“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

Panasonic India Private Ltd., Gurgaon vs. Neac, New Delhi

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

ITA 612/DEL/2021[2016-17]Status: DisposedITAT Delhi08 Oct 2025AY 2016-17

Bench: Shri C. N. Prasad & Shri M. Balaganeshpanasonic India Pvt. Ltd, Vs. Neac, 12Th Floor, Ambience New Delhi Corporate Office, Tower-2, Ambience Island, Gurgaon (Appellant) (Respondent) Pan: Aadcp9391B

For Appellant: Shri Kanchan Kaushal, AdvFor Respondent: Shri S. K. Jadav, CIT (DR)

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

risks , employs normal assets and performs the function of trading in consumer electronic goods. While doing the benchmarking, the assessee was taken as the tested party. It was pleaded that since assessee is a pure distribution cum trading segment simplicitor, wherein it imports goods from its AEs and sells ... TNMM, the ALP is determined by comparing the operating profit related to an appropriate base i.e., cost or sale or assets of the "tested party" with the operating profit of an uncontrolled party engaged in comparable transactions. Under the TNMM, net margin or operating profit is compared against with

Sp Armada Oil Exploration Private Limited, Mumbai vs. Deputy Commissioner of Income Tax- Circle 3(3)(1), Mumbai

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

ITA 6575/MUM/2024[2021-22]Status: DisposedITAT Mumbai06 Oct 2025AY 2021-22

Bench: Shri Vikram Singh Yadavshri Sandeep Singh Karhailsp Armada Oil Exploration Private Limited 404, Trade Centre, Bandra Kurla Complex, Bandra (East), Mumbai 400051. Pan: Aaqcs7983P ............... Appellant

For Appellant: Shri Mukesh Butani a/w Shri Pratik PoddarFor Respondent: Shri. Pravin Salunkhe & Shri Aditya M. Rai

Section 143(2)Section 143(3)Section 234ASection 253(1)Section 92C(1)Section 92C(2)Section 92C(3)

benchmarking of the international transaction of payment of bareboat charter hire charges to the associated enterprise, the assessee, considering itself as the tested party, adopted “Other Method” as the most appropriate method. Further, by comparing the proportion of bareboat charter hire day rate paid to the associated enterprise

Aptiv Components India P.Ltd (Formerly Known As Delphi Automotive Systems P.Ltd), New Delhi vs. ACIT, Circle-1(1), New Delhi

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

ITA 2082/DEL/2022[2018-19]Status: DisposedITAT Delhi01 Oct 2025AY 2018-19

Bench: Shri M. Balaganesh & Shri Anubhav Sharmam/S Aptive Components India Vs. Acit, Private Limited (Formerly Known Circle-1(1), As M/S Delphi Automotive New Delhi System Private Limited), P-24, Green Park Extension, New Delhi (Appellant) (Respondent) Pan: Aaacd0226F Assessee By : Shri Ajay Vohra, Sr. Adv Shri Neeraj Jain, Adv Ms. Richa Aggarwal, Adv Revenue By: Shri Amit Kumar Singh, Sr. Dr Date Of Hearing 04/07/2025 Date Of Pronouncement 01/10/2025

For Appellant: Shri Ajay Vohra, Sr. AdvFor Respondent: Shri Amit Kumar Singh, Sr. DR

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

Pricing Study Report (TPSR) had applied Transactional Net Margin Method (TNMM) as the Most Appropriate Method (MAM) considering the associated enterprise (AE) as the tested party and taking the profit level indicator as Operating Profit to Operating Cost (OP/)OC) margin. The assessee selected 10 comparable companies wherein the weighted ... find that the assessee had benchmarked the international transaction of technical support services applying TNMM as the MAM considering the AE as the tested party. It is a fact that AE had charged 5 percent on the actual cost incurred by it on the assessee in consideration of rendering

Ebaotech India Private Limited, Mumbai vs. Deputy Commissioner of Income Tax, Circle 1(2)(1), Mumbai

