“tested party”

Transfer PricingSection 92CSection 92C615 judgments

The decision most relied on for tested party is ITO v. E Value Serve.com (75 Taxmann.com 195), cited in 60 judgments on BharatTax.

Leading authorities on tested party

ITO v. E Value Serve.com

75 Taxmann.com 195 · 2016 · Reported

citing judgments

In transfer pricing analysis, demanding daily balances for working capital adjustments is impractical and improper; adjustments should be based on opening and closing working capital. Transfer pricing inherently involves estimation to ensure comparability.

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.

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.

Skoda Auto India (P) Ltd. v. ACIT, Aurangabad

30 SOT 319 · 2009 · ITAT

citing judgments

The Tribunal may allow adjustments for differences between the tested party and comparable companies to eliminate material differences, provided accurate and credible evidence is furnished.

Development Consultants Pvt. Ltd. v. DCIT

115 TTJ 577 · 2008 · ITAT

citing judgments

The Arm's Length Price (ALP) must be determined on a transaction-by-transaction basis, and transactions should only be evaluated together if they are so closely linked or continuous that they cannot be adequately assessed separately. The 'tested party' for determining ALP should be the least complex entity.

Pr. CIT v. Aptara Technology (P.) Ltd.

92 Taxmann.com 240 · 2018 · High Court

citing judgments

A comparable company is not suitable if it has a significantly different business model, such as substantially higher outsourcing expenses as a percentage of operating costs, indicating a deviation from the tested party's operations.

Ranbaxy Laboratories Ltd. v. Additional Commissioner of Income-tax

110 ITD 428 · 2008 · ITAT

citing judgments

The tested party in a transfer pricing analysis should be the entity for which reliable comparable data is readily available and requires the fewest adjustments. This generally means selecting the party with the less complex functional analysis.

Smt. Raj Rani Devi Ramna v. CIT

201 ITR 1032 · 1993 · High Court

citing judgments

The transfer of property does not necessarily occur upon registration; the true test is the intention of the parties and whether there are any conditions precedent like payment of consideration or delivery of the deed.

Judgments citing tested party

Ivl Dhunseri Petrochem Industries Private Limited, Kolkata vs. D.C.I.T., Circle - 11(1), Kolkata

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

ITA 1712/KOL/2024[2020-2021]Status: DisposedITAT Kolkata24 Apr 2025AY 2020-2021

Bench: Shri Rajesh Kumar & Shri Pradip Kumar Choubeyआयकर अपील सं/Ita No.1712/Kol/2024 (नििाारण वर्ा / Assessment Year : 2020-2021) Ivl Dhunseri Petrochem Vs Dcit, Circle-11(1), Kolkata Industries Pvt. Ltd. Dhunseri House, 4A Woodburn Park, L.R.Sarani, West Bengal-700020 Pan No. :Aafcd 5214 M (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) नििााररती की ओर से /Assessee By : Shri Akkal Dudhewala, Ca & Vidhi Ladia, Ca राजस्व की ओर से /Revenue By : Pradip Kumar Mondal, Cit-Dr सुनवाई की तारीख / Date Of Hearing : 19/03/2025 घोषणा की तारीख/Date Of Pronouncement : 23/04/2025 आदेश / O R D E R Rajesh Kumar, Am : This Is An Appeal Filed By The Assessee Against The Order Dated 26/07/2024, Passed By The Assessment Unit, National Faceless Assessment Centre U/S.143(3) R.W.S.144C(13) R.W.S.144B Of The Act, For The Assessment Year 2020-2021 On The Following Grounds :- 1.(A) For That On The Facts & In The Circumstances Of The Case & In Law, The Tpo Erred In Making A Downward Adjustment Of Rs.24,72,79,392/- In Respect Of The Transfer Value Of Power By The Captive Power Plant At Haldia, West Bengal. (B) For That On The Facts & In The Circumstances Of The Case & In Law, The Methodology Followed By The Assessee To Benchmark The Arm'S Length Value Of The Power Transferred By The Eligible Unit To The Non-Eligible Unit Fulfilled The Internal Cup Parameters & In That View Of The Matter The Transfer Pricing Adjustment Made By The Tpo Was Impermissible On The Given Facts & In Law. (C) For That On The Facts & In The Circumstances Of The Case & In Law, The Manner In Which The Drp/Tpo Has Benchmarked

