“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

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

inter alia erred in: 1.1 Rejecting the appellant's contention for selection of Foreign Associated Enterprises ('AEs) as the Tested Party without appreciating that the Assessee Company has substantiated the availability and 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 by him 1.4 Selecting certain companies which are otherwise incomparable. 1.5 Rejecting companies otherwise functionally comparable on the ground

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

matter is not really relevant for the present purposes. 51. The underlying assumption for applicability of berry ratio is that the return to the tested party should be commensurate with his operating expenses and the value of goods dealt in was irrelevant for this purpose. While this proposition so laid ... assumed, is not materially affected by the value of the products distributed; in other words it is not proportionate to sales; and (iii) the tested party does not perform other significant functions in the transaction under examination that should be remunerated using another method or profit level indicator

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

ITA No.3472 & 5475/Del/2024 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI “I” BENCH: NEW DELHI BEFORE SHRI CHALLA NAGENDRA PRASAD, JUDICIAL

Thermo Fisher Scientific India P. Ltd, Mumbai vs. DCIT 15(3)(1), Mumbai

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

ITA 2458/MUM/2015[2010-11]Status: DisposedITAT Mumbai16 Jul 2025AY 2010-11

Bench: Shri Vikram Singh Yadavshri Sandeep Singh Karhail

For Appellant: Shri Dhanesh Bafna, Shri Amol MahajanFor Respondent: Shri Ajay Chandra, CIT-DR

Section 143(3)Section 144CSection 144C(5)Section 32(1)

international transaction of import of finished goods, the assessee adopted the Resale Price Method (“RPM”) as the most appropriate method. By considering itself the tested party, the assessee identified four comparable companies with an arithmetic mean gross margin, i.e., Gross Profit/Sales, of 31.50%. As the assessee earned a gross profit ... receipt of indenting commission, the assessee adopted the Comparable Uncontrolled Price (“CUP”) method as the most appropriate method. By considering itself as the tested party, the assessee selected the following comparable companies by conducting a search on the RoyaltyStat database: - Sr. No. Contractors Commission rate% 1 Hand Innovations

Karl Storz Endoscopy India Pvt. Ltd., New Delhi vs. ITO, New Delhi

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

ITA 4063/DEL/2016[2008-09]Status: DisposedITAT Delhi10 Jul 2025AY 2008-09

Bench: Shri Ramit Kochar & Shri Sudhir Kumarassessment Year: 2008-09 M/S Karl Storz Endoscopy Vs. The Income Tax Officer Ward-5(2) India Pvt. Ltd. D-181, New Delhi Okhla Industrial Area , Phase-1 New Delhi- 110020 Pan :Aaack4816D (Appellant) (Respondent)

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

analysis forms is the back bone of any transfer pricing analysis as it ensures that the comparables selected mirror the economic substance of the tested party’s transactions. (ii) Mischaracterization of Appellant’s functions: Ld. AR also stated that in the course of transfer pricing proceedings for assessment year

Deputy Commissioner of Income-Tax, Circle - 1(1), Pune vs. M/S. IAC International Automotive India Pvt.Ltd, Pune

In the result, the appeal of the Revenue is dismissed

ITA 749/PUN/2022[2013-14]Status: DisposedITAT Pune08 Jul 2025AY 2013-14

Bench: Ms. Astha Chandra & Shree Dr. Dipak P. Ripote

For Appellant: Shri Darpan KirpalaniFor Respondent: Shri Madhukar Anand

Section 143(2)Section 92Section 92C

Rejecting the economic analysis documented by the assessee in its TP study report of considering TNMM as the MAM by selecting AE as the tested party by concluding that there are following issues:- (i) Financial statement of the AE is for the accounting year ended December 2012 and there ... No.749/PUN/2022, AY 2013-14 (iii) Comparable data pertains to the financial year 2012-13 as against the year ending of the tested party which is December 2012. (Refer para 8.1 of the TP order) (B) Concluding that the mark-up earned by the AE is more than

Assistant Commissioner of Income Tax, Circle-1, Tirunelveli vs. Ms.Phillips Foods India Private Limited, Tuticorin

In the result, the appeal filed by the Revenue and the cross objection filed by the assessee are dismissed

