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“TNMM”

Transfer PricingSection 92CSection 92C2,208 judgments

The decision most relied on for TNMM is Rampgreen Solutions Pvt. Ltd. v. CIT (377 ITR 533), cited in 196 judgments on BharatTax.

Leading authorities on TNMM

Rampgreen Solutions Pvt. Ltd. v. CIT
377 ITR 533 · 2015 · High Court
196
citing judgments

Knowledge Process Outsourcing (KPO) service providers are functionally dissimilar to Business Process Outsourcing (BPO) or Information Technology Enabled Services (ITeS) providers and cannot be compared for transfer pricing purposes, even under the Transactional Net Margin Method (TNMM). Further, companies with significantly different business models, such as those with extensive subcontracting, should be excluded as comparables.

Bausch & Lomb Eye Care (India) Pvt. Ltd. v. Additional CIT
381 ITR 227 · 2016 · High Court
127
citing judgments

The existence of an international transaction must be established before its arm's length price can be determined. An alleged 'excessive' AMP expenditure cannot unilaterally expand the scope of an international transaction if its existence is contested.

SAP Labs India Pvt. Ltd. v. ACIT
44 SOT 156 · 2011 · ITAT
100
citing judgments

Foreign exchange fluctuation gains or losses are operational in nature and must be included in the computation of the operating margin for both the assessee and comparable companies when determining the Arm's Length Price.

DIT (IT) v. Morgan Stanley & Co Inc.
162 Taxmann 165 · 2007 · Supreme Court
90
citing judgments

The profits of a Permanent Establishment (PE) must be determined on the basis of what an independent enterprise would derive, using the Transactional Net Margin Method (TNMM) for profit attribution. When applying TNMM, the operating profit from an international transaction should be compared with the operating profit margin of comparables.

Ranbaxy Laboratories Ltd. v. ACIT
68 Taxmann.com 322 · 2016 · High Court
55
citing judgments

When benchmarking export transactions, the Associated Enterprise (AE) can be considered the tested party if it possesses the least complex functional analysis. The Assessing Officer's acceptance of a methodology in prior years can also support its use.

Trilogy E-Business Software India (P.) Ltd. v. Dy. CIT
29 Taxmann.com 310 · 2013 · ITAT
48
citing judgments

For Transfer Pricing, this case clarifies that foreign exchange gains can be considered operating revenue for ITES providers, acknowledges the impact of offshore versus onsite development pricing on margins even when using TNMM, and affirms the use of a turnover filter for selecting comparable companies.

Capital IQ Information Systems India Pvt. Ltd. v. DCIT
32 Taxmann.com 21 · 2013 · ITAT
44
citing judgments

A change in depreciation policy impacts an entity's profitability, which is a key factor in assessing its suitability as a comparable company for transfer pricing analysis.

Electronic for Imaging (I) Pvt. Ltd. v. DCIT
85 Taxmann.com 124 · 2017 · ITAT
38
citing judgments

Comparability of a company for transfer pricing purposes must be decided afresh by the TPO after considering the facts recorded in prior tribunal decisions. The tribunal may direct exclusion of comparable companies based on such prior decisions.

Judgments citing TNMM

Tata Power Solar Systems Limited, Bangalore vs. DCIT, Bangalore

In the result, the appeal filed by the assessee stands allowed on the legal issue

ITA 699/BANG/2016[2011-12]Status: DisposedITAT Bangalore30 Mar 2022AY 2011-12

Bench: Shri. Chandra Poojari & Smt. Beena Pillaiit(Tp)A No. 548/Bang/2016 Assessment Year : 2011-12 M/S. Tata Power Solar The Deputy Systems Ltd., Commissioner Of 78, Electronic City, Income Tax, Hosur Road, Circle – 7(1)(1), Bangalore – 560 100. Bangalore. Vs. Pan: Aaact4660J Appellant Respondent & It(Tp)A No. 699/Bang/2016 Assessment Year : 2011-12 (By Assessee) Assessee By : Shri Kanchun Kaushal, Ca : Shri Manjunath Karkihalli, Revenue By Cit-Dr Date Of Hearing : 14-02-2022 Date Of Pronouncement : 30-03-2022 Order Per Beena Pillaipresent Cross Appeals By Assessee & Revenue Arises Out Of Final Assessment Order Dated 28.01.2016 Passed By The Ld.Dcit, Circle -7 (1)(1), Bangalore For Assessment Year 2011-12 On Following Grounds Of Appeal: It(Tp)A No. 548/Bang/2016 (Revenue’S Appeal): “1. The Directions Of The Dispute Resolution Panel Are Opposed To Law & Facts Of The Case.

