“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

Highradius Technologies Private Limited, Hyderabad vs. Deputy Commissioner of Income Tax, Circle -2(1), Hyderabad

ITA 436/HYD/2024[2020-21]Status: HeardITAT Hyderabad12 Nov 2025AY 2020-21

Bench: Us:

Section 143(1)Section 143(3)Section 144B

bodies rendered for some other year, as the business and economic factors are dynamic and different in each year both in the case of tested party and comparables. 2.5.4.3 The issue is well settled that simply because a comparable has been. included or excluded in some year that action

Concur Technologies (India) Private Limited, Bangalore vs. Assistant Commissioner of Income Tax Circle 2(2)(1), Bangalore

Appeal of the assessee is partly allowed as indicated above

ITA 2550/BANG/2024[2021-22]Status: DisposedITAT Bangalore11 Nov 2025AY 2021-22

Bench: Shri Prashant Maharishi & Shri Soundararajan K.Assessment Year : 2021-22

For Appellant: Shri Chavali Narayan, CAFor Respondent: Dr Divya K J, CIT(DR)(ITAT), Bengaluru

Section 144Section 144BSection 144C

rates and taxes, bad debts, provision for bad debts, interest on lease liability' as non-operating in nature while computing the operating margins of tested party and comparable companies. 6. The learned TP01 AO erred in law and in facts by incorrectly applying the following quantitative and qualitative filters

Ecoenergy Insights Ltd ( Formerly Known As Chubb Alba Control Systems P.Ltd), New Delhi vs. DCIT, Circle-4(2), New Delhi

In the result, the appeal filed by the assessee is partly allowed as indicated above

ITA 2321/DEL/2022[2018-19]Status: DisposedITAT Delhi10 Nov 2025AY 2018-19

Bench: Shri S. Rifaur Rahman & Shri Anubhav Sharmaecoenergy Insights Ltd., Vs. Dcit, (Formerly Known As Chubb Alba Control Circle 4 (2), Systems P. Ltd.), New Delhi. Ground Floor, 18, Netaji Subhash Marg, Daryaganj, New Delhi – 110 002. (Pan :Aaaca0031C) (Appellant) (Respondent) Assessee By : Shri Nageshwar Rao, Advocate Shri Parth, Advocate Shri Pratik Rath, Advocate Revenue By : Shri S.K. Jadhav, Cit Dr Date Of Hearing : 12.08.2025 Date Of Order : 10.11.2025 O R D E R Per S. Rifaur Rahman: 1. This Appeal Preferred By The Assessees Is Directed Against The Assessment Order Dated 25.07.2022Passed By The Assessment Unit, Income Tax Department Under Section 147 Read With Section 144C(13) R.W.S. 144B Of The Income-Tax Act, 1961 (For Short ‘The Act”) For Ay 2018-19 Pursuant To The Directions Of The Dispute Resolution Panel U/S 144C(5) Of The Act.

For Appellant: Shri Nageshwar Rao, AdvocateFor Respondent: Shri S.K. Jadhav, CIT DR

Section 143(2)Section 144C(13)Section 144C(5)Section 147Section 92C

filters besides the accepted one to zero-i. on final set of comparables for selecting suitable and functionally similar comparables to that of the tested party so as to benchmark tae international transaction. The Panel is of the view that the benchmarking has been done correctly and no inter-reference ... page 74 (para 5.2) to page 86 (Para 5.3.5) of paper book. It will kindly be noticed that Appellant chose foreign AE as tested party and TNMM as MAM. Identified comparable companies and established that transactions are at arm’s length. After routinely noting Appellant’s detailed submissions

Weg Industries (India) Private Limited, Bengaluru vs. Assessing Officer, Bmtc Building