ITA 739/CHNY/2024[2015-16]Status: DisposedITAT Chennai08 Jul 2025AY 2015-16

Bench: Shri George George Kand Shri S.R. Raghunathaआयकर अपील सं./Ita No.: 739/Chny/2024 िनधा"रण वष"/Assessment Year:2015-16 & C.O No.17/Chny/2024 [In I.T.A. No.739/Chny/2024] The Assistant Phillips Foods India Pvt. Commissioner Of Income Vs. Ltd., Tax, C-75/76, Sipcot Industrial Circle 1, Complex, Tirunelveli Tuticorin Central Stand S.O. Tuticorin – 628 002. Pan: Aabcp 7916Q (अपीलाथ"/Appellant) (""यथ"/Respondent/Cross Objector) राज"व क" ओर से /Revenue By : Shri Ar.V. Sreenivasan, Cit िनधा"रती क" ओर से/Assessee By : Ms. K. Amulya, Ca & Shri Vinay Jain, Ca सुनवाई क" तारीख/Date Of Hearing : 07.07.2025 घोषणा क" तारीख/Date Of Pronouncement : 08.07.2025

For Appellant: Ms. K. Amulya, CA &For Respondent: Shri AR.V. Sreenivasan, CIT

Section 143(2)Section 144C(1)Section 144C(3)Section 250Section 92C

this context, it is relevant to note that said adjustment was determined by the TPO by adopting the assessee’s foreign AE as the tested party, upon rejecting the assessee’s TP documentational and benchmarking analysis. - 3 - ITA No,739/CHNY/2024 & CO No.17/CHNY/2024 3. Subsequently, the AO passed draft assessment order ... assessment years 2021-22 to 2025-26 in support of its functional analysis and contention that assessee ought to be considered as a tested party. The CIT(A) concurred and held that assessee company shall be considered as tested party. Further, the CIT(A) directed the AO to adopt

Rolls-Royce India Private Limited, Delhi vs. DCIT Tp 3(2)(1), Delhi

The appeal is allowed as indicated above

ITA 252/DEL/2022[2017-18]Status: DisposedITAT Delhi04 Jul 2025AY 2017-18

Bench: Shri Ramit Kochar & Shri Sudhir Pareek

For Appellant: Shri Nikhil Tiwari, AdvFor Respondent: Shri S.K. Jadhav, CIT-DR

Section 143(3)Section 144C(5)

inconsistent approach in treatment of following items of expense/ income wherein the same has been treated as operating while computing the margins of tested party and non- operating while computing margins of comparables:  gain/loss on foreign exchange fluctuation.  bank charges, and  provision for bad/doubtful debt created and written back Addition

Aristocrat Technologies India Private Limited, Noida vs. DCIT, Circle-5(1)(1), Noida

In the result, appeal of the assessee is partly allowed in the terms aforesaid

ITA 3091/DEL/2024[2020-21]Status: DisposedITAT Delhi03 Jul 2025AY 2020-21

Bench: Shri Vikas Awasthy & Shri Avdhesh Kumar Mishraआअसं.3091/िद"ी/2024(िन.व. 2020-21) Aristocrat Technologies India P. Ltd., 8Tgh To 10Th Floor, Tower-11A, Plot No. 20 & 21, Candor Techspace, It/Ites Sez Complex, Sector-135, Noida, Up 201304 ...... अपीलाथ"/Appellant Pan: Aahca-9200-G बनाम Vs. Deputy Commissioner Of Income Tax, ..... "ितवादी/Respondent Circle-5(1)(1), Noida, Up Assessee By : Shri Atul Jain, Chartered Accountant Ms. Nishi Bhutani & Ms.Preeti Agnihotri, Chartered Accountants Department By : S/Shri S.K. Jhadav, Cit(Dr) & Rajesh Kumar Dhaneshta, Sr.Dr सुनवाई क" ितिथ/ Date Of Hearing : 04/04/2025 घोषणा क" ितिथ/ Date Of Pronouncement : : 03/07/2025 आदेश/Order Per Vikas Awasthy, Jm: This Appeal By The Assessee Is Directed Against The Assessment Order Dated 27.05.2024 Passed 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’). 2. The Facts Of The Case In Brief As Emanating From Records Are: The Assessee Is Engaged In Providing Design & Development Services To Its Associated Enterprises (Ae’S). The Assessee Is Also Rendering Global It Services To Its Ae’S

For Appellant: Shri Atul Jain, Chartered AccountantFor Respondent: S/Shri S.K. Jhadav, CIT(DR) & Rajesh Kumar Dhaneshta, Sr.DR

Section 143(3)Section 234BSection 270A

available the same can be considered to have financial data of congruent period. If calenderization is done and financial data is aligned with the tested party’s fiscal year, the company can be selected as comparable. The Hon’ble Delhi High Court in the case of CIT vs. Mckinsey Knowledge ... supra) approved the decision of the Tribunal holding that if the comparable is that if the comparable is functionally same as that of tested party then same cannot be rejected merely on the ground that data for entire financial year is not available. If from the available data on record

Jones Lang Lasalle Property Consultants (India) Private Limited, Delhi, India vs. Deputy Commissioner of Income Tax, Circle 13(1), Delhi, India