For Appellant: Shri Kanchun Kaushal, CA
Section 144C

That on the facts and circumstances of the case, the learned AO/learned Panel erred in rejecting the internal Transactional Net Margin Method ("TNMM") analysis conducted by the Appellant and also proposing a different set of comparable companies for re-computing the arm's length price ("ALP") for the manufacturing activity

M/S Denso Kirloskar Industries Pvt. Ltd., Bangalore vs. DCIT, Bangalore

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

ITA 649/BANG/2016[2011-12]Status: DisposedITAT Bangalore30 Mar 2022AY 2011-12

Bench: Shri George George K & Ms. Padmavathy S

For Appellant: Shri T Suryanarayan, AdvocateFor Respondent: Shri Pradeep Kumar, CIT(DR)
Section 143(3)Section 154

Adjustment towards under utilization of capacity (Ground 6) 7. The assessee in the transfer pricing study has applied Transaction Net Margin Method (TNMM) as the most appropriate method and basis that the assessee concluded that the international transactions at arm’s length price (ALP) in arriving at the operating profit ... judgments we observe that Rule 10(B)(1)(e) of the Act on the one side and other sub-rules in the context of TNMM IT(TP)A No.649/Bang/2016 Page 16 of 27 need to be analyzed for eliminating the difference, if any, in the comparable uncontrolled transaction which materially

DCIT, Bangalore vs. M/S Tata Power Solar Systems Ltd., Bangalore

In the result, the appeal filed by the assessee stands allowed on the legal issue

ITA 548/BANG/2016[2011-12]Status: DisposedITAT Bangalore30 Mar 2022AY 2011-12

Bench: Shri. Chandra Poojari & Smt. Beena Pillaiit(Tp)A No. 548/Bang/2016 Assessment Year : 2011-12 M/S. Tata Power Solar The Deputy Systems Ltd., Commissioner Of 78, Electronic City, Income Tax, Hosur Road, Circle – 7(1)(1), Bangalore – 560 100. Bangalore. Vs. Pan: Aaact4660J Appellant Respondent & It(Tp)A No. 699/Bang/2016 Assessment Year : 2011-12 (By Assessee) Assessee By : Shri Kanchun Kaushal, Ca : Shri Manjunath Karkihalli, Revenue By Cit-Dr Date Of Hearing : 14-02-2022 Date Of Pronouncement : 30-03-2022 Order Per Beena Pillaipresent Cross Appeals By Assessee & Revenue Arises Out Of Final Assessment Order Dated 28.01.2016 Passed By The Ld.Dcit, Circle -7 (1)(1), Bangalore For Assessment Year 2011-12 On Following Grounds Of Appeal: It(Tp)A No. 548/Bang/2016 (Revenue’S Appeal): “1. The Directions Of The Dispute Resolution Panel Are Opposed To Law & Facts Of The Case.

For Appellant: Shri Kanchun Kaushal, CA
Section 144C

That on the facts and circumstances of the case, the learned AO/learned Panel erred in rejecting the internal Transactional Net Margin Method ("TNMM") analysis conducted by the Appellant and also proposing a different set of comparable companies for re-computing the arm's length price ("ALP") for the manufacturing activity

M/S Continental Automotive Components India Private Limited, Bangalore vs. Deputy Commissioner of Income Tax Circle-2(1)(1), Bangalore

In the result, the appeal is partly allowed

ITA 129/BANG/2019[2014-15]Status: DisposedITAT Bangalore29 Mar 2022AY 2014-15

Bench: Shri N.V. Vasudevan & Shri B. R. Baskaranassessment Year :2014-15 M/S. Continental Automotive Vs. Dcit, Components India Pvt. Ltd., Circle – 2(1)(1), Plot No.53B, Bommasandra Industrial Bengaluru. Area, Hosur Road, Attibele Hobli, Anekal Taluk, Bengaluru–560 099. Pan : Aakcs 9578 C Appellant Respondent Assessee By : Shri. T. Suryanarayana, Senior Advocate Revenue By : Shri. Mudavathu Harish Chandra Naik, Cit(Dr)(Itat), Bengaluru. Date Of Hearing : 21.03.2022 Date Of Pronouncement : 29.03.2022 O R D E R

For Appellant: Shri. T. Suryanarayana, Senior AdvocateFor Respondent: Shri. Mudavathu Harish Chandra Naik, CIT(DR)(ITAT), Bengaluru
Section 143(3)Section 92

Study) in terms of Sec.92D of the Act justifying the price it received from the AE. The Assessee chose Transactional Net Margin Method (TNMM) – as the Most Appropriate Method for comparing Assessee’s profit margin with that of comparable companies. Under this method the comparison is made between the Assessee ... Rs.8,17,10,000/- Operating/Net mark-up (OP/OC) 6.29% Comparison of the TP studies done by the Assessee and TPO: Assessee TPO Methodology adopted TNMM TNMM Profit Level Indicator OP/TC OP/OC (PLI) Database used PROWESS & PROWESS &Ace- CAPITALINE PLUS TP Comparables selected 9 8 Filters applied by Assessee

