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“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
60
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
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.

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.

Skoda Auto India (P) Ltd. v. ACIT, Aurangabad
30 SOT 319 · 2009 · ITAT
26
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
24
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
23
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
22
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
21
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

Virgo Valves & Controls Ltd, Mumbai vs. DCIT 1(3), Mumbai

ITA 361/MUM/2015[2010-11]Status: DisposedITAT Mumbai08 Mar 2022AY 2010-11
Section 143(3)Section 92C

income of the assessee is to be seen and considered and not effect on the cost or income of the AE. Therefore, the tested party is always the tax payer and not the AE. None of the factors under the Transfer Pricing Regulations require to consider whether the AEs would

Virgo Valves & Controls Ltd, Mumbai vs. DCIT 1(3), Mumbai

ITA 3577/MUM/2014[2008-09]Status: DisposedITAT Mumbai08 Mar 2022AY 2008-09
Section 143(3)Section 92C

income of the assessee is to be seen and considered and not effect on the cost or income of the AE. Therefore, the tested party is always the tax payer and not the AE. None of the factors under the Transfer Pricing Regulations require to consider whether the AEs would

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

said international transactions. The profit level indication (PLI) adopted by the assessee was gross profit/sale and the assessee has made itself tested party for the purpose of international transactions. The TPO rejected the transfer pricing study of the assessee and opined that transactional net margin method was to be applied

Sabmiller India Ltd, Mumbai vs. ACIT Cir 11(1)(2), Mumbai

In the result, appeal of the assessee in ITA No

ITA 7157/MUM/2017[2013-14]Status: DisposedITAT Mumbai24 Feb 2022AY 2013-14
Section 143(3)Section 144C(5)

This transaction was benchmarked by the assessee using Transactional Net M/s. Anheuser Busch InBev India Limited Margin Method (TNMM) considering the AE as the tested party and since the mark-up charge of 3% / 5% was less than the comparables mark-up of 4.35% / 5.40%, the assessee concluded ... contest that the AE is merely a conduit / shell company with no capabilities to render services and hence, could not be considered as the tested party by the assessee for benchmarking and determining the ALP of the impugned transaction of payment of management fees. The ld. DR vehemently argued

M/S Ul India Pvt. Ltd., Bangalore vs. DCIT, Bangalore

In the result, appeal of the Assessee is partly allowed

ITA 655/BANG/2016[2011-12]Status: DisposedITAT Bangalore24 Feb 2022AY 2011-12

Bench: Shri N.V. Vasudevan & Shri B. R. Baskaranit(Tp)A No.574/Bang/2015 Assessment Year : 2010-11 M/S. Ul India Pvt. Ltd., Vs. The Deputy Commissioner Of Income Tax, Kalyani Platina – Block I, 3Rd Floor, 24, Epip Circle -7(1)(1), Zone, Phase – 2Nd, Whitefield, Bengaluru. Bengaluru – 560 066. Pan : Aaacu 2468 F Appellant Respondent It(Tp)A No.378/Bang/2015 Assessment Year : 2010-11 The Deputy Commissioner Of Income Tax, Vs. M/S. Ul India Pvt. Ltd., Circle -7(1)(1), Bengaluru – 560 066. Bengaluru. Pan : Aaacu 2468 F Appellant Respondent C.O.No.127/Bang/2015 (In It(Tp)A No.378/Bang/2015) Assessment Year : 2010-11 The Deputy Commissioner Of Income Tax, Vs. M/S. Ul India Pvt. Ltd., Circle -7(1)(1), Bengaluru – 560 066. Bengaluru. Pan : Aaacu 2468 F Cross Objector Respondent It(Tp)A No.655/Bang/2016 Assessment Year : 2011-12 M/S. Ul India Pvt. Ltd., Vs. The Deputy Commissioner Of Income Tax, Bengaluru – 560 066. Circle -7(1)(1), Pan : Aaacu 2468 F Bengaluru. Appellant Respondent

