“management fees”

Transfer PricingSection 92BSection 92B344 judgments

The decision most relied on for management fees is J.K. (Bom.) Limited v. CBDT and Another (118 ITR 312), cited in 50 judgments on BharatTax.

Leading authorities on management fees

J.K. (Bom.) Limited v. CBDT and Another

118 ITR 312 · 1979 · High Court

citing judgments

The case elucidates the meaning of 'management services', detailing its components and considering whether such services qualify as 'technical services' for income tax purposes, particularly in relation to fees for technical services.

Commissioner of Income Tax v. Merck Ltd.

389 ITR 70 · 2016 · High Court

citing judgments

Ad-hoc transfer pricing adjustments are not justified if the Transfer Pricing Officer fails to apply one of the prescribed methods under Section 92C. The arm's length nature of international transactions, including intra-group services and management fees, should be determined through a detailed FAR analysis and benchmarking study.

DIT v. HCL Infosystems Ltd.

144 Taxmann 492 · 2005 · High Court

citing judgments

Reimbursement of salary costs of employees is not taxable as Fees for Technical Services (FTS) under the Act. Additionally, for a fixed place Permanent Establishment (PE) or place of management to exist, business premises must be made available or a right to use them must be established.

US Technology Resources (P) Ltd. v. CIT

97 Taxmann.com 642 · 2018 · High Court

citing judgments

Payments for advice on management, financial, or legal services, offered on a factual basis without transferring technical know-how, are not taxable in India as fees for technical services.

CIT v. Edward Keventer (P.) Ltd.

115 ITR 149 · 1978 · Supreme Court

citing judgments

When assessing expenses under Section 40A(2), tax authorities must consider the entire position judiciously from the viewpoint of a prudent businessman, not arbitrarily or capriciously. The revenue must demonstrate tax evasion and cannot disallow expenses if the recipient is taxed at the same or higher rate.

Gujarati Charitable Foundation Poona (2018) 402 ITR 441(SC) 4. CIT v. Sardarilal& Co.

266 CTR 181 · 2014 · Reported

citing judgments

The denial of exemption under Section 11 is justified if trustees manage the trust's finances as their personal business, collecting excess fees from students.

(v). Wockhardt Ltd. v. ACIT

10 Taxmann.com 208 · 2011 · Reported

citing judgments

Services rendered by employees of a non-resident company, which involve sharing management experiences and business strategies, are not considered technical services for the purpose of taxation as Fees for Technical Services (FTS).

Gemplus India (P) Ltd. v. ACIT

3 Taxmann.com 755 · 2010 · ITAT

citing judgments

The Assessing Officer (AO) may determine the Arm's Length Price (ALP) to be 'Nil' for intra-group services if the services were not actually rendered or if the payment is not commensurate with the benefits derived. This position aligns with the Gemplus India case where management fees were challenged.

Judgments citing management fees

Yokogawa India Limited, Bangalore vs. Deputy Commissioner of Income Tax Large Taxpayers Unit, Bangalore

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

ITA 2088/BANG/2017[2013-14]Status: DisposedITAT Bangalore01 Feb 2024AY 2013-14

Bench: Shri George George K. & Shri Laxmi Prasad Sahu

For Appellant: Shri Nageshwar Rao, AdvocateFor Respondent: Ms. Neera Malhotra, CIT(DR)(ITAT), Bengaluru

Section 143(3)Section 14A

order inappropriately determines the ALP of payment of GSMAF by using the bright line test which is not a method recognized under the Act. Management Fees ("MF") 10. Impugned order erroneously determines the TP adjustment in relation to MF by concluding that the Arm's Length Price ... Commission received 35.075,154 Income from rendering of engineering services 726,227,657 Payment of CEC support fees 15,276,100 Management fees 6,149,549 Global sales and marketing activity fee 21,101,417 Reimbursement expenses 6,855,392 Total 3,169,278,001 Page

M/S. United Breweries Limited, Bangalore vs. Deputy Commissioner of Income-Tax, Circle-7(1)(1), Bengaluru

In the result, both the appeals filed by the assessee stands partly allowed for statistical purposes

