“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

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

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

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

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

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

Dell International Services India Private Limited, Bangalore, Karnataka vs. Deputy Commissioner of Income-Tax, Circle - 2(1)(1), Bangalore, Karnataka

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

ITA 1488/BANG/2024[2014-15]Status: DisposedITAT Bangalore24 Jul 2025AY 2014-15

Bench: Shri. Laxmi Prasad Sahu & Shri. Soundararajan Kit(Tp)A No.1488/Bang/2024 Assessment Year : 2014-15

For Appellant: Ms. Tanmaye Rajkumar, ARFor Respondent: Dr. Divya K. J, CIT(DR)(ITAT), Bangalore

Section 144C(13)Section 92C

support services. The ALP of the international transactions for the services provided to the AEs has been determined by applying Transaction Net Margin Method (TNMM) stating IT(TP)A No.1488/Bang/2024 Page 4 of 14 to be at arm’s length. The OP/OC was considered as the PLI. The data base ... written submissions of the assessee. He selected 6 companies and calculated average margin at 27.83% and TPO calculated PLI as OP/OC under TNMM and he made adjustment of Rs.2,39,71,904/-. Accordingly, show cause notice was issued to the assessee. The assessee replied to the show cause notice. During

ACIT-24(1), Mumbai vs. Ramesh Kumar Jain, Mumbai

In the result, the appeal filed by the Revenue is dismissed

ITA 192/MUM/2025[2019-20]Status: DisposedITAT Mumbai24 Jul 2025AY 2019-20

Bench: Shri Vikram Singh Yadav & Shri Anikesh Banerjeeassessment Year : 2019-20 Acit-24(1), Ramesh Kumar Jain, 601, 6Th Floor, B-502, Oberoi Skyheight, Piramal Chambers, Vs. Cross Road Lokhandwala, Lalbaugh, Parel, Andheri (W), Mumbai-400012. Mumbai-400053. Pan : Adipj4196P (Appellant) (Respondent) For Assessee : Shri Rushabh Mehta For Revenue : Shri Uma Shankar Prasad, Cit-Dr Date Of Hearing : 11-06-2025 Date Of Pronouncement : 24-07-2025 O R D E R Per Vikram Singh Yadav, A.M : This Is An Appeal Filed By The Revenue Against The Order Of The Ld. Commissioner Of Income Tax(Appeals)-48, Mumbai [„Ld.Cit(A)‟], Dated 29-11-2024, Pertaining To Assessment Year (Ay) 2019-20, Wherein The Revenue Has Taken The Following Grounds Of Appeal:

For Appellant: Shri Rushabh MehtaFor Respondent: Shri Uma Shankar Prasad, CIT-DR

Section 131Section 133(6)Section 147Section 68Section 69C

Order pronounced in the open court on 24-07-2025 [ANIKESH BANERJEE] [VIKRAM SINGH YADAV] JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated: 24-07-2025 TNMM Copy to : 1) The Appellant 2) The Respondent 3) The CIT concerned 4) The D.R, ITAT, Mumbai 5) Guard file By Order Dy./Asst

O.C Tanner India Private Limited, Mumbai vs. DCIT, Circle -2(3)(1), Mumbai

In the result the appeal is, accordingly, he appeal is, accordingly, allowed for statistical allowed for statistical purposes

ITA 5785/MUM/2024[2021-22]Status: DisposedITAT Mumbai24 Jul 2025AY 2021-22

Bench: Shri Om Prakash Kant () & Ms. Kavitha Rajagopal () Assessment Year: 2021-22 O.C. Tanner India Pvt. Ltd., Dy. Cit, Circle-2(3)(1), No. 2, Lave 7 Tower 2, Phase Ii, 552, 5Th Floor, Aayakar Bhavan, Raiaskaran Techpark Andheri Vs. Maharishi Karve Road, Kurla Road, Andheri East, Mumbai-400020. Sakinaka S.O. Mumbai, Mumbai-400072. Pan No. Aabco 1031 F Appellant Respondent

For Appellant: Mr. Vijay Mehta, CA

Section 144C(13)Section 144C(5)