Givaundan(India) Pvt. Ltd., Bangalore vs. ACIT, Ltu Cr 1, Bangalore

In the result the appeal filed by assessee stands allowed for statistical purposes

ITA 229/BANG/2015[2010-2011]Status: DisposedITAT Bangalore29 Mar 2022AY 2010-2011

Bench: Shri. B.R. Baskaran & Smt. Beena Pillaiit(Tp)A No. 229/Bang/2015 Assessment Year : 2010-11 M/S. Givaudan (India) The Assistant Pvt. Ltd., Commissioner Of Plot No. 26, 2Nd Cross, Income Tax, Jigani Industrial Area, Ltu, Bangalore – 562 106. Circle – 1, Vs. Pan: Aaacv7454J Bangalore. Appellant Respondent Assessee By : Shri Sumeet Khurana, Ca : Shri Sumer Singh Meena, Cit- Revenue By I Date Of Hearing : 11-01-2022 Date Of Pronouncement : 29-03-2022 Order Per Beena Pillaiit Is Submitted That The Main Appeal Was Heard By This Tribunal & Order Was Passed On 02/08/2019. However Grounds 6 & 7 Were Not Adjudicated Independently For Assessment Year 2010- 11. The Assessee Preferred Mp No.15/Bang/2020 Requesting For Adjudication Of These Grounds. 2. Accordingly The Present Appeal Is Fixed For Hearing For Adjudication Of Following Grounds: “6. That The Learned Ao & The Learned Panel Erred Both In Facts & Law In Confirming The Action Of The Learned Tpo Of Making An Adjustment To The Transfer Price Of The Appellant In Respect Of The Payment Of Royalty By Rs.27,67,42,242, Holding That The International Transaction

For Appellant: Shri Sumeet Khurana, CA

Upholding the approach of the learned TPO on Applying the CUP method as the most appropriate method despite acknowledging and accepting the selection of TNMM by the Appellant in demonstrating the arm's length nature of its international transactions in the TP documentation. 6.2. Upholding the conclusion of the learned ... 229/Bang/2015 It is submitted that the assessee had bench marked the payment of Royalty by adopting a combined approach by considering TNMM as the most appropriate method. The Ld.AR submitted that payment of royalty is closely linked to the manufacturing segment. 5. For the year under consideration, assessee paid Rs.276

M/S. Capco Technologies Private Limited, Bengaluru vs. Deputy Commissioner of Income Tax, Circle- 2(1)(1), Bangalore

In the result, appeal of the assessee is partly allowed

ITA 2436/BANG/2019[2015-16]Status: DisposedITAT Bangalore28 Mar 2022AY 2015-16
For Appellant: Shri. Sandeep Huilgol, AdvocateFor Respondent: Shri. Mudavathu Harish Chandra Naik, CIT(DR)(ITAT), Bengaluru
Section 143(3)Section 144C(13)Section 92Section 92(1)Section 92B(1)

Transfer Pricing Study (TP Study) to justify the price paid in the international Transaction as at ALP by adopting the Transaction Net Margin Method (TNMM) as the Most Appropriate Method (MAM) of determining ALP. The assessee selected Operating Profit/Operating Cost (OP/OC) as the Profit Level Indicator (PLI) for the purpose ... Length. 4. The Transfer Pricing Officer (TPO) to whom the determination of ALP was referred to by the AO, accepted TNMM as the MAM and also used the same PLI for comparison i.e., OP/OC. The TPO reworked the OP/OC of the assessee at 16.19%. He also selected comparable companies from

M/S Verifone India Technology Pvt Ltd, Bangalore vs. Deputy Commissioner of Income Tax Circle-7(1)(2), Bangalore

In the result, appeals filed by assessee stands allowed

ITA 3089/BANG/2018[2012-13]Status: DisposedITAT Bangalore25 Mar 2022AY 2012-13

Bench: Shri. Chandra Poojari & Smt. Beena Pillaiassessment Year : 2011-12 M/S. Verifone India Technology Pvt. Ltd., A 101, 1St Floor, Cyber The Income Tax Park, Plot No. 76, 77 & 78, Officer, Doddathogur Village, Ward – 7 (1) (3), Begur Hobli, Bangalore. Bangalore South Taluk, Vs. Bangalore – 560 100. Pan: Aaccv1683K Appellant Respondent & Assessment Year : 2012-13 M/S. Verifone India Technology Pvt. Ltd., A 101, 1St Floor, Cyber The Deputy Park, Plot No. 76, 77 & 78, Commissioner Of Doddathogur Village, Income Tax, Begur Hobli, Circle – 7 (1)(2), Bangalore South Taluk, Vs. Bangalore. Bangalore – 560 100. Pan: Aaccv1683K Appellant Respondent Assessee By : Shri K.R. Vasudevan, Advocate : Shri Priyadarshi Mishra, Addl. Revenue By Cit (Dr) Date Of Hearing : 22-02-2022 Date Of Pronouncement : 25-03-2022