For Appellant: Shri. K. R. Vasudevan, AdvocateFor Respondent: Shri. Sumer Singh Meena, CIT(DR)(ITAT), Bengaluru
Section 143(3)Section 144C(13)Section 92Section 92C

Rules, 1962 (‘the IT Rules’ for short), provides that an adjustment ought to be provided for any differences in the economic factors between the tested party and the comparables. A working capital adjustment is one such adjustment which is to be applied in order to adjust for the differences between ... working capital positions of the tested party and of the comparable. The IT Rules do not provide for any cap or upper limit to such adjustments. This position under the Act and the IT Rules is also evident from the OECD Guidelines. Further, there was no basis

Ul India Private Limited, Bangalore vs. DCIT, Bangalore

In the result, appeal of the Assessee is partly allowed

ITA 574/BANG/2015[2010-11]Status: DisposedITAT Bangalore24 Feb 2022AY 2010-11

Bench: Shri N.V. Vasudevan & Shri B. R. Baskaranit(Tp)A No.574/Bang/2015 Assessment Year : 2010-11 M/S. Ul India Pvt. Ltd., Vs. The Deputy Commissioner Of Income Tax, Kalyani Platina – Block I, 3Rd Floor, 24, Epip Circle -7(1)(1), Zone, Phase – 2Nd, Whitefield, Bengaluru. Bengaluru – 560 066. Pan : Aaacu 2468 F Appellant Respondent It(Tp)A No.378/Bang/2015 Assessment Year : 2010-11 The Deputy Commissioner Of Income Tax, Vs. M/S. Ul India Pvt. Ltd., Circle -7(1)(1), Bengaluru – 560 066. Bengaluru. Pan : Aaacu 2468 F Appellant Respondent C.O.No.127/Bang/2015 (In It(Tp)A No.378/Bang/2015) Assessment Year : 2010-11 The Deputy Commissioner Of Income Tax, Vs. M/S. Ul India Pvt. Ltd., Circle -7(1)(1), Bengaluru – 560 066. Bengaluru. Pan : Aaacu 2468 F Cross Objector Respondent It(Tp)A No.655/Bang/2016 Assessment Year : 2011-12 M/S. Ul India Pvt. Ltd., Vs. The Deputy Commissioner Of Income Tax, Bengaluru – 560 066. Circle -7(1)(1), Pan : Aaacu 2468 F Bengaluru. Appellant Respondent

For Appellant: Shri. K. R. Vasudevan, AdvocateFor Respondent: Shri. Sumer Singh Meena, CIT(DR)(ITAT), Bengaluru
Section 143(3)Section 144C(13)Section 92Section 92C

Rules, 1962 (‘the IT Rules’ for short), provides that an adjustment ought to be provided for any differences in the economic factors between the tested party and the comparables. A working capital adjustment is one such adjustment which is to be applied in order to adjust for the differences between ... working capital positions of the tested party and of the comparable. The IT Rules do not provide for any cap or upper limit to such adjustments. This position under the Act and the IT Rules is also evident from the OECD Guidelines. Further, there was no basis

DCIT, Bangalore vs. M/S U.L. India Pvt. Ltd., Bangalore

In the result, appeal of the Assessee is partly allowed

ITA 378/BANG/2015[2010-11]Status: DisposedITAT Bangalore24 Feb 2022AY 2010-11

Bench: Shri N.V. Vasudevan & Shri B. R. Baskaranit(Tp)A No.574/Bang/2015 Assessment Year : 2010-11 M/S. Ul India Pvt. Ltd., Vs. The Deputy Commissioner Of Income Tax, Kalyani Platina – Block I, 3Rd Floor, 24, Epip Circle -7(1)(1), Zone, Phase – 2Nd, Whitefield, Bengaluru. Bengaluru – 560 066. Pan : Aaacu 2468 F Appellant Respondent It(Tp)A No.378/Bang/2015 Assessment Year : 2010-11 The Deputy Commissioner Of Income Tax, Vs. M/S. Ul India Pvt. Ltd., Circle -7(1)(1), Bengaluru – 560 066. Bengaluru. Pan : Aaacu 2468 F Appellant Respondent C.O.No.127/Bang/2015 (In It(Tp)A No.378/Bang/2015) Assessment Year : 2010-11 The Deputy Commissioner Of Income Tax, Vs. M/S. Ul India Pvt. Ltd., Circle -7(1)(1), Bengaluru – 560 066. Bengaluru. Pan : Aaacu 2468 F Cross Objector Respondent It(Tp)A No.655/Bang/2016 Assessment Year : 2011-12 M/S. Ul India Pvt. Ltd., Vs. The Deputy Commissioner Of Income Tax, Bengaluru – 560 066. Circle -7(1)(1), Pan : Aaacu 2468 F Bengaluru. Appellant Respondent