ITA 1020/BANG/2023[2020-21]Status: DisposedITAT Bangalore31 Jan 2024AY 2020-21

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Respondent: Shri K R Vasudevan &

Section 143(3)Section 147Section 148

Mumbai bench of Tribunal on an identical issue:- “3. Second ground of appeal pertains to deleting the disallowance on account of sponsorship fees and management fees. In the earlier part of our order, we have mentioned the facts about the various disallowances made by the AO including the capitalisation ... Co.Ltd.(115 ITR 659) of the honorable Delhi High Court, the FAA allowed the appeal filed by the assessee. 3.1.a. With regard to management fee, the FAA observed that there was no doubt about the genuineness of expenditure, that the expenditure was incurred for availing infrastructure facilities administrative support

M/S. United Breweries Limited, Bangalore vs. Deputy Commissioner of Income-Tax, Circle-7(1)(1), Bengaluru

ITA 1019/BANG/2023[2012-13]Status: DisposedITAT Bangalore31 Jan 2024AY 2012-13

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri K R Vasudevan & Shri Ankur Pai, AdvocatesFor Respondent: Shri D.K. Mishra, CIT DR

Section 143(3)Section 147Section 148

IN THE INCOME TAX APPELLATE TRIBUNAL 'A' BENCH : BANGALORE BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL

ACIT, New Delhi vs. M/S. Wimco Greens, New Delhi

ITA 2110/DEL/2010[1997-98]Status: DisposedITAT Delhi29 Jan 2024AY 1997-98

Bench: Shri G.S. Pannu, Hon’Ble & Shri Anubhav Sharma

Section 143(3)Section 147Section 148

facts and circumstances of the case, the CIT(A) has erred in law and on facts in deleting the addition made in respect of management fees and licence fee on receipt basis by the AO to the income of the assessee. 2. On the facts and circumstances of the case ... erred in law and on facts in directing the AO to recomputed the income of the assessee from management fees and licence fees on accrual basis of l/8th of the total as claimed by the assessee. 3. On the facts and circumstances of the case, the CIT(A) has failed

Tagit Pte Ltd, Singapore vs. DCIT, Circle-3(1)(1), International Taxation, New Delhi

In the result, appeal of the assessee is allowed

ITA 1945/DEL/2022[2019-20]Status: DisposedITAT Delhi17 Jan 2024AY 2019-20

Bench: Shri Saktijit Dey & Dr. B.R.R. Kumar[Assessment Year: 2019-20]

Section 143(3)Section 9(1)(vii)

receipts earned in India. On examining the details, the Assessing Officer found that assessee had following receipts:- i. Rs.2,55,02,202/- towards Management Fees from Tagit India Pvt. Ltd. ii. Rs.1,60,00,000/- towards License Fees from AU Small Finance Bank Ltd. 4. In so far as Management

The ACIT, Circle-1(1)(1), Vadodara vs. Schaeffler India Limited (Earlier Known As Fag Bearings India Ltd.), Vadodara

Appeals are partly allowed for statistical purposes and Department’s appeals are dismissed

ITA 150/AHD/2023[2013-14]Status: DisposedITAT Ahmedabad12 Jan 2024AY 2013-14

Bench: Shri Waseem Ahmed & Shri Siddhartha Nautiyal

For Appellant: Shri Bhavin Marfatia, A.RFor Respondent: Dr. Darsi Suman Ratnam, CIT D.R. & Shri

Section 234Section 234ASection 271(1)(c)Section 37Section 90(2)

Department’s appeal are dismissed. Now we shall take up Ground Nos. 4 to 6 of the Department’s Appeal (TP Adjustment – Management Fees Rs. 6,72,66,305/-) 20. The brief facts in relation to these grounds of appeal are that assessee paid ... Company Ltd. and a sum of Rs. 31,63,877/- to Schaeffler GmbH as management fees. The Assessing Officer held that the nature of support provided by Schaeffler China is in the nature of “Stewardship Activity” and hence does not entail any management fees to be paid. Without prejudice

The ACIT, Circle-1(1)(1), Vadodara vs. Schaeffler India Limited (Earlier Known As Fag Bearings India Ltd.), Vadodara