For Appellant: Shri K.R. Vasudevan, Advocate
Section 92C

Services 21,64,04,719/- The Ld.TPO noted that assessee computed the margin at 14.94% by using OP/OC PLI. It used TNMM as the most appropriate method and used 12 comparables having average margin at 10.94%. It was thus submitted by the assessee that the transaction is at arms length ... 3089/Bang/2018 R&D Services 28,22,35,169/- The Ld.TPO noted that assessee computed the margin at 14.91% by using OP/OC PLI. It used TNMM as the most appropriate method and used 7 comparables having average margin at 7.66%. It was thus submitted by the assessee that the transaction

M/S Verifone India Technology Pvt Ltd, Bangalore vs. Income Tax Officer Ward-7(1)(3), Bangalore

In the result, appeals filed by assessee stands allowed

ITA 3088/BANG/2018[2011-12]Status: DisposedITAT Bangalore25 Mar 2022AY 2011-12

Bench: Shri. Chandra Poojari & Smt. Beena Pillaiassessment Year : 2011-12 M/S. Verifone India Technology Pvt. Ltd., A 101, 1St Floor, Cyber The Income Tax Park, Plot No. 76, 77 & 78, Officer, Doddathogur Village, Ward – 7 (1) (3), Begur Hobli, Bangalore. Bangalore South Taluk, Vs. Bangalore – 560 100. Pan: Aaccv1683K Appellant Respondent & Assessment Year : 2012-13 M/S. Verifone India Technology Pvt. Ltd., A 101, 1St Floor, Cyber The Deputy Park, Plot No. 76, 77 & 78, Commissioner Of Doddathogur Village, Income Tax, Begur Hobli, Circle – 7 (1)(2), Bangalore South Taluk, Vs. Bangalore. Bangalore – 560 100. Pan: Aaccv1683K Appellant Respondent Assessee By : Shri K.R. Vasudevan, Advocate : Shri Priyadarshi Mishra, Addl. Revenue By Cit (Dr) Date Of Hearing : 22-02-2022 Date Of Pronouncement : 25-03-2022

For Appellant: Shri K.R. Vasudevan, Advocate
Section 92C

Services 21,64,04,719/- The Ld.TPO noted that assessee computed the margin at 14.94% by using OP/OC PLI. It used TNMM as the most appropriate method and used 12 comparables having average margin at 10.94%. It was thus submitted by the assessee that the transaction is at arms length ... 3089/Bang/2018 R&D Services 28,22,35,169/- The Ld.TPO noted that assessee computed the margin at 14.91% by using OP/OC PLI. It used TNMM as the most appropriate method and used 7 comparables having average margin at 7.66%. It was thus submitted by the assessee that the transaction

Ingersoll Rand Technologies and Services Private Limited, Bangalore vs. Asst.C.I.T., Bangalore

In the result, the appeal of the assessee is allowed

ITA 89/BANG/2016[2011-12]Status: DisposedITAT Bangalore24 Mar 2022AY 2011-12

Bench: Shri George George K & Ms. Padmavathy S

For Appellant: ShriFor Respondent: Shri , CIT(DR)
Section 143(3)Section 92C

under:- Sl.No Nature of international AY 2011-12 Method transaction adopted for ALP 1 Sale of finished goods 19,32,57,464 TNMM 2 Recovery of Expenses 10,13,422 At Cost 3 Purchase of raw materials 6,32,61,638 TNMM 4 Purchase of finished ... TNMM goods 5 Cost Contribution on 2,40,69,613 TNMM account of Management Consultancy Total 35,75,89,342 In the proceedings u/s 92CA of the Act, the TPO had accepted the bench marking adopted and accepted the international transactions as being at arm’s length price