For Appellant: Shri. K. R. Vasudevan, AdvocateFor Respondent: Shri. Sumer Singh Meena, CIT(DR)(ITAT), Bengaluru
Section 143(3)Section 144C(13)Section 92Section 92C

Rules, 1962 (‘the IT Rules’ for short), provides that an adjustment ought to be provided for any differences in the economic factors between the tested party and the comparables. A working capital adjustment is one such adjustment which is to be applied in order to adjust for the differences between ... working capital positions of the tested party and of the comparable. The IT Rules do not provide for any cap or upper limit to such adjustments. This position under the Act and the IT Rules is also evident from the OECD Guidelines. Further, there was no basis

DCIT 7(1)(1), Mumbai vs. Goldman Sachs (India) Securities P.Tl, Mumbai

In the result, appeal of the Revenue is dismissed

ITA 1546/MUM/2015[2010-11]Status: DisposedITAT Mumbai17 Feb 2022AY 2010-11

Bench: Mrs. Diva Singh & Shri Rifaur Rahmangoldman Sachs (India) Dy.Cit-7(1)(1), Securities Pvt. Ltd. Room No. 522, Aayakar Bhavan, 951 A, Rational House, Vs M.K. Road, Mumbai-400020. Appasaheb Marathe Marg, Prabhadevi, Mumbai-400025. Pan: Aafca6819F अपीलाथ"/Appellant ""यथ"/Respondent & Dy.Cit-7(1)(1), Goldman Sachs (India) Securities Room No. 522, Aayakar Pvt. Ltd. Bhavan, Vs 951 A, Rational House, M.K. Road, Mumbai-400020. Appasaheb Marathe Marg, Prabhadevi, Mumbai-400025. Pan: Aafca6819F अपीलाथ"/Appellant ""यथ"/Respondent Assessee By : Sh. Percy J. Pardiwalla, Sr. Advocate Sh. M. Aggarwal, Advocate Revenue By : Sh. Yogesh Kamat, Cit-Dr Date Of Hearing : 25.11.2021 Date Of Pronouncement : 17.02.2022

For Appellant: Sh. Percy J. Pardiwalla, Sr. AdvocateFor Respondent: Sh. Yogesh Kamat, CIT-DR
Section 133Section 143(3)Section 144C(13)

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “K”, MUMBAI BEFORE MRS. DIVA SINGH, JUDICIAL MEMBER & SHRI RIFAUR RAHMAN, ACCOUNTANT

Goldman Sachs (India) Securities P.Ltd, Mumbai vs. DCIT RG 7(1)(1), Mumbai

In the result, appeal of the Revenue is dismissed

ITA 1115/MUM/2015[2010-11]Status: DisposedITAT Mumbai17 Feb 2022AY 2010-11

Bench: Mrs. Diva Singh & Shri Rifaur Rahmangoldman Sachs (India) Dy.Cit-7(1)(1), Securities Pvt. Ltd. Room No. 522, Aayakar Bhavan, 951 A, Rational House, Vs M.K. Road, Mumbai-400020. Appasaheb Marathe Marg, Prabhadevi, Mumbai-400025. Pan: Aafca6819F अपीलाथ"/Appellant ""यथ"/Respondent & Dy.Cit-7(1)(1), Goldman Sachs (India) Securities Room No. 522, Aayakar Pvt. Ltd. Bhavan, Vs 951 A, Rational House, M.K. Road, Mumbai-400020. Appasaheb Marathe Marg, Prabhadevi, Mumbai-400025. Pan: Aafca6819F अपीलाथ"/Appellant ""यथ"/Respondent Assessee By : Sh. Percy J. Pardiwalla, Sr. Advocate Sh. M. Aggarwal, Advocate Revenue By : Sh. Yogesh Kamat, Cit-Dr Date Of Hearing : 25.11.2021 Date Of Pronouncement : 17.02.2022