Appeals are partly allowed for statistical purposes and Department’s appeals are dismissed

ITA 149/AHD/2023[2012-13]Status: DisposedITAT Ahmedabad12 Jan 2024AY 2012-13

Bench: Shri Waseem Ahmed & Shri Siddhartha Nautiyal

For Appellant: Shri Bhavin Marfatia, A.RFor Respondent: Dr. Darsi Suman Ratnam, CIT D.R. & Shri

Section 234Section 234ASection 271(1)(c)Section 37Section 90(2)

The ACIT, Circle-1(1)(1), Vadodara vs. Schaeffler India Limited (Earlier Known As Fag Bearings India Ltd.), Vadodara

Appeals are partly allowed for statistical purposes and Department’s appeals are dismissed

ITA 148/AHD/2023[2011-12]Status: DisposedITAT Ahmedabad12 Jan 2024AY 2011-12

Bench: Shri Waseem Ahmed & Shri Siddhartha Nautiyal

For Appellant: Shri Bhavin Marfatia, A.RFor Respondent: Dr. Darsi Suman Ratnam, CIT D.R. & Shri

Section 234Section 234ASection 271(1)(c)Section 37Section 90(2)

The ACIT, Circle-1(1)(1), Vadodara vs. Schaeffler India Limited (Earlier Known As Fag Bearings India Ltd.), Vadodara

Appeals are partly allowed for statistical purposes and Department’s appeals are dismissed

ITA 147/AHD/2023[2010-11]Status: DisposedITAT Ahmedabad12 Jan 2024AY 2010-11

Bench: Shri Waseem Ahmed & Shri Siddhartha Nautiyal

For Appellant: Shri Bhavin Marfatia, A.RFor Respondent: Dr. Darsi Suman Ratnam, CIT D.R. & Shri

Section 234Section 234ASection 271(1)(c)Section 37Section 90(2)

Schaeffler India Limited (Earlier Known As Fag Bearings India Ltd.), Vadodara vs. The Assistant Commissioner of Income Tax, Circle-1(1)(2) Now Circle-1(1)(1), Vadodara

Appeals are partly allowed for statistical purposes and Department’s appeals are dismissed

ITA 137/AHD/2023[2014-15]Status: DisposedITAT Ahmedabad12 Jan 2024AY 2014-15

Bench: Shri Waseem Ahmed & Shri Siddhartha Nautiyal

For Appellant: Shri Bhavin Marfatia, A.RFor Respondent: Dr. Darsi Suman Ratnam, CIT D.R. & Shri

Section 234Section 234ASection 271(1)(c)Section 37Section 90(2)

Schaeffler India Limited (Earlier Known As Fag Bearings India Ltd.), Vadodara vs. The Assistant Commissioner of Income Tax, Circle-1(1)(2) Now Circle-1(1)(1), Vadodara

Appeals are partly allowed for statistical purposes and Department’s appeals are dismissed

ITA 136/AHD/2023[2013-14]Status: DisposedITAT Ahmedabad12 Jan 2024AY 2013-14

Bench: Shri Waseem Ahmed & Shri Siddhartha Nautiyal

For Appellant: Shri Bhavin Marfatia, A.RFor Respondent: Dr. Darsi Suman Ratnam, CIT D.R. & Shri

Section 234Section 234ASection 271(1)(c)Section 37Section 90(2)

Schaeffler India Limited (Earlier Known As Fag Bearings India Ltd.), Vadodara vs. The Assistant Commissioner of Income Tax, Circle-1(1)(2) Now Circle-1(1)(1), Vadodara

Appeals are partly allowed for statistical purposes and Department’s appeals are dismissed

ITA 135/AHD/2023[2012-13]Status: DisposedITAT Ahmedabad12 Jan 2024AY 2012-13

Bench: Shri Waseem Ahmed & Shri Siddhartha Nautiyal

For Appellant: Shri Bhavin Marfatia, A.RFor Respondent: Dr. Darsi Suman Ratnam, CIT D.R. & Shri

Section 234Section 234ASection 271(1)(c)Section 37Section 90(2)