Dhl Logistics P.Ltd, Mumbai vs. DCIT Cir 9(3)(1), Mumbai

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

ITA 7286/MUM/2018[2014-15]Status: DisposedITAT Mumbai23 Mar 2022AY 2014-15

Bench: Shri Pramod Kumar & Shri Pavan Kumar Gadaledhl Logistics Pvt Ltd Vs. Acit – 9(3)(1) 201A, Silver Utopia, Room No. 215, Cardinal Gracias Road 2Nd Floor, Aayakar Chakala, Andheri (E) Bhavan, M.K.Road, Mumbai – 400099 Mumbai – 400020 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aaacm6824A Appellant .. Respondent Appellant By : Shri. Madhur Agarwal.Ar Respondent By : Dr. Yogesh Kamat.Cit.Dr Date Of Hearing 27.01.2022 Date Of Pronouncement 15.03.2022 आदेश / O R D E R Per Pavan Kumar Gadale Jm:

For Appellant: Shri. Madhur Agarwal.ARFor Respondent: Dr. Yogesh Kamat.CIT.DR
Section 143(3)Section 144C(5)Section 92D

Method No the Used . transactions 1 Freight 4,964,045,74 5,329,216,14 Transaction Revenue 3 4 1 Net Mrgin Method (TNMM) 2 Freight 7,202,693,84 7,763,645,25 TNMM Express 0 3 3 Management 483,270,358 572,226,560 TNMM and IT Service ... Provisions of NA 5,886,168 Internal Warehousing TMM support service 5 Provisions of 540,176,824 220,966,117 TNMM support service 6 Purchase of 689,182 38,306 TNMM supplies 7 Other 56,507,682 155,361,378 Comparable allocated costs uncontrolle d price (CUP) 8 Reimbursemen

M/S Brady Company India Private Limited, Bangalore vs. Income Tax Officer Ward-1(1)(4), Bangalore

In the result, ground 26 is allowed for statistical purposes

ITA 790/BANG/2019[2014-15]Status: DisposedITAT Bangalore22 Mar 2022AY 2014-15

Bench: Shri George George K, Jm & Ms.Padmavathy S, Am It(Tp)A No.103/Bang/2019 : Asst.Year 2014-2015 It(Tp)A No.790/Bang/2019 : Asst.Year 2014-2015 M/S.Brady Company India Private The Income Tax Officer Limited, No.26, Survey No.41 Ward 1(1)(4) V. Bengaluru. Konappana Agrahara Village Begur, Hobli, Electronci City, Phase-Ii, Bengaluru – 560 100. Pan : Aaccb8163A (Appellant) (Respondent) Appellant By : Sri.K.R.Vasudevan, Advocate Respondent By : Sri.Pradeep Kumar, Cit-Dr Date Of Pronouncement : 22.03.2022 Date Of Hearing : 07.03.2022 O R D E R Per George George K, Jm : These Appeals Are At The Instance Of The Assessee. The Relevant Assessment Year Is 2014-2015. 2. The Reason For Filing Two Appeals For Assessment Year 2014-2015 Is That Pursuant To The Dispute Resolution Panel’S (Drp) Directions (Directions Dated 28.09.2008), The A.O. Passed Final Assessment Order U/S 143(3) R.W.S. 144C Of The I.T.Act Dated 15.11.2018. In The Said Assessment Order, The Aggregate Transfer Pricing Adjustment Was Determined At Rs.14,43,51,081. An Appeal Has Been Filed Before The Tribunal Against The Order U/S 143(3) R.W.S. 144C Of The I.T.Act (Appeal No.It(Tp)A No.103/Bang/2019). Subsequently, On Application By The Assessee, The Drp Passed Rectification Order Dated

For Appellant: Sri.K.R.Vasudevan, AdvocateFor Respondent: Sri.Pradeep Kumar, CIT-DR
Section 143(3)Section 154

also observed that the annual report of the comparables was not filed by the assessee. The DRP has made general observation that TNMM requires broadly similar comparables and exactly similar companies are not required. This is not proper reason and TPO / DRP are duty bound to specifically analyse the comparables ... Management Fees (Grounds 14 to 22) (TP Adjustment) 5. Brief facts in relation to the above issue are as follows: The assessee had applied TNMM method as the Most Appropriate Method for justifying the ALP of the transaction of 16 IT(TP)A No.103 & 790/Bang/2019. M/s.Brady Company India Private Limited

M/S Brady Company India Private Limited, Bangalore vs. Income Tax Officer Ward-1(1)(4), Bangalore