For Appellant: Shri Akkal Dudhewala, CA and VidhiFor Respondent: Pradip Kumar Mondal, CIT-DR

Section 115Section 143(3)Section 234ASection 270ASection 80ISection 92C

eligible unit at average landed cost at which the non eligible units procured electricity from the SEB by taking non eligible units as the tested party in the TP Study Report and accordingly ALP of the power captively consumed has been benchmarked at ALC of power purchased by the tested ... price at which the property ,goods or service has been acquired under similar market conditions. It is also settled that choice of tested party is of lesser significance for the purpose of application of CUP method but instead key factor in application of CUP is product comparability and similar market

Fluor Daniel India P.Ltd, New Delhi vs. Addl.CIT, Special Range-3, New Delhi

In the result, the appeals of the assessee in ITA Nos

ITA 6581/DEL/2018[2014-15]Status: DisposedITAT Delhi23 Apr 2025AY 2014-15

Bench: Shri Anubhav Sharma & Shri Naveen Chandra

For Appellant: Shri Vishal Kalra, AdvFor Respondent: Shri Om Prakash, CIT-DR

Section 143(3)Section 144CSection 271Section 92C

counsel for the assessee further submitted that the appropriate adjustments need to be considered to bring parity in the working capital investment of the tested party and the comparables rather than looking at the receivable independently. It is argued that such working capital adjustment takes into account the impact

The Dcitbharuch Range, Bharuch vs. Heubach Colour Pvt.Ltd., Ankleshwar

In the result, Ground Number 3 of the Department’s appeal is dismissed

ITA 547/AHD/2012[2007-08]Status: DisposedITAT Ahmedabad21 Apr 2025AY 2007-08

Bench: Smt. Annapurna Gupta & Shri Siddhartha Nautiyal

For Appellant: Ms. Amrin Pathan, A.RFor Respondent: Dr. Darsi Suman Ratnam, CIT-DR

Transfer Pricing Documentation maintained under Section 92D of the Act, the assessee treated itself as the tested party and applied the Transactional Net Margin Method (TNMM), using operating margin of cost as the Profit Level Indicator (PLI) to benchmark its transaction. The assessee selected eight comparable companies for its analysis ... sales made to Colour Ltd. In response, the assessee contended that TNMM was the most appropriate method and that it should be considered the tested party, given its limited risk as a custom manufacturer. The assessee submitted that the FAR analysis, supported by contracts and documents, was sufficient to demonstrate

Schneider Electric India Pvt. Ltd., Gurgaon vs. ACIT, New Delhi

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

ITA 1076/DEL/2016[2007-08]Status: DisposedITAT Delhi09 Apr 2025AY 2007-08

Bench: Shri Vikas Awasthy & Shri Pradip Kumar Kedia[Assessment Year : 2007-08] Schneider Electric India Vs Acit Pvt.Ltd., 9Th Floor, Tower C Circle-22(2) Building No.10, Dlf Cyber Room No. 226 City, Phase-Ii, Gurgaon C.R. Building Hartyana-122002 New Delhi-110002 Pan-Aabcs1642G Appellant Respondent Appellant By Shri Rohit Tiwari, Adv. & Tanya, Adv. Respondent By Shri Rajesh Kumar Dhanesta, Sr.Dr Date Of Hearing 17.01.2025 Date Of Pronouncement 09.04.2025

Section 10ASection 143(3)Section 144CSection 92C(2)Section 92D

components for manufacture of electrical equipment would meet the arm's length principle on a transaction-by-transaction basis and disregarded selection of overseas tested party on account of incorrect appreciation of facts and material place on record; R&D support services segment (sub-grounds 2.4 to 2.8) 2.4. distorting ... enterprises ("AEs") has been presented in the table below: Summary of economic analysis in Transfer Pricing (“TP”) study S.No. Nature of Method Profit Level Tested party Arm’s length international applied Indicator(“PLI”) margin margin (TP transactions report) 1. Import of Transactional Operating 11.70% 10.67% components Net Margin Profit/Sales (“Manufacturing

Capita India Private Limited, Mumbai vs. Assessment Unit, National Faceless Assessment Centre (NFAC), Mumbai