In the result, the appeal is accordingly allowed for statistical purposes in above terms

ITA 6359/MUM/2024[2021-2022]Status: DisposedITAT Mumbai25 Sept 2025AY 2021-2022

Bench: The Authorities Below Are That The Assessee Is A Subsidiary Company Of The Ebao Group Which Is Globally Diversified In Insurance Software Having Its Headquarters In Shanghai, China & The Operations Of The Group Are Located In Many Countries Including India, Australia, China, Malaysia, Japan & Singapore, With Extensive Coverage In Insurance Software & Technology.

Section 115JSection 139(1)Section 142(1)Section 143(2)Section 143(3)Section 92BSection 92C

Margin Method (TNMM) uses net profitability levels from comparable transactions to establish an arm’s length result against which the profitability of the tested party is compared. Hence, the DRP was of the opinion that the appropriate method as per sub-section 92C(2) was the TNMM with Operating Profit/Operating

Jubilant Generics Ltd., Noida vs. ACIT, Circle- 5(1)(1), G.B. Nagar

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

ITA 2004/DEL/2022[2018-19]Status: DisposedITAT Delhi24 Sept 2025AY 2018-19

Bench: Shri Yogesh Kumar U.S. & Shri Avdhesh Kumar Mishra

Section 143(3)Section 144BSection 92C

circumstances of the case and in law, the Ld. TPO/AO/DRP erred in rejecting the use of overseas associated enterprises ("AEs”) of the Appellant as tested parties, which are less complex vis-a-vis the Appellant, citing incorrect and irrelevant reasons. 4. On the facts and in the circumstances ... engaged in complex activities and do not own any/minimal intangible assets; therefore, these AEs have been taken by the appellant assessee as tested parties for benchmarking purposes. The OP/OR has been take as Profit Level Indicator (PLY). The assessee has also sold raw material

Technip India Limited, New Delhi vs. ACIT, Spl Range-9, New Delhi

In the result, Appeal No.6390/Del/2017 is partly allowed as per above terms

ITA 9852/DEL/2019[2015-16]Status: DisposedITAT Delhi17 Sept 2025AY 2015-16

Bench: Shri S Rifaur Rahman & Shri Vimal Kumarita No. 6390/Del/2017 Assessment Year: 2013-14 Ita No. 9852/Del/2019 Assessment Year: 2015-16 Technip Energies India Vs. Additional Commissioner Of Limited, ( Formerly Known As Income Tax, Technip India Limited), Special Range-9, A-4, Sector 1, Institutional New Delhi Area, Noida – 201 301 Pan No. Aaack3349R (Appellant) (Respondent)

For Appellant: Shri Vishal Kalra, Adv., Shri Yishu GoelFor Respondent: Shri Dharm Veer Singh, CIT (DR)

Section 143(2)Section 143(3)Section 144C(13)Section 144C(5)Section 250Section 92C

deemed interest income on the accounts receivables from the AE for the Appellant will tantamount to double addition. If the profitability of the tested party is more than the working imputation of interest on the outstanding receivables is not warranted. Post working capital adjustment, the margin of comparable companies works

Technip India Ltd., Noida vs. Addl.CIT, Special Range- 9, New Delhi

In the result, Appeal No.6390/Del/2017 is partly allowed as per above terms

ITA 6390/DEL/2017[2013-14]Status: DisposedITAT Delhi17 Sept 2025AY 2013-14

For Appellant: Shri Vishal Kalra, Adv., Shri Yishu GoelFor Respondent: Shri Dharm Veer Singh, CIT (DR)

Section 143(2)Section 143(3)Section 144C(13)Section 144C(5)Section 250Section 92C

Andante Foods LLP, Bangalore vs. Deputy Commissioner of Income Tax, Circle-1(1)(1), Bengaluru

Appeal are allowed, and appeal of the assessee is allowed for statistical purposes