In the result, the appeal of the assessee is allowed and the Stay

ITA 3964/DEL/2024[2020-21]Status: DisposedITAT Delhi30 Jun 2025AY 2020-21

Bench: Shri S Rifaur Rahman & Shri Vimal Kumarassessment Year: 2020-21 & Stay Application No.61/Del/2025 ( In Ita No. 3964/Del/2024 ) Assessment Year: 2020-21

For Appellant: S/Shri Nageshwar Rao and ParthFor Respondent: ShriDharam Veer Singh, CIT (DR)

Section 142(1)Section 143(2)Section 143(3)Section 144BSection 144CSection 144C(12)Section 144C(13)Section 144C(5)Section 41Section 92

making supernormal profits. 8.8 By erroneously treating 'Foreign exchange gain/loss' and 'Provision written back' as non-operating in nature for computing operating margins of tested party and comparable companies. SA No. 61/Del/2025 9. Ld. AO/TPO/ DRP erred in including deemed international transactions for determination of the quantum of adjustment

Asandas & Sons Private Limited, Mehsana vs. The Dy.CIT, Circle- Gandhinagar, Gandhinagar

In the result the appeal filed by the assessee is allowed for statistical purpose

ITA 1854/AHD/2024[2021-22]Status: DisposedITAT Ahmedabad25 Jun 2025AY 2021-22

Bench: DR. BRR Kumar (Vice President), Shri T. R. Senthil Kumar (Judicial Member)

Section 144C(5)Section 920

erred in not accepting the alternative benchmarking method by treating MAM as Transaction Net Margin Method ("TNMM") and by taking AE as testing party based on the nature of business and availability of reliable comparables though AE is least complex and does not own intangibles. 1.7 On facts and circumstances ... engages in contract farming support, and bears higher functional risks.  The assessee submitted an alternative benchmarking analysis  under TNMM, treating HAPL (AE) as the tested party. The AE earned a margin of 5.86%, while comparable companies showed margins of 1.19% to 2.44% as per Capitaline and Prowess databases

DCIT-2 1 1 Mumbai, Mumbai vs. Iss Facility Services India Pvt. Ltd., Mumbai

In the result, the appeal of the Revenue is partly allowed for statistical

ITA 2208/MUM/2025[2014-15]Status: DisposedITAT Mumbai16 Jun 2025AY 2014-15

Bench: Shri Vikram Singh Yadavshri Sandeep Singh Karhail

For Appellant: Shri Nikhil TiwariFor Respondent: Shri Pravin Salunkhe, Sr.DR

Section 10(35)Section 143(3)Section 144C(3)Section 14ASection 153Section 250

most appropriate method, the assessee benchmarked the aforesaid two international transactions by considering its AE, i.e., ISS World Services A/S, Denmark, as a tested party. The assessee selected the comparable companies operating in the European Region providing Management Services similar to that provided by ISS World Services A/S, Denmark ... assessee, and since the net cost- plus margin of the tested party was within the permissible range of three years weighted average net cost plus margin of the comparable companies selected by the assessee, it was claimed that both international transactions are at arm's length price. 6. Pursuant

Kbs Creation Ltd, Mumbai vs. Dy Comm. of Income Tax -Circle 24(1), Mumbai

In the result, the concise ground of appeal of the assessee is allowed

ITA 6477/MUM/2024[2021-22]Status: DisposedITAT Mumbai16 Jun 2025AY 2021-22

Bench: SHRI PAWAN SINGH (Judicial Member), SHRI GIRISH AGRAWAL (Accountant Member)

Section 10ASection 143(3)Section 254(1)Section 80ISection 92C

Margin Method (TNMM). The TPO excluded seven comparable of assessee and included four new comparable. Unit-II of the assessee was considered as tested party. On the basis of his analysis, the TPO suggested downward adjustment of Rs. 11.62 Crore on transaction of sales

Assistant Commissioner of Income Tax Corporate Circle 1 1, Chennai vs. Hitachi Solutions India Private Limited, Kanchipuram

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

ITA 1715/CHNY/2024[2018-19]Status: DisposedITAT Chennai06 Jun 2025AY 2018-19

Bench: SHRI GEORGE GEORGE K, VICE PRESIDENT AND\nSHRI S.R. RAGHUNATHA, ACCOUNTANT MEMBER\nआयकर अपीलसं./IT(TP)A No.: 17/CHNY/2024\nनिर्धारण वर्ष / Assessment Year: 2018-19\nHitachi Solutions India Private\nLimited,\nBlock 5, 10th Floor, 1/124,\nDLF IT Park, Shivaji Gardens,\nMount Poonamallee Road,\nChennai - 600 089.\nThe Deputy Commissioner of\nIncome Tax,\nVs. Corporate Circle- 1(1),\nNo.121, M.G.Road,\nChennai - 600 034.\n[PAN:AAACZ-1544-R]\n(अपीलार्थी/Appellant)\n(प्रत्यर्थी/Respondent)\nआयकर

