“resale price method”

Transfer PricingSection 92CSection 92C129 judgments

The decision most relied on for resale price method is Asstt. CIT v. MSS India (P.) Ltd. (32 SOT 132), cited in 26 judgments on BharatTax.

Leading authorities on resale price method

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.

Principal Commissioner of Income-tax-6 v. Matrix Cellular International Services (P.) Ltd.

90 Taxmann.com 54 · 2018 · High Court

citing judgments

The Resale Price Method (RPM) is the most appropriate method for determining the arm's length price of a distributor who does not add significant value to the goods purchased.

16. In Nokia India (P) Ltd. v. Dy. CIT

153 ITD 508 · 2015 · High Court

citing judgments

Incurring high advertisement and marketing expenses does not preclude the use of the Resale Price Method (RPM) for determining the Arm's Length Price (ALP) under transfer pricing provisions. The ratio of related party transactions (RPTs) calculation requires careful consideration of the numerator and denominator to accurately reflect transactions with associated enterprises.

Bose Corporation India (P) Ltd. v. ACIT

53 Taxmann.com 432 · 2015 · High Court

citing judgments

The Resale Price Method (RPM) is considered the most appropriate method for determining the arm's length price (ALP) in cases involving distribution or marketing activities where goods are purchased from associated enterprises and sold to unrelated parties without further processing.

(1) Horiba India Pvt. Ltd. v. OCIT

81 Taxmann.com 209 · 2017 · High Court

citing judgments

When an assessee is a pure distributor and sells goods purchased from associated enterprises without value addition, the Resale Price Method (RPM) is the most appropriate method for benchmarking the international transactions over the Transactional Net Margin Method (TNMM).

Judgments citing resale price method

Novell Software Development (India) Private Limited, Bangalore vs. ITO, Bangalore

In the result, appeal filed by assessee stands allowed and appeal filed by the revenue stands dismissed

ITA 319/BANG/2016[2011-12]Status: DisposedITAT Bangalore29 Apr 2022AY 2011-12

Bench: Shri. Chandra Poojari & Smt. Beena Pillaiit(Tp)A No. 280/Bang/2016 Assessment Year : 2011-12 M/S. Micro Focus Software India Pvt. Ltd. (Earlier Known As Novell Software Development The Income Tax (India) Pvt. Ltd.), Officer, Bagmane Tech Park ‘D’ Ward – 4 (1)(3), Block, Bangalore. ‘Laurel’ 65/2, Vs. C V Raman Nagar, Byrasandra, Bangalore – 560 093. Pan: Aaacn6992K Appellant Respondent & It(Tp)A No. 319/Bang/2016 Assessment Year : 2011-12 (By Assessee) : Smt. Tanmayee Rajkumar, Assessee By Advocate : Dr. Manjunath Karkihalli, Cit Revenue By (Dr) Date Of Hearing : 03-03-2022 Date Of Pronouncement : 29-04-2022 Order Per Beena Pillaipresent Cross Appeals Has Been Filed By Revenue As Well As Assessee Against Order Dated 29.12.2015 Passed By Ld.Ito Ward 5(1)(1)

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

Duplication and Re-Distribution Services a) That the AO/TPO erred in law and on facts in rejecting the Appellant's application of the Resale Price Method ('RPM') as the Most Appropriate Method (`MAM') in its TP Study for determination of the arm’s length price of the above international transaction ... ground raised by assesee stands allowed. 15. Ground No.5 (a): That the lower authorities erred in rejecting the Assessee’s application of the Resale Price Method (‘RPM’ for short) as most appropriate method in its TP study for determination of ALP in the SDR services segment and consequently erred

ITO Ward - 5(1)(1), Bangalore vs. M/S Novell Software Development (India) Pvt. Ltd., Bangalore

In the result, appeal filed by assessee stands allowed and appeal filed by the revenue stands dismissed

ITA 280/BANG/2016[2011-12]Status: DisposedITAT Bangalore29 Apr 2022AY 2011-12

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

M/S. Steer Engineering Pvt. Ltd., Bengaluru vs. Deputy Commissioner of Income-Tax, Circle-6(1)(2), Bengaluru