ITA 1723/BANG/2024[2020-21]Status: DisposedITAT Bangalore15 Sept 2025AY 2020-21

Bench: Shri Prashant Maharishi & Shri Keshav Dubeyassessment Year: 2020-21

For Respondent: Shri Harsha M., CA

Section 143(2)Section 143(3)Section 144C(1)Section 92C

combined transactions of sale of processed foods , purchase of packing materials., sales commission , compensations and rent for machinery etc. Assessee selected Belgium entity as tested party saying it to be least complex .The assessee adopted TNMM as the most appropriate method using the refinitive fundamentals and worldwide profit company database ... operating loss of Rs.16,16,63,124. 8. The ld. TPO issued show cause notice against the selection of AE as the tested party. The assessee submitted that operations performed by the AE are less complex, however, same was not substantiated by any documentary evidences. The TPO noted that

D. E. Shaw India Private Limited, Hyderabad vs. DCIT., Circle-8(1), Hyderabad

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

ITA 1154/HYD/2024[2020-21]Status: DisposedITAT Hyderabad12 Sept 2025AY 2020-21

Bench: Shri Ravish Sood & Shri Madhusudan Sawdiaआ.अपी.सं /Ita No.1154/Hyd/2024 (निर्धारण वर्ा/Assessment Year:2020-21) M/S. D.E. Shaw India Pvt. Dy. Commissioner Of Income Vs. Ltd., Hyderabad. Tax, Pan:Aaacd7214J Circle 8(1), Hyderabad. (Appellant) (Respondent) निर्धाररती द्वधरध/Assessee By: Shri S.P. Chidambaram, Adv. रधजस् व द्वधरध/Revenue By: Ms. U. Mini Chandran, Sr-Dr सुिवधई की तधरीख/Date Of Hearing: 01/09/2025 घोर्णध की तधरीख/Pronouncement: 12/09/2025 आदेश/Order Per Madhusudan Sawdia, A.M.: This Appeal Is Filed By M/S. D E Shaw India Pvt. Ltd. (“The Assessee”), Feeling Aggrieved By The Assessment Order Passed By The Learned Assessing Officer (“Ld. Ao”) U/S. 143(3) R.W.S. 144C(13) R.W.S. 144B Of The Income Tax Act, 1961 (“The Act”) Dated 27.06.2024 For The A.Y. 2020-21. 2. At The Outset, It Is Seen That There Is A Delay Of 66 Days In Filing Of The Present Appeal, For Which The Assessee Has Filed Condonation Petition Explaining The Reasons For Delay In Filing Of The Appeal. As Per Record, The Appeal Was Required To Be Filed On Or Before

For Appellant: Shri S.P. Chidambaram, AdvFor Respondent: Ms. U. Mini Chandran, SR-DR

Section 143(3)

illogical and improper to treat AMP expenses as a separate international transaction, for the simple reason that if the functions performed by the tested parties ITA No.1154/Hyd/2024 13 and the comparables match, with or without adjustments, AMP expenses are duly accounted for. It would be incongruous to accept the comparables ... Supra) in respect of aggregation of closely linked transactions. The relevant portion of the judgment is reproduced below :- ITA No.1154/Hyd/2024 15 "In case the tested party is engaged in single line of business, there is no bar or prohibition from applying the TNM Method on entity level basis. The focus

Netradyne Technology India Private Limited, Bengaluru vs. Income Tax Officer, Ward-5(1)(1), Bengaluru

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

ITA 2258/BANG/2024[2021-22]Status: DisposedITAT Bangalore10 Sept 2025AY 2021-22

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

For Appellant: Shri Suresh Muthukrishnan, ARFor Respondent: Dr. Divya K J, CIT(DR)(ITAT), Bengaluru