For Appellant: Shri Darpan Kirpalani, Advocate by VirtualFor Respondent: Shri A. Sasikumar, C.I.T

Section 143(3)Section 153Section 153(1)Section 153(4)

facts, by treating certain items of income and expense as non-operating in nature while determining the operating margin of the tested party and/or comparable companies. 3.8 The Ld. CT(A) I Ld. TPO I Ld. AO have performed several computational errors in arriving at the margins of the following

Schindler India Private Limited, Mumbai vs. Income-Tax Officer, Mumbai

In the result, the appeal filed by the assessee is disposed off in light of aforesaid directions

ITA 4819/MUM/2024[AY 2020-21]Status: DisposedITAT Mumbai06 Jun 2025

Bench: Shri Vikram Singh Yadav & Shri Sandeep Singh Karhailassessment Year : 2020-21 Schindler India Private Limited, The Asst. Commissioner Of Schindler House, Income Tax, Main Street, Vs. Circle-15(3)(2) Hiranandani Gardens, Aayakar Bhavan, Powai, Maharshi Karve Road, Mumbai -400076 New Marine Lines, [Pan: Aaecs1548J] Churchgate, Mumbai-400020 (Appellant) (Respondent)

For Appellant: Ms. Chandani Shah a/wFor Respondent: Shri Ajay Chandra, CIT-DR

Section 143(3)Section 144CSection 144C(8)Section 270ASection 274Section 37(1)Section 92C

analysis as undertaken by the Appellant merely for a reason the comparables selection are the foreign comparables which is based on the selection of tested party. However, the learned AO/TPO erred by not providing any reasons to reject the AE as the tested party

Atmecs Technologies Private Limited, Hyderabad vs. Income Tax Officer, Ward-1(1)(1), Bangalore

In the result, the appeal of assessee is partly allowed

ITA 1681/BANG/2024[2020-2021]Status: DisposedITAT Bangalore02 Jun 2025AY 2020-2021

Bench: Shri Prashant Maharishi & Shri Prakash Chand Yadav

For Appellant: Shri P.V.S.S. Prasad, CAFor Respondent: Dr. K.J. Dhivya

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

benchmarking of the international transactions, assessee adopted Transactional Net Margin Method [TNMM] as the most appropriate method [MAM] selecting the assessee as tested party adopting Profit Level Indicator [PLI] of OP/OC, selecting One comparable company where the margin of the comparable was stated to be at arm’s length

Friday Storytellers LLP, Mumbai vs. ITO, Ward, 4(2)(1), Mumbai

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

ITA 5546/MUM/2024[2021-22]Status: DisposedITAT Mumbai30 May 2025AY 2021-22

Bench: Shri Om Prakash Kant () & Shri Rahul Chaudhary ()

For Respondent: Mr. Karan Thaker a/w

current year data in respect of Line Production Pvt. Ltd. in its transfer pricing documentation. In our considered view, where the results of the tested party pertain to the relevant financial year, it is necessary, for a meaningful comparison, that data for the same year be available in respect

Ucweb Mobile Private Limited, Gurgaon vs. Assessment Unit, Inocome Tax Department, Gurgaon

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

ITA 3945/DEL/2024[2020-21]Status: DisposedITAT Delhi30 May 2025AY 2020-21

Bench: SHRI MAHAVIR SINGH (Vice President), SHRI MANISH AGARWAL (Accountant Member)

Section 143(2)Section 143(3)Section 144CSection 144C(1)Section 144C(13)Section 144C(5)Section 253(1)(d)Section 43(3)

Services Pvt. Ltd. as comparables to assessee. 6.4. Ld. DRP/ΤΡΟ/ΑO have erred in treating foreign exchange gain as non-operating while computing tested party margin by reference to extraneous assumption and factors and by ignoring FAR analysis specific to the transaction under consideration. That Ld. AO has erred

Wrigley India Private Limited, Delhi vs. ACIT, Circle-27(2), Delhi

ITA 953/DEL/2022[2016-17]Status: DisposedITAT Delhi29 May 2025AY 2016-17

Bench: Shri Vikas Awasthy & Shri Manish Agarwal

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 pertaining to purchase of goods and TNMM was used as the most appropriate method with OP/TC as the relevant

Wrigley India Private Limited, Delhi vs. ACIT, Circle-27(2), Delhi

ITA 952/DEL/2022[2015-16]Status: DisposedITAT Delhi29 May 2025AY 2015-16

Bench: Shri Vikas Awasthy & Shri Manish Agarwal

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

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘I': NEW DELHI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER AND SHRI MANISH