In the result, appeal of the Assessee is partly allowed

ITA 2071/BANG/2018[2012-13]Status: DisposedITAT Bangalore27 Apr 2022AY 2012-13

Bench: Shri N. V. Vasudevan & Ms. S. Padmavathyassessment Year : 2012-13 M/S. Steer Engineering Private Limited, Vs. Dcit, No.290, 4Th Main, 4Th Phase, Circle – 6(1)(2), Peenya Industrial Area, Nagawara, Bengaluru. Bengaluru – 560 058. Pan : Aabcs 8840 E Appellant Respondent Assessee By : Shri. Narendra Jain, Advocate Revenue By : Mrs. Susan D. George, Cit(Dr)(Itat), Bengaluru. Date Of Hearing : 18.04.2022 Date Of Pronouncement : 27.04.2022

For Appellant: Shri. Narendra Jain, AdvocateFor Respondent: Mrs. Susan D. George, CIT(DR)(ITAT), Bengaluru

Section 144CSection 92(1)Section 92ASection 92A(1)Section 92CSection 92C(2)Section 92F

functions performed by such persons or such other relevant factors as the Board may prescribed, namely :— (a) comparable uncontrolled price method (CUP);(b) resale price method;(RSPM)(c) cost plus method;(CPM)(d) profit split method;(PSM)(e) transactional net margin method(TNMM);(f) such other method

Accc 30, Mumbai vs. United Shippers Ltd, Mumbai

In the result, appeal filed by the assessee is partly allowed and appeal filed by the AO is dismissed

ITA 3036/MUM/2012[2007-08]Status: DisposedITAT Mumbai26 Apr 2022AY 2007-08

Bench: Shri Prashant Maharishi, Am & Shri Sandeep Singh Karhail, Jm The Asst. Commissioner Of United Shippers Ltd. United India Bldg, 2N D Floor, Sir Income-Tax, Circle-30 R.No. 403, 4Th Floor, P.M. Road , Vs. Aayakar Bhavan, M.K. Marg, Fort, Mumbai-400 020 Mumbai-400 001 (Appellant) (Respondent) Pan No. Aaacu0764C The Asst. Commissioner Of United Shippers Ltd. Income-Tax, Circle-30 United India Bldg, 2N D Floor, Sir R.No. 403, 4Th Floor, P.M. Road , Vs. Ayakar Bhavan, Fort, M.K. Marg, Mumbai-400 001 Mumbai-400 020 (Appellant) (Respondent)

For Appellant: Shri Madhur Agarwal, AdvocateFor Respondent: Shri Ms. Vatsalaa Jha, CIT DR

Section 14ASection 92Section 92CSection 92C(3)

pricing officer has merely made an adjustment on account of the corporate guarantee charges. For this year, the assessee has also accepted the resale price method as the most appropriate method. He further referred to page number 249 of the paper book, which is international transaction for assessment year ... assessee has benchmarked above transaction adopting the resale price method as the most appropriate method for sipping services, which has been accepted by the learned transfer-pricing officer. 022. In view of this, he submitted that the benchmarking methodology adopted by the assessee deserves to be accepted. 023. Countering arguments

B. Barun Medical (India) Private Limited, Mumbai vs. DCIT-9(2)(1), Mumbai

In the result, appeal of the assessee is partly allowed

ITA 7417/MUM/2018[2014-15]Status: DisposedITAT Mumbai20 Apr 2022AY 2014-15

Bench: Us.

Section 143(3)Section 144C(5)

other expenses as well as recovery of expenses with its AE. For its trading activity as a whole, the assessee has selected Resale Price Method (RPM) as the 'Most Appropriate Method' (MAM) to benchmark the transactions. For its assembly activity, the assessee has selected TNMM ... selected 'Other Method' to benchmark the transactions. 2.3 The assessee benchmarked the international transactions in respect of its trading activity using the Resale Price Method. The Profit Level Indicator (PLI) used was Gross Profit/Operating Income. The gross profit margin of the assessee from its trading activity was determined

Epson India Private Limited, Ulsoor vs. Deputy Commissioner of Income Tax, International Taxation, Circle-1(2), Bangalore

In the result, the appeal of the assessee is allowed

ITA 205/BANG/2021[2015-16]Status: DisposedITAT Bangalore18 Apr 2022AY 2015-16

Bench: Shri N V Vasudevan & Ms. Padmavathy S

For Appellant: Shri. Padam Chand Khincha, CAFor Respondent: Dr. Manjunath Karkihalli, CIT DR

Section 143Section 147Section 148Section 92Section 92(1)Section 92B(1)