Method" is an appropriate substitute Panel holds that "Other Method" is an appropriate substitute Panel holds that "Other Method" is an appropriate substitute for TNMM as there is lack of service rendition and service for TNMM as there is lack of service rendition and service for TNMM as there

Rivendell Ph Llc, Mumbai vs. Deputy Commissioner of Income Tax, Int Taxation 4(1)(1), Mumbai

In the result, the appeal of the assessee is dismissed as withdrawn

ITA 4257/MUM/2023[2015-16]Status: DisposedITAT Mumbai24 Jul 2025AY 2015-16

Bench: Shri Vikram Singh Yadav & Shri Sandeep Singh Karhailassessment Year : 2015-16 Rivendell Pe Llc, Deputy Commissioner Of C/307, Jay Apartment, Income Tax, Santacruz (East), Vs. International Taxation-4(1)(1), Mumbai Mumbai Maharashtra-400055. Pan : Aaccn4715G (Appellant) (Respondent) For Assessee : Ms. Hinal Shah For Revenue : Shri Satya Pal Kumar, Cit-Dr Date Of Hearing : 24-07-2025 Date Of Pronouncement : 24-07-2025 O R D E R Per Vikram Singh Yadav, A.M : This Is An Appeal Filed By The Assessee Against The Order Of The Assessing Officer (Ao), Passed U/S.144C(13) R.W.S.143(3) Of The Income Tax Act, 1961 („The Act‟), Consequent To The Directions Given By The Cit(Drp-2), Mumbai-1, Pertaining To Assessment Year (Ay) 2015-16. 2. During The Course Of Hearing, The Ld.Ar Submitted That The Assessee Seeks Permission To Withdraw The Subject Appeal & Has Filed A Petition In This Regard & The Contents Thereof Read As Under: “We Refer To The Income Tax Appeal (Ita) Number 4257/Mum/2023 Filed On 24 November 2023 For The Ay 2015-16 Scheduled For Hearing On 24 July 2025 Before The I Bench, Mumbai Of Hon'Ble Income Tax Appellate Tribunal (Itat). The Above Appeal Was Filed Before Hon'Ble Itat Against

For Appellant: Ms. Hinal ShahFor Respondent: Shri Satya Pal Kumar, CIT-DR

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

pronounced in the open Court on 24-07-2025 [SANDEEP SINGH KARHAIL] [VIKRAM SINGH YADAV] JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated: 24-07-2025 TNMM 3 Copy to : 1) The Appellant 2) The Respondent 3) The CIT concerned 4) The D.R, ITAT, Mumbai 5) Guard file By Order Dy./Asst

ACIT, Circle - 2(1), Kolkata vs. M/S. Bata India Ltd., Kolkata

Appeal is partly allowed and the CO is dismissed

ITA 1844/KOL/2017[2009-10]Status: DisposedITAT Kolkata23 Jul 2025AY 2009-10

Bench: the Hon'ble Income Tax Appellate Tribunal, Kolkata in ITA No. 1844/Kol/2017 for the assessment year 2009-10;

Section 143(3)Section 250Section 43B

distinguishing features are mainly that CUP method was used for AY 2004- 6 CO No. 124/Kol/2017 Bata India Limited 05 while TNMM method was used for AY 2009-10. In AY 2004-05 local and e-commerce services were not included whereas they were included ... that ALP should be worked out on a transaction-by- transaction basis and also CUP being a direct method deserves to be preferred over TNMM. (iv) Since the assessee never made any payment in previous years for such services, therefore, it was obvious that it places no value on such

M/S. Tbea Shenyang Trasformer Gropup Company Limited, Vadodara vs. The Deputy Commissioner of Income Tax, Int. Tax., Vadodara