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

ITA 2501/BANG/2024[2021-22]Status: DisposedITAT Bangalore28 Oct 2025AY 2021-22

Bench: Shri Prashant Maharishi & Shri Keshav Dubeyassessment Year : 2021-22

For Respondent: Shri Sumeet Khurana , CA

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

circumstances of the case and in law the Ld. AO/ Ld. Page 4 of 20 TPO has erred in computing the margin of tested party by considering duty drawback as non-operating income. 8. Without prejudice to ground number 4, on the facts and circumstances of the case ... there was a loss of (-) 4.18% and overall operating margin was negative at (-) 1.24%. In the TPSR the assessee selected itself as a tested party, combined all other transactions together and adopted Transactional net margin Method [ TNMM ] as the most appropriate method selecting the PLI of OP/OC and internal TNMM

Netflix Entertainment Services India LLP, Mumbai vs. Deputy Commissioner of Income Tax- Circle 23(1), Mumbai

In the result, appeal of the assessee is partly

ITA 6857/MUM/2024[2021-22]Status: DisposedITAT Mumbai17 Oct 2025AY 2021-22

Section 143(3)Section 144C(5)Section 234ASection 270ASection 40

Guidelines 2.59 accord primacy to functional comparability where product or market comparables are unavailable. A method that reasonably reflects the economic reality of the tested party cannot be rejected merely because the industry label differs. Consistently, this Tribunal in various cases viz., Turner International India (P.) Ltd. (95 taxmann.com ... contemporaneous, unsigned, and economically dissimilar some relate to film-library sales and others to franchise or app-deployment rights. None share the tested party's limited- risk distribution profile. 105. The DRP's confirmation of this "Other Method" compounds the error. Instead of testing comparability, it devised

Michael Page International Recruitment Pvt Ltd, Mumbai vs. DCIT Circle 14(1)(1), Mumbai

ITA 6748/MUM/2024[2021-22]Status: DisposedITAT Mumbai16 Oct 2025AY 2021-22

Section 143(3)Section 144BSection 144C(13)Section 144C(5)Section 153Section 37Section 41Section 92D

Assessee to AEs were at arm's length. Before the TPO, the Assessee relied upon primary benchmarking study where AEs were considered as tested party; and Transactional Net Margin Method (TNMM) were considered as a Most Appropriate Method with Operating Profit to Total Operating Cost as Profit Level Indicator ... Assessee also provide corroborative benchmarking taking the Assessee as the tested party; TNMM as the Most Appropriate Method with Operating Profits to Sales as PLI. However, the TPO, not being convinced. Rejecting the contentions of the Assessee, the TPO concluded that the Assessee had not been able to substantiate

Thyssenkrupp Industrial Solutions Ag, Mumbai vs. Deputy Commissioner of Income Tax Transfer Pricing Circle -4(2)(2), Mumbai

In the result, the appeal of the assessee is allowed

ITA 3621/MUM/2024[2016-17]Status: DisposedITAT Mumbai15 Oct 2025AY 2016-17

Bench: Shri Sandeep Gosain & Shri Prabhash Shankarthyssenkrupp Industrial V/S. Deputy Commissioner Of Solutions Ag बनाम Income Tax,Transfer Pricing C/O Mohinder Puri & Co., 1A- Circle – 4(2)(2), Air India D, Vandhna Building, 11 Building, Nariman Point, Tolstoy Marg, New Delhi – Mumbai–400021, Maharashtra 110 001 स्थायी लेखा सं./जीआइआर सं./Pan/Gir No: Aafcp5301B Appellant/अपीलार्थी .. Respondent/प्रतिवादी

For Appellant: Shri Nishant Thakkar & Ms. J.Amalsadwala,ARsFor Respondent: Shri Pravin Salunkhe, (Sr. DR)

Section 271GSection 273BSection 92DSection 92D(1)Section 92D(3)

book submitted.It appears that the TPO/CIT(A) have taken an exception to the method of benchmarking which effectively takes the Indian AE as the tested party and consequently adopts the benchmarking carried out by the Indian AE (Flip Side method/approach).In this regard, it is argued that penalty under section

Schneider Electric Private Limited, Delhi vs. Deputy Commissioner of Income Tax, Circle 22(2), C. R. Building, Delhi