In the result, ground 26 is allowed for statistical purposes

ITA 103/BANG/2019[2014-15]Status: DisposedITAT Bangalore22 Mar 2022AY 2014-15

Bench: Shri George George K, Jm & Ms.Padmavathy S, Am It(Tp)A No.103/Bang/2019 : Asst.Year 2014-2015 It(Tp)A No.790/Bang/2019 : Asst.Year 2014-2015 M/S.Brady Company India Private The Income Tax Officer Limited, No.26, Survey No.41 Ward 1(1)(4) V. Bengaluru. Konappana Agrahara Village Begur, Hobli, Electronci City, Phase-Ii, Bengaluru – 560 100. Pan : Aaccb8163A (Appellant) (Respondent) Appellant By : Sri.K.R.Vasudevan, Advocate Respondent By : Sri.Pradeep Kumar, Cit-Dr Date Of Pronouncement : 22.03.2022 Date Of Hearing : 07.03.2022 O R D E R Per George George K, Jm : These Appeals Are At The Instance Of The Assessee. The Relevant Assessment Year Is 2014-2015. 2. The Reason For Filing Two Appeals For Assessment Year 2014-2015 Is That Pursuant To The Dispute Resolution Panel’S (Drp) Directions (Directions Dated 28.09.2008), The A.O. Passed Final Assessment Order U/S 143(3) R.W.S. 144C Of The I.T.Act Dated 15.11.2018. In The Said Assessment Order, The Aggregate Transfer Pricing Adjustment Was Determined At Rs.14,43,51,081. An Appeal Has Been Filed Before The Tribunal Against The Order U/S 143(3) R.W.S. 144C Of The I.T.Act (Appeal No.It(Tp)A No.103/Bang/2019). Subsequently, On Application By The Assessee, The Drp Passed Rectification Order Dated

For Appellant: Sri.K.R.Vasudevan, AdvocateFor Respondent: Sri.Pradeep Kumar, CIT-DR
Section 143(3)Section 154

also observed that the annual report of the comparables was not filed by the assessee. The DRP has made general observation that TNMM requires broadly similar comparables and exactly similar companies are not required. This is not proper reason and TPO / DRP are duty bound to specifically analyse the comparables ... Management Fees (Grounds 14 to 22) (TP Adjustment) 5. Brief facts in relation to the above issue are as follows: The assessee had applied TNMM method as the Most Appropriate Method for justifying the ALP of the transaction of 16 IT(TP)A No.103 & 790/Bang/2019. M/s.Brady Company India Private Limited

M/S. Transworld Ict Solutions (P) Ltd., Bangalore vs. DCIT, Bangalore

In the result, both the appeals are partly allowed

ITA 1310/BANG/2010[2007-08]Status: DisposedITAT Bangalore22 Mar 2022AY 2007-08

Bench: Shri N. V. Vasudevan & Shri B. R. Baskaranit(Tp)A Nos.1309 & 1310/Bang/2010 Assessment Years : 2006-07 & 2007-08 M/S. Transworld Ict Solutions Pvt. Ltd., Vs. Dcit, Innovator, No.15, Hoody, Whitefield Road, Circle – 2(1), Mahadevapura Post, Bengaluru. Bengaluru – 560 048. Pan : Aabct 3824 F Assessee Respondent Assessee By : Shri. G. S. Prashanth, Ca Revenue By : Shri. Dilip, Advocate, Standing Counsel For Department Date Of Hearing : 17.03.2022 Date Of Pronouncement : 22.03.2022 O R D E R Per N V Vasudevan

For Appellant: Shri. G. S. Prashanth, CAFor Respondent: Shri. Dilip, Advocate, Standing Counsel for Department
Section 132Section 143(3)Section 153ASection 92Section 92(1)Section 92B(1)

Without prejudice, the authorities below were not justified in law in rejecting the revised Transfer Pricing Study submitted by the appellant company under TNMM methodology is not in accordance with law under the facts and circumstances of the case. 5.3 The authorities below ought not to have used a separate ... database (PROWESS) for conducting the TNMM study and further the authorities below failed to consider the details and database considered by_ the appellant under the facts and circumstances of the case. 5.4 The authorities below have deviated from functional analysis, OECD guidelines and other conditions which are necessary for selecting

M/S. Transworld Ict Solutions (P) Ltd., Bangalore vs. DCIT, Bangalore

In the result, both the appeals are partly allowed

ITA 1309/BANG/2010[2006-07]Status: DisposedITAT Bangalore22 Mar 2022AY 2006-07

Bench: Shri N. V. Vasudevan & Shri B. R. Baskaranit(Tp)A Nos.1309 & 1310/Bang/2010 Assessment Years : 2006-07 & 2007-08 M/S. Transworld Ict Solutions Pvt. Ltd., Vs. Dcit, Innovator, No.15, Hoody, Whitefield Road, Circle – 2(1), Mahadevapura Post, Bengaluru. Bengaluru – 560 048. Pan : Aabct 3824 F Assessee Respondent Assessee By : Shri. G. S. Prashanth, Ca Revenue By : Shri. Dilip, Advocate, Standing Counsel For Department Date Of Hearing : 17.03.2022 Date Of Pronouncement : 22.03.2022 O R D E R Per N V Vasudevan