For Appellant: Sh. Percy J. Pardiwalla, Sr. AdvocateFor Respondent: Sh. Yogesh Kamat, CIT-DR
Section 133Section 143(3)Section 144C(13)

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “K”, MUMBAI BEFORE MRS. DIVA SINGH, JUDICIAL MEMBER & SHRI RIFAUR RAHMAN, ACCOUNTANT

Deputy Commissioner of Income Tax, Circle- 2(1)(1), Bangalore vs. M/S. 24/7 Customer Private Limited, Bangalore

In the result, the appeal by the revenue is dismissed

ITA 2328/BANG/2019[2004-05]Status: DisposedITAT Bangalore17 Feb 2022AY 2004-05

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Dr. Manjunath Karkihalli, CIT(DR), ITAT, BengaluruFor Respondent: Smt. Shashim Kapila, Advocate

rates of depreciation is different vis-à-vis the comparable companies. Further as regards whether adjustment should be made in the hands of the tested party i.e., the assessee or the comparable companies, the Mumbai Tribunal decision in the case of Pangea3 & Legal Database Systems ... where rates of depreciation were different in case of assessee and comparable companies, Rule 10B(1) permits an adjustment in the hands of the tested party also and depreciation adjustment has to be allowed. 3. Being so, the CIT(Appeals) followed the ratio laid down by the above decisions

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

overall management of Pringles business in India and on the other hand, Singapore AE, being the least complex entity , was selected as the tested party for benchmarking the international transaction of import of finished goods. The assessee conducted a search in the Asia Pacific region to identify manufacturers and based ... assessee was arrived at 54.48%. 3.2. The ld TPO disregarded the benchmarking approach adopted by the assessee and selected the Indian entity as the tested party. Further, the ld TPO considered Transactional Net Margin Method (TNMM) as the Most 8 M/s. Kellogg India Private Limited Appropriate Method

Ibm India Private Limited, Bangalore vs. Deputy Commissioner of Income Tax, Circle-3(1)(1), Bangalore

In the result, appeal by the assessee stands allowed as indicated hereinabove

ITA 289/BANG/2021[2015-16]Status: DisposedITAT Bangalore14 Feb 2022AY 2015-16

Bench: Shri. B.R. Baskaran & Smt. Beena Pillaiit(Tp)A No. 289/Bang/2021 Assessment Year : 2015-16 M/S. Ibm India Pvt. Ltd., The Deputy No. 12, Subramanya Commissioner Of Arcade, Income-Tax, Bannerghatta Road, Circle 3 (1)(1), Bangalore – 560 029. Vs. Bangalore. Pan: Aaaci4403L Appellant Respondent Assessee By : Shri Ajay Roti, Ca Revenue By : Shri Pradeep Kumar, Cit Dr Date Of Hearing : 12-01-2022 Date Of Pronouncement : 14-02-2022 Order Per Beena Pillaipresent Appeal By The Assessee Has Been Filed By Assessee Against The Final Assessment Order Dated 30.04.2021 U/S. 143(3) R.W.S. 144C(13) R.W.S. 144B Of The Act Passed By The National Faceless Assessment Centre, Delhi Relating To Assessment Year 2015-16 On Following Grounds Of Appeal: “The Grounds Stated Hereunder Are Independent Of & Without Prejudice To One Another. The Appellant Submits As Under: 1. Assessment Order Bad In Law 1.1. At The Outset, M/S Ibm India Private Limited (Hereinafter Referred To As 'The Appellant' Or 'The Company') Prays That The Order Dated April 30. 2021