ITA 4954/MUM/2024[AY 2020-21]Status: DisposedITAT Mumbai07 Apr 2025

For Respondent: Shri Kiran Unavekar

Section 143(3)Section 144BSection 144C(13)Section 144C(5)Section 153Section 92C

IN THE INCOME TAX APPELLATE TRIBUNAL “K” BENCH, MUMBAI SHRI OM PRAKASH KANT, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER

Ayatna Realty Pvt. Ltd., New Delhi vs. ACIT, Circle-3(2), New Delhi

In the result, the appeal of the Assesse in ITA No

ITA 1295/DEL/2024[2012-13]Status: DisposedITAT Delhi07 Apr 2025AY 2012-13

Bench: Shri Vikas Awasthy & Shri Manish Agarwalm/S Wrigley India Private Dcit, Limited Circle-27(2), 206, Okhla Industrial Vs. New Delhi. Estate, Phase Iii, New Delhi-110020 Pan-Aaacw1789P (Appellant) (Respondent) Joint Cit (Osd), M/S Wrigley India Private Circle-27(2), Limited, New Delhi Vs. 206, Okhla Industrial Estate, Phase Iii, New Delhi-110020 Pan-Aaacw1789P (Appellant) (Respondent)

Section 250(6)Section 92CSection 92C(3)Section 92D

associated enterprise ('AE') and disregarding the benchmarking methodology of the Appellant by drawing an erroneous conclusion that the Appellant should be chosen as the tested party for benchmarking the said international transaction; 2.2. disregarding the fact that when the transaction of sale of finished goods by the Appellant ... overseas AEs (in its capacity as routine manufacturers only for the raw materials) were the least complex entity and were chosen as the tested party for the transaction ITA No.1293 to1295/Del/2022 pertaining to purchase of goods and TNMM was used as the most appropriate method with OP/TC as the relevant

Ayatna Realty Pvt. Ltd., New Delhi vs. ACIT, Circle-3(2), New Delhi

In the result, the appeal of the Assesse in ITA No

ITA 1294/DEL/2024[2011-12]Status: DisposedITAT Delhi07 Apr 2025AY 2011-12

Section 250(6)Section 92CSection 92C(3)Section 92D

DCIT, Cirlce- 1(1) (1), International Taxation, New Delhi vs. American Express Banking Corp. (India Branch), New Delhi

In the result, both appeals are allowed for statistical purposes as above

ITA 165/DEL/2019[2011-12]Status: DisposedITAT Delhi02 Apr 2025AY 2011-12

Bench: Shri Vikas Awasthy & Shri Avdhesh Kumar Mishra

./2010] American Express Banking Corp. o. Denso Haryana Pvt. Ltd. [2009-TIOL-696-HC-Del-IT] 6. The Ld. TPO questioned the choice of tested party. The assessee had taken its foreign AEs except one as tested party and compared the arm’s length margins of services with those ... foreign comparables. However, the Ld. TPO had held the assessee as a tested party instead of its foreign AEs. Further, the Ld. TPO, keeping in view the Rule 10B(2)(d) of the Income Tax Rules and availability of data of foreign comparables in public domain might not be sufficient

Royal Canin India Private Limited, Mumbai vs. Assistant Commissioner of Income-Tax, Circle 3(1)(1), Mumbai

In the result, appeal of the assessee Ground no

ITA 4546/MUM/2024[2020-21]Status: DisposedITAT Mumbai01 Apr 2025AY 2020-21

Bench: Shri Amarjit Singh & Shri Anikesh Banerjee

For Appellant: Shri K.M. Gupta a/w Shri AnmolFor Respondent: Shri Pankaj Kumar (CIT DR)

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

During the alleged assessment year, the assessee undertook the following international transactions with its AES: Particulars Most Appropriate Method ('MAM') Value international transaction (INR) Tested party Margin Arm's length range Payment of franchisee fees Comparable uncontrolled price ('CUP') 244,691,341 9% 8% to 10% with median

Rajasthan Prime Steel Processing Center Pvt. Ltd., Alwar vs. DCIT, Circle- 15(1), New Delhi

Accordingly, the grounds relevant to this issue raised by the Revenue stand dismissed in both years