For Appellant: Shri. G. S. Prashanth, CAFor Respondent: Shri. Dilip, Advocate, Standing Counsel for Department
Section 132Section 143(3)Section 153ASection 92Section 92(1)Section 92B(1)

Without prejudice, the authorities below were not justified in law in rejecting the revised Transfer Pricing Study submitted by the appellant company under TNMM methodology is not in accordance with law under the facts and circumstances of the case. 5.3 The authorities below ought not to have used a separate ... database (PROWESS) for conducting the TNMM study and further the authorities below failed to consider the details and database considered by_ the appellant under the facts and circumstances of the case. 5.4 The authorities below have deviated from functional analysis, OECD guidelines and other conditions which are necessary for selecting

Peri (India) Pvt Ltd., Mumbai vs. Jt. CIT (OSD) Circle-13(1)(2), Mumbai

In the result, the appeal of the assessee is dismissed

ITA 4608/MUM/2019[2012-13]Status: DisposedITAT Mumbai21 Mar 2022AY 2012-13

Bench: Shri Prashant Maharishi, Am & Shri Sandeep Singh Karhail, Jm The Jt. Commissioner Of Peri (India) Pvt. Ltd. Income Tax (Osd), Circle- 1406 Dlh Park S V. Road, 13(1)(2), Room No. 218, 2 Nd Goregaon West, Vs. Floor, Aayakar Bhavan, Mumbai-400 062 Mumbai-400 020 (Appellant) (Respondent) Pan No. Aaecp4115E Assessee By : Shri M.P. Lohia, Ar Revenue By : Ms. Vatsalaa Jha, Cit Dr Date Of Hearing: 02.02.2022 Date Of Pronouncement : 21.03.2022

For Appellant: Shri M.P. Lohia, ARFor Respondent: Ms. Vatsalaa Jha, CIT DR

days to those parties, no interest is paid. Assessee submits it to be an international transaction but has aggregated with other transactions, adopted TNMM as Most Appropriate method and as its margins were comparable with other comparable companies, Stated this transitions also at arms’ length. It is claim

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

accepted in the assessments of the subsequent years AY 2007-08 and 2008-09, should not be substituted with the transactional net margin method (“TNMM”). 2.2.7. The Hon’ble DRP and learned AO / TPO have erred in rejecting the CUP method as MAM when the jurisdictional bench ... should not be arbitrarily rejected. 2.3. The Hon’ble DRP and learned AO / TPO have erred in law and on facts by adopting the TNMM as the MAM for benchmarking the international transaction of import of raw materials in the manufacturing segment. Fresh comparability analysis undertaken by the 2.4. learned

M/S Talisma Corporation Pvt Ltd, Bangalore vs. Deputy Commissioner of Income Tax Circle-7(1)(1), Bangalore

In the result, the appeal filed by the assessee stands allowed

ITA 2499/BANG/2017[2013-14]Status: HeardITAT Bangalore21 Mar 2022AY 2013-14

Bench: Shri. Chandra Poojari & Smt. Beena Pillaiit(Tp)A No. 2499/Bang/2017 Assessment Year : 2013-14 M/S. Talisma Corporation Pvt. Ltd., 3Rd Floor, Olympia The Deputy Building, Commissioner Of Bagmane Tech Park, Income Tax, C V Raman Nagar, Circle 7 (1)(1), Byrasandra Post, Bangalore. Vs. Bangalore – 560 093. Pan: Aabct1052F Appellant Respondent Assessee By : Shri T. Suryanarayan, Advocate Revenue By : Dr. Manjunath Karkihalli, Cit-Dr Date Of Hearing : 21-03-2022 Date Of Pronouncement : 21-03-2022 Order Per Beena Pillaipresent Appeal Filed By Assessee Against The Final Assessment Order Dated 26.09.2017 For A.Y. 2013-14 By Ld.Dcit, Circle – 7(1)(1), Bangalore On Following Grounds Of Appeal: “Based On The Facts & Circumstances Of The Case & In Law. Talisma Corporation Private Limited (Hereinafter Referred To As "Appellant"), Respectfully Craves Leave To Prefer An Appeal Against The Appeal Order Passed By The Learned Assessing Officer [Hereinafter Referred To As The Learned A01 Under Section 143(3) Read With Section 144C(13) Of The Income-Tax Act. 1961 (The Act") On The Following Grounds: That On The Facts & Circumstances Of The Case & In Law: 1. The Learned Ao/ Transfer Pricing Officer (.Tpo') Erred. In Law & In Facts. In Making An Addition Of Inr 1,44.13,409