For Appellant: Shri Ajay Roti, CAFor Respondent: Shri Pradeep Kumar, CIT DR
Section 10ASection 143(3)Section 144BSection 144C(13)

consonance with Rule 10B(1)(e), which mandates only arriving at the net profit margin by comparing the profits and loss account of the tested party with the comparable. The TNM Method proceeds on the assumption that functions, assets and risk being broadly similar and once suitable adjustments have been

Bharat Vijaykumar Jain (HUF), Bangalore vs. Deputy Commissioner of Income Tax, Central Circle- 2(2), Bangalore

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

ITA 246/BANG/2021[2016-17]Status: DisposedITAT Bangalore14 Feb 2022AY 2016-17

Bench: Shri George George K & Ms. Padmavathy S

For Appellant: Shri Narendra Kumar Jain, AdvocateFor Respondent: Shri Muzaffar Hussain, CIT(DR)
Section 139(1)Section 143(2)Section 143(3)Section 234BSection 92C

adjustment is an attempt to adjust for the differences in time value of money between the IT(TP)A No.246/Bang/2021 Page 14 of 22 tested party and potential comparables, with an assumption that the difference should be reflected in profits. The underlying reasoning is that: ♦ A company will need funding ... factors have to be kept in mind (i) The point in time at which the Receivables, Inventory and Payables should be compared between the tested party and the comparables, whether it should be the figures of receivables, inventory and payable at the year end or beginning of the year

M/S. Ibm India Private Limited, Bangalore vs. Joint Commissioner of Income Tax, Special Range - 4, Bangalore

In the result, appeal by the assessee for A

ITA 1016/BANG/2019[2014-15]Status: DisposedITAT Bangalore14 Feb 2022AY 2014-15

Bench: Shri. Chandra Poojari & Smt. Beena Pillaiit(Tp)A No. 625/Bang/2017 Assessment Year : 2012-13 M/S. Ibm India Pvt. Ltd., The Assistant No. 12, Subramanya Commissioner Of Arcade, Income-Tax, Bannerghatta Road, Circle 3 (1)(1), Bangalore – 560 029. Vs. Bangalore. Pan: Aaaci4403L Appellant Respondent & It(Tp)A No. 1016/Bang/2019 Assessment Year : 2014-15 M/S. Ibm India Pvt. Ltd., The Joint No. 12, Subramanya Commissioner Of Arcade, Income-Tax, Bannerghatta Road, Special Range-4, Bangalore – 560 029. Vs. Bangalore. Pan: Aaaci4403L Appellant Respondent Assessee By : Shri Ajay Roti, Ca : Shri K.V. Arvind, Standing Revenue By Counsel Date Of Hearing : 03-02-2022 Date Of Pronouncement : 14-02-2022

For Appellant: Shri Ajay Roti, CA
Section 10ASection 143(3)Section 144C(13)

consonance with Rule 10B(1)(e), which mandates only arriving at the net profit margin by comparing the profits and loss account of the tested party with the comparable. The TNM Method proceeds on the assumption that functions, assets and risk being broadly similar and once suitable adjustments have been

M/S. Ibm India Private Limited, Bangalore vs. Assistant Commissioner of Income-Tax, Bangalore

In the result, appeal by the assessee for A

ITA 625/BANG/2017[2012-13]Status: DisposedITAT Bangalore14 Feb 2022AY 2012-13

Bench: Shri. Chandra Poojari & Smt. Beena Pillaiit(Tp)A No. 625/Bang/2017 Assessment Year : 2012-13 M/S. Ibm India Pvt. Ltd., The Assistant No. 12, Subramanya Commissioner Of Arcade, Income-Tax, Bannerghatta Road, Circle 3 (1)(1), Bangalore – 560 029. Vs. Bangalore. Pan: Aaaci4403L Appellant Respondent & It(Tp)A No. 1016/Bang/2019 Assessment Year : 2014-15 M/S. Ibm India Pvt. Ltd., The Joint No. 12, Subramanya Commissioner Of Arcade, Income-Tax, Bannerghatta Road, Special Range-4, Bangalore – 560 029. Vs. Bangalore. Pan: Aaaci4403L Appellant Respondent Assessee By : Shri Ajay Roti, Ca : Shri K.V. Arvind, Standing Revenue By Counsel Date Of Hearing : 03-02-2022 Date Of Pronouncement : 14-02-2022

