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“transfer pricing adjustment”

Transfer PricingSection 92CSection 92C2,153 judgments

The decision most relied on for transfer pricing adjustment is CIT v. EKL Appliances Ltd. (345 ITR 241), cited in 422 judgments on BharatTax.

Leading authorities on transfer pricing adjustment

CIT v. EKL Appliances Ltd.
345 ITR 241 · 2012 · High Court
422
citing judgments

Transfer pricing adjustments for outstanding receivables are permissible only if the Tax Officer establishes, through analysis over a period, a pattern indicating an international transaction intended to benefit an associated enterprise. The Tax Officer cannot question purely business decisions like royalty payments or exceed jurisdiction by applying cost-benefit analysis to determine the arm's length price of services.

CIT v. Everest Kento Cylinders Ltd.
378 ITR 57 · 2015 · High Court
304
citing judgments

Corporate guarantee fees are subject to transfer pricing rules, and adjustments may be needed to account for differences between corporate guarantees and more liquid bank guarantees when determining arm's length price.

Maruti Suzuki India Ltd. v. CIT
381 ITR 117 · 2016 · High Court
220
citing judgments

The Bright Line Test (BLT) is not a recognized method under the Income-tax Act and Rules for benchmarking advertising, marketing, and promotion (AMP) expenses or for determining the existence of an international transaction or its Arm's Length Price. The Revenue must first establish the existence and price of an international transaction before seeking an ALP adjustment.

Sony India (P) Ltd. v. DCIT
114 ITD 448 · 2008 · ITAT
131
citing judgments

For transfer pricing purposes, functionally dissimilar entities that have significant business differences must be excluded from the list of comparables for benchmarking analysis. It also provides guidance on the non-allocation of advertisement, marketing, and promotion (AMP) expenses to other entities when incurred solely for the assessee's business.

CIT v. Cushman & Wakefield (India) (P.) Ltd.
367 ITR 730 · 2014 · High Court
120
citing judgments

This case determines the Arm's Length Price (ALP) for intra-group services and reimbursements, clarifying when charges constitute services warranting a mark-up versus mere pass-through costs. It provides guidance on the circumstances under which an ALP adjustment, including an ALP of 'nil', is appropriate for such transactions.

Whirlpool of India Ltd. v. DCIT
381 ITR 154 · 2016 · High Court
119
citing judgments

Advertisement, Marketing, and Promotion (AMP) expenditure incurred by an Indian entity directly benefits its own business and cannot be automatically treated as an international transaction for global brand building by associated enterprises without specific statutory provisions or proper analysis.

CIT v. Tata Autocomp Systems Ltd.
56 Taxmann.com 206 · 2015 · High Court
119
citing judgments

When determining the arm's length price for interest on a foreign currency loan advanced to an Associated Enterprise, the Indian Prime Lending Rate is not applicable. Instead, the interest rate should be benchmarked based on the prevailing foreign currency rate, such as EURIBOR, or the rate in the country where the loan is received/consumed.

Kolhapur Canesugar Works Ltd. v. Union of India
2 SCC 536 · 2000 · Reported
117
citing judgments

Section 6 of the General Clauses Act, which preserves rights and liabilities under repealed statutes, does not automatically apply to a mere omission of a statutory provision unless the omitting enactment specifically provides for it, thereby affecting the continuation of pending proceedings.

Judgments citing transfer pricing adjustment

Relaxo Footwear Ltd., Delhi vs. Assessing Officer, National E- Assesment Centre, New Delhi