For Appellant: Shri T. Suryanarayan, AdvocateFor Respondent: Dr. Manjunath Karkihalli, CIT-DR
Section 133(6)Section 143(3)Section 144C(13)Section 271(1)(c)

benchmarking the payment of royalty transaction: 4. The learned AO/ TPO erred. in law and facts. in not accepting Transactional Net Margin Method ('TNMM') as the most appropriate method for benchmarking the payment of royalty transaction: 5. The learned AO/ TPO erred. in law and in facts. in the rejection ... benchmarking the payment of royalty transaction; 4. The learned AO/ TPO erred, in law and facts, in not accepting Transactional Net Margin Method ('TNMM') as the most appropriate method for benchmarking the payment of royalty transaction; 5. The learned AO/ TPO erred, in law and in facts, in the rejection

Walvoil Fluid Power India Private Limited, Bangalore vs. Deputy Commissioner of Income Tax Circle-7(1)(2), Bangalore

In the result, appeal of the assesee is partly allowed

ITA 1901/BANG/2017[2013-14]Status: DisposedITAT Bangalore21 Mar 2022AY 2013-14

Bench: Shri George George K & Ms. Padmavathy S

For Appellant: Shri R.E Balasubramanyam, C.AFor Respondent: Shri A Sreenivasa Rao, CIT(DR)
Section 143(2)Section 143(3)Section 92C

Length Price: As per the Trasfer Pricing (TP) Report, the most appropriate method chosen by the assessee is the Transaction Net Margin Method (TNMM). 12. The assessee in the TP Report included three entities for comparables. During the transfer pricing proceedings the TPO added four more comparables ... Valves are used in tyre industry where as the assessee manufactures hydraulic valves which are different. The submission of the has been considered. The TNMM requires establishing comparability at a broad functional level. A strict product comparison is not a necessity. Hence as both the asscssee as well

Toyota Industries Engine India Private Limited, Bangalore vs. DCIT, Bangalore

In the result, appeal by the assessee is partly allowed

ITA 355/BANG/2016[2011-12]Status: DisposedITAT Bangalore21 Mar 2022AY 2011-12

Bench: Shri N. V. Vasudevan & Shri B. R. Baskaranit(Tp)A Nos.355, 2127/Bang/2016 Assessment Years : 2011-12, 2012-13 It(Tp)A No. & Appellant Respondent Assessment Year M/S. Toyota Industries Engine India Dcit, 355/Bang/2016 Private Limited, Circle – 4(1)(1), (Formerly Known As Kirloskar Toyota Bengaluru. Textile Machinery Private Limited), Plot No.9, Phase – 2, Jigani Industrial Area, Jigani, Bengaluru-560 105. Pan : Aaack 7425 Q -Do- Dcit, 2127/Bang/2016 Circle – 7(1)(1), Bengaluru.

For Appellant: Shri. Ajit Tolani/Darpan Kirpalani, CAFor Respondent: Shri. Roumuan Paite, CIT(DR)(ITAT), Bengaluru
Section 115JSection 143(3)

ground Nos.8 and 9 are concerned, the factual details are that in the Textile Machinery Manufacturing segment, the assessee had applied TNMM for benchmarking the transactions with the AE and undertaken a search for comparables and arrived at 3 companies. They were: Comparable Company Average NPI Kusters Calico 5.19% Machinery

M/S.Toyota Industries Engine India Private Limited, Bangalore vs. Deputy Commissioner of Income-Tax, Bangalore

In the result, appeal by the assessee is partly allowed

ITA 2127/BANG/2016[2012-13]Status: DisposedITAT Bangalore21 Mar 2022AY 2012-13

Bench: Shri N. V. Vasudevan & Shri B. R. Baskaranit(Tp)A Nos.355, 2127/Bang/2016 Assessment Years : 2011-12, 2012-13 It(Tp)A No. & Appellant Respondent Assessment Year M/S. Toyota Industries Engine India Dcit, 355/Bang/2016 Private Limited, Circle – 4(1)(1), (Formerly Known As Kirloskar Toyota Bengaluru. Textile Machinery Private Limited), Plot No.9, Phase – 2, Jigani Industrial Area, Jigani, Bengaluru-560 105. Pan : Aaack 7425 Q -Do- Dcit, 2127/Bang/2016 Circle – 7(1)(1), Bengaluru.

For Appellant: Shri. Ajit Tolani/Darpan Kirpalani, CAFor Respondent: Shri. Roumuan Paite, CIT(DR)(ITAT), Bengaluru
Section 115JSection 143(3)

ground Nos.8 and 9 are concerned, the factual details are that in the Textile Machinery Manufacturing segment, the assessee had applied TNMM for benchmarking the transactions with the AE and undertaken a search for comparables and arrived at 3 companies. They were: Comparable Company Average NPI Kusters Calico 5.19% Machinery