For Appellant: Shri Ajay Roti, CA
Section 10ASection 143(3)Section 144C(13)

consonance with Rule 10B(1)(e), which mandates only arriving at the net profit margin by comparing the profits and loss account of the tested party with the comparable. The TNM Method proceeds on the assumption that functions, assets and risk being broadly similar and once suitable adjustments have been

M/S Toyota Kirloskar Auto Parts Pvt Ltd, Bangalore vs. Assistant Commissioner of Income Tax Ltu Circle-1, Bangalore

In the result, the appeal in IT(TP)A No

ITA 1364/BANG/2017[2012-13]Status: DisposedITAT Bangalore10 Feb 2022AY 2012-13

Bench: Shri George George K, Jm & Ms.Padmavathy S, Am It(Tp)A No.1714/Bang/2016 : Asst.Year 2012-2013 It(Tp)A No.1364/Bang/2017 : Asst.Year 2012-2013 M/S.Toyota Kirloskar Auto Parts The Assistant Commissioner Private Limited Of Income-Tax, Ltu, Circle-1 V. Plot No.21, Bidadi Industrial Area Bangalore. Bidadi, Ramangara District – 562 109. Pan : Aabct5590Q. (Appellant) (Respondent) Appellant By : Sri.K.R.Vasudevan, Advocate Respondent By : Sri.Muzaffar Hussain, Cit-Dr Date Of Pronouncement : 10.02.2022 Date Of Hearing : 09.02.2022 O R D E R Per George George K, Jm : These Appeals At The Instance Of The Assessee Are Directed Against Two Orders Of The Assessing Officer. The It(T)A No.1714/Bang/2016 Arises Out Of A.O’S Order Passed U/S 143(3) R.W.S. 144C Of The I.T.Act, (Order Dated 29.07.2016). The It(Tp)A No.1364/Bang/2017 Arises Out Of The A.O.’S Order Passed U/S 154 (Order Dated 31.01.2011). The A.O. After Passing The Order U/S 143(3) Of The Act, Passed Rectification Order U/S 154 Of The Act Giving Effect To The Order Passed By The Transfer Pricing Officer (Tpo) In Determining The Transfer Pricing (Tp) Adjustment From Rs.37,24,00,000, To Rs.39,13,10,000, Hence Two Appeals Are Filed By The Assessee. The Relevant Assessment Year Is 2012-2013. 2 It(Tp)A Nos.1714/B/2016 & 1364/Bang/2017 M/S.Toyota Kirloskar Auto Parts Private Limited. 2. The Grounds Raised For Both The Appeals Are Identical. The Assessee Has Also Filed Additional Ground Vide Letter Dated 27.11.2021.The Additional Grounds Are Essentially, Shades Of Grounds Raised In Form No.36. The Additional Grounds Are Legal Grounds Supported By Judicial Pronouncements & Does Not Require Examination Of New Facts Other Than On Record. Hence, The Additional Grounds Raised Are Taken On Record For Adjudication. We Shall First Adjudicate It(Tp)A No.1714/Bang/2016 Arising Out Of The Order Of The A.O. Passed U/S 143(3) R.W.S. 144C Of The I.T.Act.

For Appellant: Sri.K.R.Vasudevan, AdvocateFor Respondent: Sri.Muzaffar Hussain, CIT-DR
Section 143(2)Section 143(3)Section 154Section 234BSection 92C

page 5 and 6 of the TPO’s order) for the following reasons :- (i) Adjustment has been made on comparable and not on the tested party. (ii) Company is already 10 years old and there is no logic in giving such adjustment in the 10th year of operation. However ... capacity utilization adjustment shall be granted. It was further held by the Tribunal that in absence of details, adjustment can be made on the tested party also. 8 IT(TP)A Nos.1714/B/2016 & 1364/Bang/2017 M/s.Toyota Kirloskar Auto Parts Private Limited. 7.4 For the aforesaid reasons, we are of the view that