Section 143(3)Section 144Section 92C

determine the ALP. 4. For benchmarking software development services , In Transfer pricing Study Report [ TPSR], The assessee, selecting itself as a tested party, Page 3 of 18 has adopted Transactional Net Margin Method [TNMM] as the Most Appropriate method, selecting Proft level indicator of NCP computing its margin ... international transaction of software development service is at arm’s length. 5. In Purchase of software license for distribution segment, assessee taking itself as tested party, selected Transactional Net margin method as the most appropriate method adopting Profit level indicator of Operating profit margin of assessee at (-) 419.04% selected

Deputy Commissioner of Income Tax, Circle 2(1)(1), Vadodara, Aaykar Bhawan vs. Gujarat Narmada Valley Fertilizer & Chemicals Limited, Narmadanagar

In the result, appeal filed by the Revenue is dismissed

ITA 970/AHD/2025[2015-16]Status: DisposedITAT Ahmedabad03 Sept 2025AY 2015-16

For Appellant: Shri Sher Singh, CIT.DRFor Respondent: Shri Vishal Kalra. AR

Section 250Section 80I

analysis in the TP Report filed by the assessee, the transaction was benchmarked using an internal CUP with the manufacturing units as the tested party. The Captive Power Plant (‘CPP’) of the assessee was taken ITA No. 970/Ahd/2025 [DCIT vs. Gujarat Narmada Valley Fertilizer & Chemicals Limited ... tested party and relevant CUP for the same was applied to get the ALP. Noting the sale of electricity to be a regulated activity, therefore, as per law, the TPO noted that the CPP could only sell electricity to a distribution licensee (through a transmission utility). The benchmarking of sale

Avaada Sataramh Private Limited, Noida Gautam Budha Nagar, Up vs. ITO 5(1)(1) G Budh Nagar, Noida, Up

In the result, the appeal being ITA No

ITA 4916/DEL/2024[2021-22]Status: DisposedITAT Delhi03 Sept 2025AY 2021-22

Bench: SHRI S. RIFAUR RAHMAN (Accountant Member), SHRI YOGESH KUMAR U.S. (Judicial Member)

For Appellant: Shri Gautam Jain, AdvocateFor Respondent: Shri S.K. Jadhav, CIT DR

Section 115BSection 143(3)Section 144CSection 144C(13)Section 144C(5)Section 153

already benchmarked during the course of scrutiny proceedings in the case of AVPL and further assessee contended that since the margin earned by the tested party i.e. AVPL is greater than the industry comparable transaction can be held to be at arm’s length. However, TPO rejected the same

Avaada Sustainable Rjproject Private Limited, Gautam Budha Nagar, Up vs. ITO 5 (1)(1), G Budh Nagar, Noida, Up

In the result, the appeal being ITA No

ITA 4884/DEL/2024[2021-22]Status: DisposedITAT Delhi03 Sept 2025AY 2021-22

Bench: SHRI S. RIFAUR RAHMAN (Accountant Member), SHRI YOGESH KUMAR U.S. (Judicial Member)

For Appellant: Shri Gautam Jain, AdvocateFor Respondent: Shri S.K. Jadhav, CIT DR

Section 115BSection 143(3)Section 144CSection 144C(13)Section 144C(5)Section 153

Garware Fulflex India Pvt Ltd, Mumbai vs. DCIT, Circle 1(1)(1), Mumbai

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

ITA 6751/MUM/2024[2021-22]Status: DisposedITAT Mumbai28 Aug 2025AY 2021-22

Bench: Smt. Beena Pillai () & Shri Om Prakash Kant ()

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

margins subsume any interest on outstanding receivables. When the assessee itself has not computed such comparison of the working capital adjusted margin of the tested party with the comparables, it cannot find fault with the Ld. TPO for not taking into consideration working capital adjusted margin while arm's length

Pramod Lakra, Deputy Commissioner of Income Tax, Circle-11(1), Kolkata vs. Balrampur Chini Mills Ltd, Kolkata

