL/2022[2018-19]Status: DisposedITAT Delhi08 Aug 2025AY 2018-19

Bench: Shri Anubhav Sharma & Shri Manish Agarwal

For Appellant: Shri Nageshwar Rao, Advocate &For Respondent: Shri S.K. Jhadav, CIT-DR

Section 143(3)

considering arm's length price of international transaction of payment of royalty as NIL claiming same to be application of Comparable Uncontrolled Price (“CUP”) method. Without prejudice payment towards royalty was considered as cost for TNNM. Transfer Pricing Adjustment in respect of transaction of provision of advisory services 19. Impugned

Sony India Private Limited, New Delhi vs. ACIT, Circle-22(2), Delhi

ITA 1688/DEL/2022[2017-18]Status: DisposedITAT Delhi08 Aug 2025AY 2017-18

Bench: Shri Anubhav Sharma & Shri Manish Agarwal

For Appellant: Shri Nageshwar Rao, Advocate &For Respondent: Shri S.K. Jhadav, CIT-DR

Section 143(3)

Sony India Pvt. Ltd., New Delhi vs. ACIT Circle-24(1), New Delhi

ITA 9080/DEL/2019[2015-16]Status: DisposedITAT Delhi08 Aug 2025AY 2015-16

Bench: Shri Anubhav Sharma & Shri Manish Agarwal

For Respondent: Shri S.K. Jhadav, CIT-DR

Section 143(3)