M/S.Toyota Kirloskar Auto Parts Pvt. Ltd., Ramanagar vs. Assistant Commissioner of Income-Tax, Bangalore

In the result, the appeal in IT(TP)A No

ITA 1714/BANG/2016[2012-13]Status: DisposedITAT Bangalore10 Feb 2022AY 2012-13

Bench: Shri George George K, Jm & Ms.Padmavathy S, Am It(Tp)A No.1714/Bang/2016 : Asst.Year 2012-2013 It(Tp)A No.1364/Bang/2017 : Asst.Year 2012-2013 M/S.Toyota Kirloskar Auto Parts The Assistant Commissioner Private Limited Of Income-Tax, Ltu, Circle-1 V. Plot No.21, Bidadi Industrial Area Bangalore. Bidadi, Ramangara District – 562 109. Pan : Aabct5590Q. (Appellant) (Respondent) Appellant By : Sri.K.R.Vasudevan, Advocate Respondent By : Sri.Muzaffar Hussain, Cit-Dr Date Of Pronouncement : 10.02.2022 Date Of Hearing : 09.02.2022 O R D E R Per George George K, Jm : These Appeals At The Instance Of The Assessee Are Directed Against Two Orders Of The Assessing Officer. The It(T)A No.1714/Bang/2016 Arises Out Of A.O’S Order Passed U/S 143(3) R.W.S. 144C Of The I.T.Act, (Order Dated 29.07.2016). The It(Tp)A No.1364/Bang/2017 Arises Out Of The A.O.’S Order Passed U/S 154 (Order Dated 31.01.2011). The A.O. After Passing The Order U/S 143(3) Of The Act, Passed Rectification Order U/S 154 Of The Act Giving Effect To The Order Passed By The Transfer Pricing Officer (Tpo) In Determining The Transfer Pricing (Tp) Adjustment From Rs.37,24,00,000, To Rs.39,13,10,000, Hence Two Appeals Are Filed By The Assessee. The Relevant Assessment Year Is 2012-2013. 2 It(Tp)A Nos.1714/B/2016 & 1364/Bang/2017 M/S.Toyota Kirloskar Auto Parts Private Limited. 2. The Grounds Raised For Both The Appeals Are Identical. The Assessee Has Also Filed Additional Ground Vide Letter Dated 27.11.2021.The Additional Grounds Are Essentially, Shades Of Grounds Raised In Form No.36. The Additional Grounds Are Legal Grounds Supported By Judicial Pronouncements & Does Not Require Examination Of New Facts Other Than On Record. Hence, The Additional Grounds Raised Are Taken On Record For Adjudication. We Shall First Adjudicate It(Tp)A No.1714/Bang/2016 Arising Out Of The Order Of The A.O. Passed U/S 143(3) R.W.S. 144C Of The I.T.Act.

For Appellant: Sri.K.R.Vasudevan, AdvocateFor Respondent: Sri.Muzaffar Hussain, CIT-DR
Section 143(2)Section 143(3)Section 154Section 234BSection 92C

page 5 and 6 of the TPO’s order) for the following reasons :- (i) Adjustment has been made on comparable and not on the tested party. (ii) Company is already 10 years old and there is no logic in giving such adjustment in the 10th year of operation. However ... capacity utilization adjustment shall be granted. It was further held by the Tribunal that in absence of details, adjustment can be made on the tested party also. 8 IT(TP)A Nos.1714/B/2016 & 1364/Bang/2017 M/s.Toyota Kirloskar Auto Parts Private Limited. 7.4 For the aforesaid reasons, we are of the view that

Neogenetics Foods Private Limited, Bangalore vs. The Deputy Commissioner of Income Tax, Circle-3(1)(1), Bangalore