In the result, the appeal filed by the assessee is dismissed

ITA 581/AHD/2017[2012-13]Status: DisposedITAT Ahmedabad22 Jul 2025AY 2012-13

Bench: Smt. Annapurna Gupta & Ms. Suchitra Kambleआयकर अपील सं./I.T.A. No. 581/Ahd/2017 (िनधा"रण वष" / Assessment Year : 2012-13) बनाम/ M/S. Tbea Shenyang Deputy Commissioner Of Transformer Group Income Tax Vs. Company Limited International Taxation, National Highway No.-8, Vadodara Villae : Miyagam, Karja, Vadodara, Gujarat - 390007 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aadct4557F (Appellant) .. (Respondent) अपीलाथ" ओर से /Appellant By : Shri Arpit Jain, Ar ""यथ" क" ओर से/Respondent By : Shri Mahesh Shah, Cit. Dr 24/04/2025 Date Of Hearing Date Of Pronouncement 22/07/2025 O R D E R Per Smt. Annapurna Gupta, Am:

For Appellant: Shri Arpit Jain, ARFor Respondent: Shri Mahesh Shah, CIT. DR

Section 143(3)Section 9Section 92C

execution of onshore service contract by the assessee (PE of TBEA) was not at ALP and proceeded to determine the same by applying TNMM as (Most Appropriate Method) MAM adopting average margin OP to OC of comparables identified from database. 13 companies were identified as comparables and their average Profit ... compensated for the onshore activities delegated to it for execution and he went on to determine the ALP of the said activity by applying TNMM. A selection for comparables were done. 13 comparables were selected and using PLI OP/OC 7% was found to be the average mean

Sachchiyay Mata Bullion Pvt Ltd, Mumbai vs. Income Tax Officer Ward4(3)(1), Mumbai

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

ITA 4443/MUM/2025[2022-23]Status: DisposedITAT Mumbai22 Jul 2025AY 2022-23

Bench: Shri Saktijit Dey & Shri Vikram Singh Yadavassessment Year : 2022-23 Sachchiyay Mata Bullion Pvt. Income Tax Officer, Ltd., Ward-4(3)(1), Shop No. 25, Patwa Chawl, Vs. 648, Aayakar Bhavan, Shaikh Menon Street, M.K. Road, Zaveri Bazaar, Mumbai-400020. Mumbai-400002. Pan : Abfcs4174C (Appellant) (Respondent) Assessee By : Shri Devendra Jain (Virtually Appeared) Revenue By : Shri Bhagirath Ramawat, Sr.Dr Date Of Hearing : 18-07-2025 Date Of Pronouncement: 22-07-2025 O R D E R Per Vikram Singh Yadav, A.M : This Is An Appeal Filed By The Assessee Against The Order Of The Learned Commissioner Of Income Tax (Appeals)-National Faceless Appeal Centre (Nfac), Delhi [„Ld.Cit(A)‟], Dated 23-05-2025, Pertaining To Assessment Year (Ay) 2022-23, Wherein The Ld.Cit(A) Has Confirmed The Order Passed By The Assessing Officer U/S. 143(3) R.W.S. 260 R.W.S. 144B Of The Income Tax Act, 1961 („The Act‟), Dt. 30-07-2024 & Has Sustained The Addition Of Rs. 5,40,97,148/- U/S. 68 Of The Act & An Amount Of Rs. 18,84,08,811/- U/S. 37(1) Of The Act. 2. During The Course Of Hearing, The Ld.Ar Submitted That The Ld.Cit(A) Has Held That There Was A Delay Of 67 Days In Filing The Appeal & In Absence Of Any Application Moved By The Assessee, Explaining The Reasons

For Appellant: Shri Devendra JainFor Respondent: Shri Bhagirath Ramawat, Sr.DR

Section 143(3)Section 37(1)Section 68

Order pronounced in the open court on 22-07-2025 [SAKTIJIT DEY] [VIKRAM SINGH YADAV] VICE PRESIDENT ACCOUNTANT MEMBER Mumbai, Dated: 22-07-2025 TNMM 4 Copy to : 1) The Appellant 2) The Respondent 3) The CIT concerned 4) The D.R, ITAT, Mumbai 5) Guard file By Order Dy./Asst