ITA 3293/DEL/2018[2010-11]Status: DisposedITAT Delhi27 Mar 2025AY 2010-11

Bench: Shri Vikas Awasthy & Shri Avdhesh Kumar Mishra

Section 271(1)(c)

assessee has utilized only 75% of its capacity. The assessee has considered its AEs; namely, Honda Japan and Honda Trading Company as the tested parties and has used foreign comparables in AY 2009-10. Whereas in the subsequent year; i.e. AY 2010-11, the assessee itself is the tested company ... issued show-cause notice to the assessee that why not the assessee should be taken as tested party instead of its foreign AEs and then separate comparability analysis of two segments; Manufacturing and Trading. In response to the Show-cause notice, the assessee raised following contentions before

Jsw Energy Limited, Mumbai vs. The Assistant Commissioner of Income Tax, Central Circle 8(3), Mumbai

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

ITA 3714/MUM/2024[2020-21]Status: DisposedITAT Mumbai26 Mar 2025AY 2020-21

Bench: Shri Om Prakash Kant () & Ms. Kavitha Rajagopal ()

For Appellant: Mr. Gaurav KabraFor Respondent: Ms. Neena Jeph, CIT-DR/

Section 115JSection 14ASection 37Section 80I

rates at which the independent parties with similar credit ratings would be able to obtain intra-group loans. The AE was selected as the tested party and its credit rating was determined to be Baal (Moody; equivalent to S&P BBB+) which fall in the lower medium investment grade. Selecting ... Finally, Ld. TPO proceeded to work out the mean ALP rate on the basis of above factors. The assessee was taken as the tested party and External CUP method was used for benchmarking the aforesaid transaction. External CUP, as per Ld. TPO, could be the Bank Prime Lending Rate

Jsw Energy (Barmer) Limited, Mumbai vs. The Assistant Commissioner of Income Tax, Central Circle 8(3), Mumbai

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

ITA 3713/MUM/2024[2020-21]Status: DisposedITAT Mumbai26 Mar 2025AY 2020-21

Bench: Shri Om Prakash Kant () & Ms. Kavitha Rajagopal ()

For Appellant: Ms. Neena Jeph, CIT-DR/For Respondent: Mr. Gaurav Kabra

Section 14A

would be able to obtain intra with similar credit ratings would be able to obtain intra-group loans. The AE was selected as the tested party and its credit loans. The AE was selected as the tested party and its credit loans. The AE was selected as the tested party ... basis of above factors. The assessee was taken as rate on the basis of above factors. The assessee was taken as the tested party and External CUP me the tested party and External CUP method was used for thod was used for benchmarking the aforesaid transaction. External

Knauf India Pvt Ltd (Earlier Know As Usg Boral Building Products (India) Pvt Ltd), Gurgaon vs. ITO, Ward-14(3), New Delhi

In the result, the appeal filed by the assessee being ITA

ITA 2061/DEL/2022[2018-19]Status: DisposedITAT Delhi21 Mar 2025AY 2018-19

Bench: Shri S.Rifaur Rahman & Shri Vimal Kumar

For Appellant: Shri Ajit Kumar Jain, CAFor Respondent: Shri S.K. Jhadav, CIT DR

Section 144Section 37Section 92CSection 92C(3)Section 92D

with the OECD Guidelines as follows ;- “(a) Compute the average of opening and closing balances of inventories, trade debtors/receivables, trade creditors/payables of both the tested party and the comparables for the relevant year on revenue account only. (b) Compute the net working capital ratio (in percentage) after dividing ... working capital by operating cost/sales or such denominator (as is used in the PLI) both for the tested party and the comparables. (c) Determine the difference between the tested party’s ratio with that of each comparable. (d) Multiply the above difference by the interest rate i.e. SBI Prime Lending

Knauf India Pvt Ltd (Earlier Know As Usg Boral Building Products (India) Pvt Ltd), Haryana vs. ITO, Ward 14 (3), New Delhi

In the result, the appeal filed by the assessee being ITA

ITA 2060/DEL/2022[2017-18]Status: DisposedITAT Delhi21 Mar 2025AY 2017-18

Bench: Shri S.Rifaur Rahman & Shri Vimal Kumar

For Appellant: Shri Ajit Kumar Jain, CAFor Respondent: Shri S.K. Jhadav, CIT DR

Section 144Section 37Section 92CSection 92C(3)Section 92D

Credit Agricole Corporate and Investment Bank, Mumbai vs. The Dy-CIT (Int. Taxation)-2(1)(1), Mumbai