In the result, the appeal of the assessee is allowed

ITA 590/DEL/2021[2016-17]Status: FixedITAT Delhi20 Jul 2023AY 2016-17

Bench: Shri M. Balaganesh & Shri Anubhav Sharmaassessment Year: 2016-17 Relaxo Footwear Ltd., Vs Assessing Officer, Plot No.10, Aggarwal City Square, National E-Assessment Centre, Manglam Place Sec.3, New Delhi. New Delhi – 110 085. Pan: Aaacr0259D (Applicant) (Respondent) Assessee By : Shri Ved Jain, Ca Revenue By : Shri R.D. Burman, Cit-Dr Date Of Hearing : 26.06.2023 Date Of Pronouncement : 20.07.2023 Order Per M. Balaganesh, Am: This Appeal In Ita No.590/Del/2021 For Ay 2016-17 Arises Out Of The Order Of The National E-Assessment Centre, Delhi (Hereinafter Referred To As ‘Ld. Ao’) Passed U/S 143(3) R.W.S. 144C & 144C(13) R.W.Ss 143(3A) & 143(3B) Of The Income-Tax Act, 1961 (Hereinafter Referred To As ‘The Act’) Dated 30.03.2021. 2. Though The Assessee Has Raised Several Grounds Before Us, The Only Effective Issue To Be Decided In This Appeal Is As To Whether The Ld. Ao Was Justified In Making Transfer Pricing Adjustment Of Rs.91,04,673/- Pursuant To The Directions Of The Ld. Drp In Respect Of The Specified Domestic Transactions.

For Appellant: Shri Ved Jain, CAFor Respondent: Shri R.D. Burman, CIT-DR
Section 143(3)Section 144C(5)Section 3Section 80I

before us, the only effective issue to be decided in this appeal is as to whether the ld. AO was justified in making transfer pricing adjustment of Rs.91,04,673/- pursuant to the directions of the ld. DRP in respect of the specified domestic transactions. 3. We have heard ... deduction u/s 80IC at 30%. Subsequently, pursuant to the directions of ld. DRP, the ld. TPO passed an order dated 22.03.2021 whereby transfer pricing adjustment amount was worked out at Rs.91,04,673/- and it was observed that deduction shall not be allowed u/s 80IC of the Act in respect

DCIT Central Circle-7, New Delhi vs. Farm2Plate Dairy Produce Pvt. Ltd., New Delhi

In the result, the appeal of the Revenue is dismissed

ITA 7595/DEL/2019[2013-14]Status: DisposedITAT Delhi17 Jul 2023AY 2013-14

Bench: Shri M. Balaganesh & Shri Anubhav Sharmaassessment Year: 2013-14 Dcit, Vs Farm2Plate Dairy Produce Pvt. Ltd., Central Circle-7, F-2/7, Okhla Indl. Area Phase I, New Delhi. New Delhi – 110 020. (Applicant) (Respondent) Assessee By : Shri Rajat Jain & Shri Akshat Jain, Fca Revenue By : Shri Rajesh Kumar, Cit-Dr Date Of Hearing : 04.07.2023 Date Of Pronouncement : 17.07.2023 Order Per M. Balaganesh, Am: This Appeal In Ita No.7595/Del/2019 For Ay 2013-14 Arises Out Of The Order Of The Commissioner Of Income-Tax (Appeal)-44, New Delhi, In Appeal No.32/2018- 19/Cit(A)-44 Dated 28.06.2019 [Hereinafter Referred To As ‘Ld. Cit(A)’, In Short] Against The Order Of Assessment Passed U/S 143(3) R.W.S. 144C Of The Income-Tax Act, 1961 (Hereinafter Referred To As ‘The Act’) Dated 11.01.2017 By The Ld. Income- Tax Officer, Circle 9(1), New Delhi (Hereinafter Referred To As ‘Ld. Ao’). 2. The Only Issue To Be Decided In This Appeal Is As To Whether The Ld.Cit(A) Was Justified In Excluding The Selling Expenses From The Ambit Of Amp Expenses In The Facts & Circumstances Of The Instant Case.