Business Support Services. The Business Support Services Segment was accepted as at Arm’s lengyh by the TPO. The assessee has chosen Resale Price Method (RPM) as the most appropriate method for the Trading (Distribution) segment and arrived at the average mean of gross profits margin(GPM) of 7 comparables

M/S Lenovo India Private Limited, Bangalore vs. Assistant Commissioner of Income Tax Circle-4(1)(1), Bangalore

In the result, the appeal filed by assessee stands allowed

ITA 2833/BANG/2017[2013-14]Status: DisposedITAT Bangalore21 Mar 2022AY 2013-14

For Appellant: Shri Padamchand Khincha, CA

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

Appellant to its AE. 3.2.3 The Hon’ble DRP and learned AO / TPO have erred in stating that while the Appellant has used Resale Price Method (“RPM”) to benchmark its international transactions, the gross margins do not reflect the expenditure relating to the additional function carried out by the Appellant

DCIT - 11(3)(1), Mumbai vs. Toto India Industries Pvt. Ltd., Mumbai

In the result, the appeal by the Revenue is dismissed in terms of our aforesaid findings

ITA 6226/MUM/2019[2012-13]Status: DisposedITAT Mumbai11 Mar 2022AY 2012-13

Bench: Shri Prashant Maharishi & Shri Sandeep Singh Karhail

For Appellant: Shri Dhanesh BafnaFor Respondent: Ms. Vatsalaa Jha (CIT)

Section 250Section 251(1)(a)

with respect to its international transaction pertaining to „purchase of finished goods‟. Accordingly, the assessee benchmarked its aforesaid international transaction by applying the Resale Price Method (“RPM”) as the most appropriate method. Further, the payment of trade mark license fees and technical fees relating to trading activity carried

DCIT 3(1)(1), Mumbai vs. Diesel Fashion India Reliance Pvt. Ltd., Mumbai

Accordingly it is to be dismissed as such

ITA 2931/MUM/2019[2013-14]Status: DisposedITAT Mumbai04 Mar 2022AY 2013-14

Section 143(3)

erred in rejecting the Transactional Net Margin Method (TNMM) adopted by the AO/TPO as the Most Appropriate Method and in directing adoption of Resale Price Method (RPM) as done by the Assessee? 3. Whether on the facts and in the circumstances of the case ... High Court in the case of M/s. L'Oreal India Pot. Ltd. (ITA No.1046 of 2012) dated 07.11.2014 and upholding Resale Price Method (RPM) as the Most Appropriate Method (MAM), thus ignoring that the assessee is a full-fledged high risk distributor performing marketing and warranty functions as well

Kirloskar Toyota Textile Machinery Private Limited, Bangalore vs. DCIT, Bangalore

In the result, the appeal by the assessee is treated as partly allowed

ITA 197/BANG/2015[2009-10]Status: DisposedITAT Bangalore28 Feb 2022AY 2009-10

Bench: Shri N. V. Vasudevan & Shri B. R. Baskaranit(Tp)A No.197/Bang/2015 Assessment Year : 2009-10 M/S. Toyota Industries Engine India Pvt. Ltd., Vs. Dcit, (Formerly Known As Kirloskar Toyota Textile Circle – 11(5), Machinery Pvt. Ltd.,) Bengaluru. Plot No.09, 2Nd Phase, Jigani Industrial Area, Bengaluru – 560 105. Pan : Aaack 7425 Q Assessee Respondent Assessee By : Shri. Ajit Tolani, Ca Revenue By : Shri. Sumer Singh Meena, Cit(Dr)(Itat), Bengaluru Date Of Hearing : 24.02.2022 Date Of Pronouncement : 28.02.2022 O R D E R Per N V Vasudevan

For Appellant: Shri. Ajit Tolani, CAFor Respondent: Shri. Sumer Singh Meena, CIT(DR)(ITAT), Bengaluru

assessee carried out the economic analysis, primarily to identify companies that are broadly similar to the FAR of the assessee. Assessee applied Resale Price Method (RPM) and computed assessee’s Margin at 15,39% and Comparables Margin at 18%. However, during the assessment proceedings, TPO held that RPM cannot ... reseller 1101'N 110i odd substantially to the value of the product. In contrast, it mot, be more difficult to use the resale price method to arrive o arm's length price where, before resale, the goods are further processed or incorporated into a more complicated product so that their

Kellogg India P.Ltd, Mumbai vs. Assistant Commissioner of Income Tax 15(2)(1), Mumbai