Accordingly these grounds are dismissed as not pressed

ITA 749/MUM/2022[2017-18]Status: DisposedITAT Mumbai20 Mar 2025AY 2017-18

Bench: Smt Beena Pillai, Jm & Ms Padmavathy S, Am I.T. (Tp) A. No. 1479/Mum/2015 (Assessment Year: 2010-11) Credit Agricole Corporate & Dcit (International Taxation)- Investment Bank (Formerly 2(1)(1), 1St Floor, Room No. 136, Known As ‘Calyon Bank’) Vs. 11Th Floor, Hoechst House, Scindia House, N.M. Marg, Nariman Point, Mumbai-400021. Ballard Pier, Mumbai-400038. Pan: Aaccc3872B Appellant) : Respondent)

Section 143(3)

assessee is not supported by the documentary evidence. The fact remains that the assessee has not benchmarked this transaction by considering itself as a tested party. (vi) Assessee has merely considered itself as an administrative service provider. The entire discussion above shows that the transactions of the assessee relate

Credit Agricole Corporate & Investment Bank, Mumbai vs. The Dy.CIT of Income Tax (Internationsl Taxation) -2(1) (1), Mumbai

Accordingly these grounds are dismissed as not pressed

ITA 1234/MUM/2022[2018-19]Status: DisposedITAT Mumbai20 Mar 2025AY 2018-19

Section 143(3)

ADIT (It) 1(2), Mumbai vs. Credit Agricole Corporate and Investment Bank, Mumbai

Accordingly these grounds are dismissed as not pressed

ITA 1839/MUM/2015[2010-11]Status: DisposedITAT Mumbai20 Mar 2025AY 2010-11

Section 143(3)

Reckitt Benckiser India Private Limited, Gurgaon, Haryana vs. D.C.I.T., Circle 11.1, Kolkata

ITA 2319/KOL/2024[2021-2022]Status: DisposedITAT Kolkata18 Mar 2025AY 2021-2022

Bench: Shri Rajesh Kumar & Shri Sonjoy Sarma

For Respondent: Shri Deepak Chopra, AR & Shri Rohan Khare, AR

Section 143(3)Section 144C(13)Section 144C(5)Section 92BSection 92C

IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH KOLKATA BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER & SHRI SONJOY SARMA, JUDICIAL MEMBER

Reckitt Benckiser (India) Pvt. Ltd., Gurgaon vs. D.C.I.T., Circle - 11(1), Kolkata

In the result, the appeals of the assessee are partly allowed for statistical purposes

ITA 1801/KOL/2024[2020-2021]Status: DisposedITAT Kolkata18 Mar 2025AY 2020-2021

Bench: Shri Rajesh Kumar & Shri Sonjoy Sarmaita Nos.78/Kol/2018 Assessment Year: 2013-14 &

For Appellant: Shri Deepak Chopra, AR & Shri Rohan Khare, ARFor Respondent: Shri Guru Bhashyam, CIT, DR

Section 143(3)Section 144CSection 144C(13)Section 144C(5)Section 92BSection 92C

essential to have closer comparability of the products. The broad basket of the products of comparables should be similar to the tested party products. Thus, Ld. TPO was directed to follow this criteria to examine the comparables by verifying their product comparability. In this respect, ld. Counsel for the assessee

Reckitt Benckiser (India) Pvt Ltd., Kolkata vs. DCIT, Circle-12(1), Kolkata

In the result, the appeals of the assessee are partly allowed for statistical purposes

ITA 2631/KOL/2019[2015-16]Status: DisposedITAT Kolkata18 Mar 2025AY 2015-16

Bench: Shri Rajesh Kumar & Shri Sonjoy Sarmaita Nos.78/Kol/2018 Assessment Year: 2013-14 &

For Appellant: Shri Deepak Chopra, AR & Shri Rohan Khare, ARFor Respondent: Shri Guru Bhashyam, CIT, DR

Section 143(3)Section 144CSection 144C(13)Section 144C(5)Section 92BSection 92C