Albert Joseph Rozario, Mumbai vs. ITO, Int. Tax, Circle 4(1)(1), Mumbai

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

ITA 1168/MUM/2025[2018-19]Status: DisposedITAT Mumbai22 Jul 2025AY 2018-19

Bench: Shri Vikram Singh Yadav & Shri Rahul Chaudharyassessment Year : 2018-19 Albert Joseph Rozario, Ito, (Int. Tax), Circle-4(1)(1), B-311, 5Th Wing, Room No. 629, 6Th Floor, Inlaks Park, Vs. Kautilya Bhavan, Yari Road, Versova, C-41 To C-43, G Block, Andheri West, Bandra Kurla Complex, Mumbai-400058 Bandra East, Pan : Afvpr6139P Mumbai-400051 (Appellant) (Respondent) For Assessee : Shri Dharan Gandhi For Revenue : Shri Sridhar G. Menon, Sr.Dr Date Of Hearing : 01-05-2025 Date Of Pronouncement : 22-07-2025 O R D E R Per Vikram Singh Yadav, A.M : This Is An Appeal Filed By The Assessee Against The Final Assessment Order Passed By The Assessing Officer U/S 147 R/W 144C(13) Of The Act Dt. 30-12-2024, Consequent To The Directions Given By The Ld. Drp-1, Mumbai-3, U/S 144C(5) Of The Act, Dated 30-11-2024 Pertaining To Assessment Year (Ay.) 2018-19. 2. Briefly The Facts Of The Case Are That Basis Information Available Through The Insight Portal That The Assessee Had Purchased Immoveable Properties Amounting To Rs. 8,31,45,549/- & Has Received Interest

For Appellant: Shri Dharan GandhiFor Respondent: Shri Sridhar G. Menon, Sr.DR

Section 144C(1)Section 144C(5)Section 147Section 148Section 148ASection 56(2)(x)Section 69

Order pronounced in the open court on 22-07-2025 [RAHUL CHAUDHARY] [VIKRAM SINGH YADAV] JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated: 22-07-2025 TNMM 32 Copy to : 1) The Appellant 2) The Respondent 3) The CIT concerned 4) The D.R, ITAT, Mumbai 5) Guard file By Order Dy./Asst

Daido India Pvt. Ltd., Gurgaon vs. DCIT, Circle- 1(1), Gurgaon

ITA 5761/DEL/2018[2014-15]Status: DisposedITAT Delhi21 Jul 2025AY 2014-15

Bench: Shri Ramit Kochar & Sh. Yogesh Kumar U.S.

Section 142(1)Section 143(2)Section 143(3)Section 271(1)(c)Section 92C

reliability of financial data of overseas comparable companies, 1.2 Rejecting Cost Plus Method (CPM) and in the motu carrying out fresh search under TNMM Method 1.3 In carrying out comparability analysis under TNMM Method without carrying out proper FAR analysis of the tested party and of the comparables selected ... effort should be to see the company's activity in its entirety and find out what it is doing substantially. Further, when the TNMM is used for comparability analysis the advantages are that it allows some degree of flexibility and tolerance in the matter of selection of comparables. Under this

Spectraforce Technologies (India) Private Limited, Pune vs. ACIT, Circle 5, Pune

In the result, appeal of the assessee is partly allowed for statistical purposes as per terms indicated hereinabove

ITA 2853/PUN/2024[AY 2021-22]Status: DisposedITAT Pune18 Jul 2025

Bench: Dr.Manish Borad & Ms. Astha Chandra

For Appellant: Shri S. Raghunathan and Shri Abhiroop Bhargav KFor Respondent: Shri Prakash L. Pathade

Section 143(3)Section 92C(3)

length principle envisaged under the Act and in doing so, have grossly erred in not considering Staffing Augmentation Activity-Domestic as a TNMM comparable in addition to the three comparables considered in page 60 of 65 of TPO order. 2 Spectraforce Technologies (India) Private Limited 2. That on the facts ... ITAT. The appeal grounds span across the following in respect of Staff Augmentation Services on the following: a. TPO erred in rejecting internal TNMM as MAM: While rejecting the internal TNMM the TPO pointed out that there are significant differences in FAR profile of domestic and export recruitment services