For Appellant: Shri Rajat Jain & Shri Akshat Jain, FCAFor Respondent: Shri Rajesh Kumar, CIT-DR
Section 143Section 143(3)Section 92C

wherein the ld. TPO had adopted ‘Intensity approach’ on substantive basis and ‘Bright Line Test’ on protective basis to justify the transfer pricing adjustment on account of AMP expenses. The ld.CIT(A), by placing reliance on the decision of the Hon’ble Delhi High Court in the case of Sony

Lubrizol India Private Limited, Mumbai vs. NFAC, Delhi

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

ITA 586/MUM/2022[2017-18]Status: DisposedITAT Mumbai30 Jun 2023AY 2017-18

Bench: Shri Aby T. Varkey, Jm & Shri Amarjit Singh, Am आयकर अपील सं/ I.T.A. No.1464/Mum/2021 (निर्धारण वर्ा / Assessment Year: 2015-16) Lubrizol India Pvt. Ltd. Acit, Circle-3(4) बिधम/ Plant 9/3, Thane-Belapur Aayakar Bhavan, Vs. Road, Turbhe, Navi Maharishi Karve Road, Mumbai-400705. Mumbai-400020. आयकर अपील सं/ I.T.A. No.586/Mum/2022 (निर्धारण वर्ा / Assessment Year: 2017-18) Lubrizol India Pvt. Ltd. बिधम/ National Faceless Plant 9/3, Thane-Belapur Assessment Centre, Delhi. Vs. Road, Turbhe, Navi Mumbai-400705. आयकर अपील सं/ I.T.A. No.1576/Mum/2022 (निर्धारण वर्ा / Assessment Years: 2018-19) Lubrizol India Pvt. Ltd. Dcit/Acit, Circle-3(4) बिधम/ Plant 9/3, Thane-Belapur Mumbai. Vs. Road, Turbhe, Navi Mumbai-400705. स्थधयी लेखध सं./जीआइआर सं./Pan/Gir No. : Aaacl0126H (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) Assessee By: Shri Niraj Sheth/Ms. Urvi Mehta/Abdulkadir Jawadwala Revenue By: Shri Aditya M Rai (Sr. Ar) सुनवाई की तारीख / Date Of Hearing: 22/06/2023 घोषणा की तारीख /Date Of Pronouncement: 30/06/2023

For Appellant: Shri Niraj Sheth/Ms. UrviFor Respondent: Shri Aditya M Rai (Sr. AR)
Section 143(3)Section 92C(1)

instead adopting the CUP as the MAM (by relying on the direction of Ld. DRP for AY. 2009-10) and thus making Transfer Pricing adjustment of Rs.25,23,659/-. 4. The assessee has raised the following grounds of appeal regarding the issue of Transfer Pricing (TP) which reads as under ... Assessment Year 2013- 14 (please refer to page Nos. 15 to 22 of the TP Order). Thus, the TPO arrived at a Transfer Pricing adjustment of Rs.25,23,659/- under the CUP method the details of which are given hereunder: After receipt of Transfer Pricing order, the AO passed

M/S. Lubrizol India Pvt. Ltd, Navi Mumbai vs. ACIT Circle 3(4), Mumbai

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

ITA 1464/MUM/2021[2015-16]Status: DisposedITAT Mumbai30 Jun 2023AY 2015-16

Bench: Shri Aby T. Varkey, Jm & Shri Amarjit Singh, Am आयकर अपील सं/ I.T.A. No.1464/Mum/2021 (निर्धारण वर्ा / Assessment Year: 2015-16) Lubrizol India Pvt. Ltd. Acit, Circle-3(4) बिधम/ Plant 9/3, Thane-Belapur Aayakar Bhavan, Vs. Road, Turbhe, Navi Maharishi Karve Road, Mumbai-400705. Mumbai-400020. आयकर अपील सं/ I.T.A. No.586/Mum/2022 (निर्धारण वर्ा / Assessment Year: 2017-18) Lubrizol India Pvt. Ltd. बिधम/ National Faceless Plant 9/3, Thane-Belapur Assessment Centre, Delhi. Vs. Road, Turbhe, Navi Mumbai-400705. आयकर अपील सं/ I.T.A. No.1576/Mum/2022 (निर्धारण वर्ा / Assessment Years: 2018-19) Lubrizol India Pvt. Ltd. Dcit/Acit, Circle-3(4) बिधम/ Plant 9/3, Thane-Belapur Mumbai. Vs. Road, Turbhe, Navi Mumbai-400705. स्थधयी लेखध सं./जीआइआर सं./Pan/Gir No. : Aaacl0126H (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) Assessee By: Shri Niraj Sheth/Ms. Urvi Mehta/Abdulkadir Jawadwala Revenue By: Shri Aditya M Rai (Sr. Ar) सुनवाई की तारीख / Date Of Hearing: 22/06/2023 घोषणा की तारीख /Date Of Pronouncement: 30/06/2023