The appeal is allowed partly

ITA 5589/DEL/2024[2021-22]Status: DisposedITAT Delhi15 Oct 2025AY 2021-22

Bench: Shri Anubhav Sharma & Shri Manish Agarwalassessment Year: 2021-22 Schneider Electric Private Vs Dcit, Limited, Circle 22(2), C-56, Mayapuri Industrial Area, Delhi. Phase-2, West Delhi, Delhi – 110 064. Pan: Abacs1671F (Appellant) (Respondent) Assessee By : Shri Rohit Tiwari, Advocate & Ms Tanya, Advocate. Revenue By : Shri S.K. Jadhav, Cit-Dr Date Of Hearing : 20.08.2025 Date Of Pronouncement : 15.10.2025 Order Per Anubhav Sharma, Jm: This Appeal Is Preferred By The Assessee Against The Final Assessment Order Dated 28.10.2024 Passed By The Assessment Unit, Income-Tax Department (Hereinafter Referred To As The Ld. Ao) U/S 143(3) R.W.S. 144C(13) R.W.S. 144B Of The Income Tax Act, 1961 (Hereinafter Referred To As ‘The Act’) For Ay 2021-22. 2. Heard & Perused The Records. On The Basis Of Submission & Material On Record It Comes Up That Assesse/ Appellant (Sepl) Was Incorporated In 2018 As A Subsidiary Of Schneider Electric Industries Sas (A Wholly Owned Subsidiary Of Schneider Electric Se) & Belgium. It Is A Private Limited Company

For Appellant: Shri Rohit Tiwari, Advocate &For Respondent: Shri S.K. Jadhav, CIT-DR

Section 143(3)

Learned Transfer Pricing Officer (“Ld. TPO”) in the TP order giving effect to DRP directions has been presented in table below: Profit Level Tested party Arm’s length S. Nature of international Adjustment in Method applied Indicator margin as margin as per No. transactions/ disallowance ... under section 92C of the Act. It was submitted that once working capital adjustment is granted to the Appellant and the margin of the tested party is within the arm’s length range, no separate adjustment is warranted on account of interest on outstanding receivables from AEs in the hands

Assimilate Solutions India Pvt. Ltd., Delhi vs. DCIT Circle, 1(1), Delhi

In the result, the ground raised by the assessee in this regard is dismissed

ITA 5357/DEL/2024[2021-22]Status: DisposedITAT Delhi15 Oct 2025AY 2021-22

Bench: Shris.Rifaur Rahman & Shri Vimal Kumarassimilate Solutions India Private Limited, Vs. Dcit/Acit, C/O Sanjiv Sapra & Associates Llp, Circle 1 (1), Chartered Accountants, New Delhi. C – 763, New Friends Colony, New Delhi – 110 025. (Pan :Aakca4501H) (Appellant) (Respondent) Assessee By : Shri Sanjiv Sapra, Ar Revenue By : Shri Dharam Veer Singh, Cit Dr Date Of Hearing : 30.07.2025 Date Of Order : 15.10.2025 Order Per S. Rifaur Rahman: 1. The Assessee Has Filed Appeal Against Assessment Order Dated 31.12.2015 Passed By The Assessment Unit, Income Tax Department Under Section 143(3) Read With Section 144C(13)R.W.S. 144B Of The Income-Tax Act, 1961 (For Short ‘The Act”) For Assessment Year 2021-22 Pursuant To The Directions Of The Dispute Resolution Panel U/S 144C(5) Of The Act. 2. M/S. Assimilate Solutions India Private Limited, The Assessee Was Incorporated On 19.04,2012 & Is Engaged In The Business Of Providing

For Appellant: Shri Sanjiv Sapra, ARFor Respondent: Shri Dharam Veer Singh, CIT DR

Section 143(2)Section 143(3)Section 144C(13)Section 144C(5)

AO/TPO to recompute the profit margins of the selected comparables on the basis of audit reports and in line with margins of Tested Party (viz. the Assessee) and Safe Harbour Rules (refer to para 8.2 at page 25 of DRP’s order). 7. As there were certain mistakes/errors apparent from ... general application. In the scheme of things envisaged under theTNMM, it is inevitable that there will be some differences between the comparables and the tested party butthe impact of these differences is substantially mitigated by the averaging. If a comparable is being sought tobe rejected on the ground