In the result all the four appeals of the revenue are dismissed

ITA 1082/KOL/2025[2021-22]Status: DisposedITAT Kolkata26 Aug 2025AY 2021-22

Bench: Shri Rajesh Kumar, Am & Shripradip Kumar Choubey, Jm

For Appellant: Shri S.K. Tulsiyan, &For Respondent: Shri Praveen Kishore, DR

Section 80Section 92C

dispute that the MAM is CUP. The contention of the Id. D/R that when MAM is taken as CUP, we need not determine a tested party is erroneous. The ICAI in Guidance note u/s 948 of the Act has laid down that the tested party has to be identified even ... when MAM is CUP. In this case the assessee has taken that the tested party as the non-eligible unit and whereas the TPO has taken the tested party as the CPP i.e. the eligible unit. In our view the profit of the non-eligible unit also

Pramod Lakra, Deputy Commissioner of Income Tax, Circle-11(1), Kolkata vs. Balrampur Chini Mills Ltd, Kolkata

In the result all the four appeals of the revenue are dismissed

ITA 1081/KOL/2025[2020-21]Status: DisposedITAT Kolkata26 Aug 2025AY 2020-21

Bench: Shri Rajesh Kumar, Am & Shripradip Kumar Choubey, Jm

For Appellant: Shri S.K. Tulsiyan, &For Respondent: Shri Praveen Kishore, DR

Section 80Section 92C

Pramod Lakra, Deputy Commissioner of Income Tax, Circle-11(1), Kolkata vs. Balrampur Chini Mills Ltd, Kolkata

In the result all the four appeals of the revenue are dismissed

ITA 1080/KOL/2025[2018-19]Status: DisposedITAT Kolkata26 Aug 2025AY 2018-19

Bench: Shri Rajesh Kumar, Am & Shripradip Kumar Choubey, Jm

For Appellant: Shri S.K. Tulsiyan, &For Respondent: Shri Praveen Kishore, DR

Section 80Section 92C

Pramod Lakra, Deputy Commissioner of Income Tax, Circle-11(1), Kolkata vs. Balrampur Chini Mills Ltd, Kolkata

In the result all the four appeals of the revenue are dismissed

ITA 1079/KOL/2025[2017-18]Status: DisposedITAT Kolkata26 Aug 2025AY 2017-18

Bench: Shri Rajesh Kumar, Am & Shripradip Kumar Choubey, Jm

For Appellant: Shri S.K. Tulsiyan, &For Respondent: Shri Praveen Kishore, DR

Section 80Section 92C

M/S. International Specialty Products (India) Private Limited, Hyderabad vs. Circle 15(1)(2), Mumbai

In the result, appeal of the assessee is allowed

ITA 3255/MUM/2025[2012-13]Status: DisposedITAT Mumbai26 Aug 2025AY 2012-13

Bench: Shri Amit Shukla & Shri Girish Agrawalassessment Year: 2012-13

For Appellant: Shri P.V.S.S. Prasad, CAFor Respondent: Shri Virabhadra S. Mahajan, Sr. DR

Section 271Section 271(1)(c)Section 92C

policy. Ld. DRP has already directed the Ld.AO to compare the 7 International Specialty Products (India) Pvt. Ltd. AY 2012-13 margins of the tested party and the comparable before charging depreciation. The Ld. AR has placed on record the working of the same. Therefore, endorsing the same, we direct

ACIT-8(1)(1), Mumbai vs. Reliance Life Sciences Pvt. Ltd., Navi Mumbai

ITA 2978/MUM/2025[2016-17]Status: DisposedITAT Mumbai25 Aug 2025AY 2016-17

Bench: Smt. Beena Pillai & Shri Girish Agrawal

For Appellant: Shri Nimesh Vora & Ms. Moksha Mehta, CAsFor Respondent: Shri Asif Karmali, Sr. DR

Section 143(3)Section 35Section 92F

IN THE INCOME TAX APPELLATE TRIBUNAL “J” BENCH MUMBAI BEFORE SMT. BEENA PILLAI, JUDICIAL MEMBER AND SHRI GIRISH AGRAWAL, ACCOUNTANT