Schaeffler India Limited (Earlier Known As Fag Bearings India Ltd.), Vadodara vs. The Assistant Commissioner of Income Tax, Circle-1(1)(2) Now Circle-1(1)(1), Vadodara

Appeals are partly allowed for statistical purposes and Department’s appeals are dismissed

ITA 134/AHD/2023[2011-12]Status: DisposedITAT Ahmedabad12 Jan 2024AY 2011-12

Bench: Shri Waseem Ahmed & Shri Siddhartha Nautiyal

For Appellant: Shri Bhavin Marfatia, A.RFor Respondent: Dr. Darsi Suman Ratnam, CIT D.R. & Shri

Section 234Section 234ASection 271(1)(c)Section 37Section 90(2)

Schaeffler India Limited (Earlier Known As Fag Bearings India Ltd.), Vadodara vs. The Assistant Commissioner of Income Tax, Circle-1(2) Now Circle-1(1)(1), Vadodara

Appeals are partly allowed for statistical purposes and Department’s appeals are dismissed

ITA 133/AHD/2023[2010-11]Status: DisposedITAT Ahmedabad12 Jan 2024AY 2010-11

Bench: Shri Waseem Ahmed & Shri Siddhartha Nautiyal

For Appellant: Shri Bhavin Marfatia, A.RFor Respondent: Dr. Darsi Suman Ratnam, CIT D.R. & Shri

Section 234Section 234ASection 271(1)(c)Section 37Section 90(2)

The Dy.CIT, Circle-1(1)(1), Vadodara vs. Ina Bearing India Pvt. Ltd., Pune

In the result, Ground Nos

ITA 540/AHD/2022[2014-15]Status: DisposedITAT Ahmedabad12 Jan 2024AY 2014-15

Bench: Shri Waseem Ahmed & Shri Siddhartha Nautiyal

For Appellant: Shri Bhavin Marfatia, A.RFor Respondent: Dr. Darsi Suman Ratnam, CIT D.R

erred in deleting the upward adjustment of Rs.10,89,85,477/- made by the TPO in respect of benchmarking of management fees following the decision of the Hon'ble ITAT, Pune in the assessee's own case for the A.Y, 2011-12, without appreciating the fact that every assessment year ... erred in deleting the upward adjustment of Rs.5,62,11,209/- made by the TPO in respect of benchmarking of management fees following the decision of the Hon'ble ITAT, Pune in the assessee's own case for the A.Y. 2011-12, without appreciating the fact that every assessment year

The Dy.CIT, Circle-1(1)(1), Vadodara vs. Ina Bearing India Pvt. Ltd., Pune

In the result, Ground Nos

ITA 539/AHD/2022[2013-14]Status: DisposedITAT Ahmedabad12 Jan 2024AY 2013-14

Bench: Shri Waseem Ahmed & Shri Siddhartha Nautiyal

For Appellant: Shri Bhavin Marfatia, A.RFor Respondent: Dr. Darsi Suman Ratnam, CIT D.R

Ahlstrom Fibercomposites India Pvt. Ltd., Mundra (Kutch) vs. The Dy. Commr. of Income Tax, Gandhidham Circle, Gandhidham

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

ITA 437/RJT/2018[2014-15]Status: DisposedITAT Rajkot20 Dec 2023AY 2014-15

Bench: Ms Suchitra Kamble & Shri Waseem Ahmedआयकरअपीलसं./Ita No. 437/Rjt/2018 धििाधरणणवध/Asstt. Year:2014-2015 Ahlstrom Munksjo Vs. D.C.I.T, Fibercomposites(India) Pvt. Ltd., Gandhidham Circle, Mundra Sez Integrated Textile & Gandhidham. Apparel Park (Mitap), Plot No.07, Survey No.141, Mundra, Kutch-370421. Pan: Aagca9137M (Applicant) (Respondent) Assessee By : Shri Tushar Hemani, A.R Revenue By : Shri Shramdeep Sinha, C.I.T Dr सुिणाईकीतारीख/Date Of Hearing : 06/12/2023 घोवणाकीतारीख/Date Of Pronouncement: 20/12/2023 आदेश/O R D E R Per Waseem Ahmed:

For Appellant: Shri Tushar Hemani, A.RFor Respondent: Shri Shramdeep Sinha, C.I.T DR

Section 143(3)Section 144C(13)Section 37(1)Section 40Section 92

that the addition made by the Learned AO / TPO in relation to the international transaction of sales to AEs be deleted. 2. Disallowance of Management fees and Business Area Service fees under section 37(1) of the Act 2.1 On the facts and in the circumstances of the case ... Learned AO has erred in and learned DRP has further erred in confirming disallowance of payment of Management fees and Business Area Service fees amounting to INR 53,259,975 under section 37(1) of the Act. 2.2 On the facts and in the circumstances of the case

Cameron(Singapore) Pte. Ltd., Tamilnadu vs. ACIT, Circle Int. Tax-1(2)(1), Delhi

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

ITA 9110/DEL/2019[2016-17]Status: DisposedITAT Delhi11 Dec 2023AY 2016-17

Bench: Shri G. S. Pannu, Hon’Ble Vice-A N D Shri Challa Nagendra Prasadआ.अ.सं/.I.T.A No.9110/Del/2019 िनधा"रणवष"/Assessment Years: 2016-17 Cameron (Singapore) Pte Ltd., Acit, बनाम C/O. Cameron Manufacturing Vs. (India) Pvt. Ltd., Circle Int. Tax: 1(2)(1) Iii Floor, Tidel Park, Vilankurichi Road, Civil New Delhi. Aerodrome Post, Coimbatore, Tamil Nadu – 641 014. Pan No. Aadcc5259P अपीलाथ" / Appellant ""यथ"/ Respondent

For Appellant: Shri Amit Arora, C. A

Section 143(3)Section 144C(13)Section 144C(5)Section 234BSection 271(1)(c)Section 9(1)(vii)

India the assessee is required to provide the following services: I.T.A. No. 9110/Del/2019 S. Particulars Description of Remarks No. service 1. International Assists in Management fees would purchasing procurement of goods not make available in International technical knowledge, market. This includes experience, skill, know- reference to the how or process ... vendors service receiver (CMI) 2. International Assists the group Management fees would marketing and companies to identify not make available sales potential business technical knowledge, opportunities and experience, skill, know- customers for the how or process to products and services service receiver (CMI) 3. Accounting Assistance in Management fees would

Iss Facility Services India P. Ltd., Mumbai vs. The Asstt. CIT, Circler-2(1)(1), Mumbai

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

ITA 1366/MUM/2021[2016-17]Status: DisposedITAT Mumbai29 Nov 2023AY 2016-17

For Appellant: Nikhil TiwariFor Respondent: Anil Sant

Section 14ASection 92C

dismissed as not pressed. Ground No. 2 to 10: 4. These grounds are pertained to the issue of payment of Global Corporate Client Management Fees by the assessee to its associate enterprise. As per the arrangement associate enterprise provides services in relation to support for regional relationship management with client ... referred above. The relevant extract of the decision is reproduced as under: “3.9 As regards the international transaction of Payment of Global Client Management Fee, it is also evident that TPO in subsequent assessment years has partially accepted the assessee’s submission of rendition of service by AE and made

ACIT, Circle-26(2), New Delhi vs. Vital Construction Pvt. Ltd., New Delhi

In the result, the appeal of revenue is dismissed

ITA 70/DEL/2019[2012-13]Status: DisposedITAT Delhi17 Nov 2023AY 2012-13

Bench: Dr. B. R. R. Kumarms. Astha Chandra

For Appellant: Sh. Ajay Bhagwani, CAFor Respondent: Sh. Vivek Vardhan, Sr. DR

Section 143(3)

building: Rs.1,24,72,305/- B Rs.1,25,38,998/- Maintenances expense Plant and Machinery: C Maintenances expense Other: Rs.67,09,162/- D Project Management Fees: Rs.55,00,000/- E Security and Housekeeping: Rs.2,66,49,620/- F Electricity and water charges: Rs.3,11,11,565/- Total Rs.9