For Appellant: Shri Niraj Sheth/Ms. UrviFor Respondent: Shri Aditya M Rai (Sr. AR)
Section 143(3)Section 92C(1)

instead adopting the CUP as the MAM (by relying on the direction of Ld. DRP for AY. 2009-10) and thus making Transfer Pricing adjustment of Rs.25,23,659/-. 4. The assessee has raised the following grounds of appeal regarding the issue of Transfer Pricing (TP) which reads as under ... Assessment Year 2013- 14 (please refer to page Nos. 15 to 22 of the TP Order). Thus, the TPO arrived at a Transfer Pricing adjustment of Rs.25,23,659/- under the CUP method the details of which are given hereunder: After receipt of Transfer Pricing order, the AO passed

Juniper Networks Pvt Ltd., Mumbai vs. Asst CIT Circle-2 (4), Mumbai

In the result, appeal filed by the assessee is allowed to be withdrawn

ITA 7755/MUM/2019[2015-16]Status: DisposedITAT Mumbai30 Jun 2023AY 2015-16

Bench: Shri Aby T. Varkey, Jm & Amarjit Singh, Am आयकर अपील सं/ I.T.A. No.7755/Mum/2019 (निर्धारण वर्ा / Assessment Year: 2015-16) Juniper Networks India Pvt. बिधम/ Acit, Circle-2(4) Ltd. Room No. 802, 8Th Floor, Vs. Unit 103, Platina, 1St Floor, Pratishtha Bhavan, Old Plot No. C-59, G Block, Cgo Old Annexe, M. K. Bandra Kurla Complex Road, Mumbai-400020. Road, Bandra (East), Mumbai-400051. स्थधयी लेखध सं./जीआइआर सं./Pan/Gir No. : Aaacj8542K (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) Assessee By: Ms. Komal Mehta Revenue By: Shri Jayant B Jhaveri (Dr) सुनवाई की तारीख / Date Of Hearing: 19/06/2023 घोषणा की तारीख /Date Of Pronouncement: 30/06/2023 आदेश / O R D E R Per Aby T. Varkey, Jm: This Is An Appeal Preferred By The Assessee Company Against The Order Passed U/S 143(3) R.W.S 144C(13) Of The Income Tax Act, 1961 (Hereinafter “The Act”) By Ao Dated 17.10.2019 For Ay 2015-16 Pursuant To The Ld. Dispute Resolution Panel (Drp) Direction On 21.08.2019. 2. The Assessee In This Case Had Filed Its Return Of Income Declaring Total Income Of Rs.174,96,10,270/-. Later On, The Case Was Selected For Scrutiny & The Ao Referred Certain Issues To The Transfer Pricing Officer (Tpo) Who Made Adjustment Of Rs.74,31,05,490/- For Software Development Services (Sds), Information Technology Enable Services (Ites) & Mark-Up On Employee Stock Purchase Plan (Espp). According To The Ld. Ar, The Assessee In Order To Resolve The Transfer Pricing Disputes In Respect Of Transactions With Its Associated Enterprise (Ae) (I.E. M/S. Jni), It Had Approached The Competent Authorities As Per Article 27 (Map) Of The India United States Tax

For Appellant: Ms. Komal MehtaFor Respondent: Shri Jayant B Jhaveri (DR)
Section 143(3)

India United States Tax 2 A.Y. 2015-16 Juniper Networks India Treaty. And the MAP proceeding was in respect of Transfer Pricing adjustment made to the income of the assessee viz, International transactions of SDS, ITeS and mark-up on ESPP costs between the assessee and JNI. Pursuant