In the result, the appeal of the assessee is allowed

ITA 7342/MUM/2018[2014-15]Status: DisposedITAT Mumbai16 Feb 2022AY 2014-15

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

prejudice basis that even if the Indian entity is to be selected as the tested party, the MAM to be adopted would be Resale Price Method (RPM) as the assessee had merely imported the finished goods from its AE and sold the same to the third parties in India without

Luxottica India Eyewear Pvt. Ltd., Gurgaon vs. ACIT, Circle- 15(2), New Delhi

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

ITA 8259/DEL/2018[2014-15]Status: DisposedITAT Delhi27 Jan 2022AY 2014-15

Bench: Sh. Saktwit Dey & Sh. N. K. Billaiya

Section 143Section 92B

margin earned by the Appellant with adjusted net margins of comparable companies ("intensity adjustment'), without giving any reasons for rejecting the Resale Price Method ("RPM") used by the Appellant which has been upheld as the most appropriate method for determination of arm's length price of import of finished goods ... incurrence of excessive AMP expenditure is considered as a separate international transaction, the same has been suitably benchmarked under application of Resale Price Method (“RPM”) carried out by the Assessee. (G) The assessee submitted that the matching of the intensities is not a prescribed comparability condition under

Olympus Medical Systems India Pvt. Ltd., Gurugram vs. ACIT, Circle- 3(1), Gurugram

In the result, appeal of the assessee in ITA No

ITA 873/DEL/2021[2016-17]Status: HeardITAT Delhi13 Jan 2022AY 2016-17

Bench: Shri Saktijit Dey & Shri N.K. Billaiya

For Appellant: Shri Nageshwar Rao, AdvFor Respondent: Shri Mahesh Shah, CIT-DR

Section 143(3)Section 144B

same to apply aggregation approach using TNMM. 13. Ld. AO / TPO / DRP erred in not benchmarking AMP using the adjusted Resale Price Method (‘RPM’). 14. Ld. AO / TPO / DRP proposes adjustment to the value of AMP expenses; direct selling expenses should be excluded from the value of such AMP expenses

M/S. Randox Laboratories India Private Limited, Bangalore vs. Assistant Commissioner of Income Tax, Circle- 5(1)(1), Bangalore

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

ITA 2576/BANG/2019[2015-16]Status: DisposedITAT Bangalore04 Jan 2022AY 2015-16

Bench: Shri N. V. Vasudevan & Shri B. R. Baskaranit(Tp)A No.2576/Bang/2019 Assessment Year : 2015-16 M/S. Randox Laboratories India Vs. The Asst.Commissioner Of Private Limited, Income Tax, Plot No.191-195 & 246-250, Circle 5(1)(1), Bommasandra-Jigani Link Road, Bengaluru. Kiadb Industrial Area, Bengaluru – 560 105. Pan: Aadcr 0074 K Assessee Respondent

For Appellant: Shri S. Krishna Upadhyaya, CAFor Respondent: Shri Sumeer Singh Meena, CIT(DR-OSD), ITAT, Bangalore

Section 143(3)Section 144CSection 92Section 92ASection 92CSection 92F

most appropriate method (MAM) for determination of ALP, whether it is Transaction Net Margin Method (TNMM) as contended by the revenue or the Resale Price Method (RPM) as contended by the Assessee. 6. It was the plea of the Assessee that it purchases reagents, analyzers and spares from its Associated ... order. As the assessee is a trader, without value addition to the goods, we find force in the submissions of the assessee that resale price method is the most appropriate method for determining the ALV with respect to AE transaction. In fact, the Revenue has accepted this method in earlier

Trl Riceland Pvt. Ltd., (Formerly Known As M/S Tilda Riceland P.Ltd.), New Delhi vs. Addl.CIT, Special Range- 9, New Delhi

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

ITA 7366/DEL/2018[2014-15]Status: DisposedITAT Delhi17 Nov 2021AY 2014-15

Bench: Shri O.P. Kant & Shri. K. N. Chary[Through Video Conferencing] Assessment Year: 2014-15

Section 1Section 115JSection 271

done as per the provisions of section 92C of the Act. The Section 92C(1) has prescribed different method of benchmarking including CUP, resale price method, cost plus method, profit split method and transactional net margin method. The Section 92C(2) of the Act has provided manner of applying most