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

ITA 361/BANG/2021[2016-17]Status: DisposedITAT Bangalore07 Feb 2022AY 2016-17

Bench: Shri N. V. Vasudevan & Shri B. R. Baskaranit(Tp)A No.361/Bang/2021 Assessment Year : 2016-17 M/S. Neogenetics Foods Private Limited, Vs. Dcit, Level 14 & 15, Concorde Towers, Ub City, 1 Circle - 3(1)(1), Vittal Malya Road, Ub City, Bengaluru. Bengaluru – 560 001. Pan : Aadcn 7689 L Assessee Respondent Assessee By : Shri. Narendra Kumar Jain, Advocate Revenue By : Dr. Manjunath Karkihalli, Cit(Dr)(Itat), Bengaluru Date Of Hearing : 03.02.2022 Date Of Pronouncement : 07.02.2022 O R D E R Per N V Vasudevan

For Appellant: Shri. Narendra Kumar Jain, AdvocateFor Respondent: Dr. Manjunath Karkihalli, CIT(DR)(ITAT), Bengaluru
Section 144CSection 92BSection 92C

NIPL from third parties. 2 Purchase of 155,56,30,968 TNMM The assessee has considered its Finished Goods related party NIPL as a tested party for trading segment. The margin earned by NIPL is lower when compared to margin earned by 3rd parties and therefore purchase price ... expenses Method therefore at arm’s length. With respect to purchase of finished goods, the assessee in its TP study had selected NIPL as tested party. This was for the reason that database do not contain any companies, which are engaged in trading of animal feeds and only comparables engaged

Aurigo Software Technologies Private Limited, Bengaluru vs. Income Tax Officer, Ward-1(1)(1), Bangalore

In the result, the appeal by the Assessee is partly allowed

ITA 178/BANG/2021[2016-17]Status: DisposedITAT Bangalore03 Feb 2022AY 2016-17

Bench: Shri N. V. Vasudevan & Shri B. R. Baskaranit(Tp)A No.178/Bang/2021 Assessment Year : 2016-17 M/S. Aurigo Software Technologies Private Limited, Vs. Ito, Ajmera Aditya Summit, No.3D1, Ground Floor, Ward-1(1)(1), 7Th C Main Road, 3Rd Block, Koramangala, Bengaluru. Bengaluru – 560 034. Pan : Aacca 5309 D Assessee Respondent Assessee By : Shri. K. R. Vasudevan, Advocate Revenue By : Dr. Manjunath Karkihalli, Cit(Dr)(Itat), Bengaluru Date Of Hearing : 03.02.2022 Date Of Pronouncement : 03.02.2022 O R D E R Per N V Vasudevan

For Appellant: Shri. K. R. Vasudevan, AdvocateFor Respondent: Dr. Manjunath Karkihalli, CIT(DR)(ITAT), Bengaluru
Section 143(3)Section 144C(13)Section 92Section 92(1)Section 92B(1)

types of inventory) 2. Making a working capital adjustment is an attempt to adjust for the differences in time value of money between the tested party and potential comparables, with an assumption that the difference should be reflected in profits. The underlying reasoning is that:  A company will need funding ... factors have to be kept in mind (i) The point in time at which the Receivables, Inventory and Payables should be compared between the tested party and the comparables, whether it should be the figures of receivables, IT(TP)A No.178/Bang/2021 Page 18 of 19 inventory and payable

Deputy Commissioner of Income Tax Circle-7(1)(1), Bangalore vs. M/S Timken Engineering & Research India Private Limited, Bangalore

In the result, the appeal and cross objection filed by the assessee and the appeal of the revenue are treated as partly allowed for statistical purposes

ITA 694/BANG/2019[2011-12]Status: DisposedITAT Bangalore31 Jan 2022AY 2011-12

Bench: Shri George George K. & Shri B.R. Baskaranassessment Year:2011-12

For Appellant: Sri Aliasghar Rampurawala, A.RFor Respondent: Sri Pradeep Kumar, D.R

Transfer Pricing Method for the covered transactions shall be the Transactional Net Margin Method (hereinafter referred to as “TNMM”) within the Applicant as the tested party and operating profit margin as Profit Level indicator (PLI). Recovery of service pay is included in “operating expense; and hence it will get benchmarked