Samsung Sdi India Pvt Ltd., Noida vs. DCIT, Circle-5(2)(1), Noida

In the result, appeal of the assessee is partly allowed

ITA 5475/DEL/2024[2021-22]Status: DisposedITAT Delhi18 Jul 2025AY 2021-22

Bench: Shri Challa Nagendra Prasad & Shri Manish Agarwal

Section 143(1)Section 143(3)Section 92C

study report. With respect to the manufacturing segment as the assessee has stopped production within one month of commencement therefore, Ld. DRP has held TNMM as most appropriate method applied by the TPO. Ld. DRP further rejected Berry ratio (GP/VAE) as PLI. Thereafter, the TPO has passed the effect giving ... pertaining to the distribution operations without providing any cogent reason. Furthermore, the Learned AO and TPO erred in applying the Transactional Net Margin Method (TNMM) for determining the Arm's Length Price (ALP) of the international transactions undertaken by the Appellant for its distribution operations. 4. That the Ld. DRP/AO/TPO

Eli Lilly and Company (India) Private Limited, Gurgaon vs. Assistant Commissioner of Income Tax, Circle 1(1), Gurgaon, Haryana

In the result, the appeal of the assessee is allowed

ITA 3500/DEL/2024[2020-21]Status: DisposedITAT Delhi18 Jul 2025AY 2020-21

Bench: Shri C. N. Prasad & Shri M. Balaganesheli Lilly & Company (India) Vs. Acit, Private Limited, Plot No 92, Circle-1(1), Sector 32, Institutional Area, Gurgaon, Haryana Jharsa, Gurgaon, Haryana, Gurgaon (Appellant) (Respondent) Pan: Aaace8901F

For Appellant: Shri K. M. Gupta, AdvFor Respondent: Shri S. K. Jadav, CIT (DR)

Section 144C(5)Section 92C

assessee had benchmarked the Business Support Services and the Trading Segment transactions with its AEs by adopting Transactional Net Margin Method (TNMM) as the Most Appropriate Method. The assessee before the ld TPO produced the invoices for reimbursement of expenses from its AEs in the form of debit note

Samsung Sdi India Pvt Ltd, Noida vs. Assessment Unit, Income-Tax Department, National Faceless Assessment Centre New Delhi, New Delhi

ITA 3472/DEL/2024[2020-21]Status: DisposedITAT Delhi18 Jul 2025AY 2020-21

Bench: Shri Challa Nagendra Prasad & Shri Manish Agarwal

Section 143(1)Section 143(3)Section 92C

Ivy Software Development Services Private Limited, Hyderabad vs. DCIT, Circle -2(1), Hyderabad

In the result, the ground no

ITA 73/HYD/2022[2017-18]Status: DisposedITAT Hyderabad16 Jul 2025AY 2017-18

Bench: Shri Vijay Pal Rao & Shri Madhusudan Sawdia

For Appellant: Shri Nageswar Rao, AdvocateFor Respondent: Shri B. Bala Krishna, CIT-DR

Section 143(2)Section 143(3)Section 144C(5)

streams, such as sale of products or technical know-how, does not automatically render the company incomparable, especially when the Transactional Net Margin Method (TNMM) is adopted. Under TNMM, he argued, some degree of functional difference can be tolerated, and the overall similarity of software development as the core activity ... cost-plus model, without owning any intangibles or assuming significant risks. Although we are in agreement with the contention of Ld. DR that TNMM permits a certain degree of tolerance in functional similarity, but that leeway cannot extend to situations where a company engages in fundamentally different business models, assumes

M/S Gujarat Guardian Ltd., New Delhi vs. DCIT, New Delhi

ITA 2539/DEL/2017[2005-06]Status: DisposedITAT Delhi16 Jul 2025AY 2005-06

Bench: Shri Prakash Chand Yadav & Shri Brajesh Kumar Singh

For Appellant: Shri Ajay Vohra, Sr. A.RFor Respondent: Shri Bhopal Singh, Sr. D.R

Section 92C

including export of float glass to its associated enterprise. In the Transfer Pricing Documentation, the international transactions were benchmarked using Transactional Net Margin Method (“TNMM”) method. By considering this method as Most appropriate method, the assessee has shown operating profit ratio of GGL at 27.26%, which as per assessee ... determined the arm's length price of international transactions of export of float glass, applying CUP method as against the TNMM applied by the assessee, holding that in the case of the assessee, same products have been sold to unrelated parties, and hence internal CUP would be the most suitable