Nectar Lifesciences Ltd., Chandigarh vs. ACIT, Circle- 18(1), New Delhi

In the result, the additions, made by the Assessing

ITA 567/DEL/2019[2014-15]Status: PendingITAT Delhi13 Sept 2021AY 2014-15

Bench: Shri Amit Shukla & Dr. B.R.R. Kumar

For Appellant: Shri Yogesh Monga, CAFor Respondent: Ms. Meera Srivastava, CIT-DR

Section 143(3)Section 80

treated as Arm’s Length Price. Thus, most of the methods in the case of the assessee could have been either CUP or resale price method wherein the rate of Rs.6.24 per unit which was the purchase rate fixed by Punjab State Electricity Regulatory Commission would have been taken otherwise

Dentsply India Pvt Ltd vs. DCIT, New Delhi

The appeals of the assessee are allowed

ITA 752/DEL/2009[2002-03]Status: DisposedITAT Delhi04 May 2021AY 2002-03

Bench: Sh. Amit Shukladr. B. R. R. Kumarita No. 752/Del/2009 : Asstt. Year: 2002-03 Ita No. 1682/Del/2009 : Asstt. Year: 2003-04 Ita No. 4195/Del/2009 : Asstt. Year: 2004-05 Dentsply India Pvt. Ltd., Vs Dcit, Plot No. 263, Fies, Patparganj Circle-10(1), Industrial Area, Delhi-110092 New Delhi (Appellantt (Respondent) Pan No. Aaacd3171E Assessee By : Sh. Himanshu Sinha, Adv. Revenue By : Ms. Meera Srivastava, Cit Dr Date Of Hearing: 25.03.2021 Date Of Pronouncement: 04.05.2021

For Appellant: Sh. Himanshu Sinha, AdvFor Respondent: Ms. Meera Srivastava, CIT DR

Section 254

admission of the additional grounds. The additional ground reads as under: “The inappropriate use of Transactional Net Margin Method (“TNMM”) instead of the Resale Price Method (“RPM”) as the most appropriate method (“MAM”) for benchmarking the Appellant’s international transaction of import of dental products from ... Margin Method (TNMM) as the most appropriate method to arrive at the ALP. In the said report itself, the assessee has rejected the Resale Price Method (RPM) for the reason that the said method focuses on gross profit margin which is heavily influenced by the scope and function performed

Dentsply India Pvt. Ltd, New Delhi vs. DCIT, New Delhi

The appeals of the assessee are allowed

ITA 4195/DEL/2009[2004-05]Status: DisposedITAT Delhi04 May 2021AY 2004-05

For Appellant: Sh. Himanshu Sinha, AdvFor Respondent: Ms. Meera Srivastava, CIT DR

Section 254

Dentsply India Pvt. Ltd, New Delhi vs. DCIT, New Delhi

The appeals of the assessee are allowed

ITA 1682/DEL/2009[2003-04]Status: DisposedITAT Delhi04 May 2021AY 2003-04

For Appellant: Sh. Himanshu Sinha, AdvFor Respondent: Ms. Meera Srivastava, CIT DR

Section 254

Luxottica India Eyewear Pvt. Ltd., Gurgaon vs. ACIT, Circle- 15(2), New Delhi

The appeal of the assessee is allowed

ITA 126/DEL/2018[2013-14]Status: DisposedITAT Delhi26 Apr 2021AY 2013-14

Bench: Sh. Amit Shukladr. B. R. R. Kumarita No. 126/Del/2018: Asstt. Year: 2013-14 M/S Luxottica India Eyewear Pvt. Ltd. Vs Acit, 7Th Floor, Dlf Building No. 9, Tower- Circle-15(2), B, Phase-Iii, Dlf Cyber City, New Delhi Gurgaon (Appellantt (Respondent) Pan No. Aabcl3871C

For Appellant: Sh. Nageshwar Rao, AdvFor Respondent: Sh. Surendrapal, CIT DR

Section 143(3)Section 92BSection 92F

transfer pricing adjustment of the transactions. 5. For benchmarking the international transactions with regard to the AMP expenses, the assessee has opted for Resale Price Method (RPM) whereas the revenue has resorted to Transactional Net Margin Method (TNMM) as the Most Appropriate Method (MAM). 6. Having heard the arguments ... discussions supra, it is held that the International Transaction on account of AMP does exist. The same calls for examination to determine ALP. Resale price method cannot be invoked in this case due to wide scope of the activities (including promotional activities directly benefitting the brand and creation of intangibles