“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

M/S. Buro Happold Ltd., Mumbai vs. Dy CIT (International Taxation) -1(3)(2), Mumbai

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

ITA 951/MUM/2021[2017-18]Status: DisposedITAT Mumbai07 Jan 2022AY 2017-18

Bench: Shri Prashant Maharishi & Shri Pavan Kumar Gadalem/S. Buro Happold Ltd Vs. Dcit (It) – 1(3)(2) C/O. Urmi Axis, 6Th 1810, 18Th Floor, Air Floor, Famous Studio India Bldg, Lane, Dr. Emoses Road, Narimanpoint,Mumbai- Mahalaxmi, Mumbai – 400 021. 400011. "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aabcb9239Q Appellant .. Respondent Appellant By : Mr.Anuj Kisnadwala. Ar Respondent By : Mr.Milind Chavan, Sr. Dr Date Of Hearing 08.12.2021 Date Of Pronouncement 10.01.2022 आदेश / O R D E R Per Pavan Kumar Gadale Jm: The Assessee Has Filed The Appeal Against The Assessment Order Passed U/S 143(3) R.W.S 144C(13) Of The Income Tax Act, 1961 In Pursuance To The Directions Of The Dispute Resolution Panel (Drp) U/Sec144C(5) Of The Act.

For Appellant: Mr.Anuj Kisnadwala. ARFor Respondent: Mr.Milind Chavan, Sr. DR

Section 143(2)Section 143(3)Section 144C(1)Section 234B

included for taxation dated 20.12.2019 referred at Para 6(a) of the assessment order. M/s Buro Happold Ltd, Mumbai. 3. Whereas in respect of management fees & common cost recharge of Rs4,39,80,878/- which is not included in total income by the assessee as they does not make available ... Mumbai. grounds i.e addition of Rs. 46,20,066/- made towards consulting engineering services and addition of Rs. 4,39,80,878/- made towards management fees and common cost recharge. The DRP stated that in the A.Y 2015-16, it was observed by the DRP that once a new agreement

M/S Euronet Services India Pvt Lt D, Bangalore vs. Deputy Commissioner of Income Tax Circle-2(1)(2), Bangalore

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

ITA 329/BANG/2017[2012-13]Status: DisposedITAT Bangalore27 Dec 2021AY 2012-13

Bench: Shri George George K. & Shri B.R. Baskaranit(Tp)A No.329/Bang/2017 Assessment Year : 2012-13

For Appellant: Shri K.R. Vasudevan, A.RFor Respondent: Shri Sanjay Kumar, D.R

Section 10ASection 143(3)

following payments made to its A.E. Nature Amount (Rs.) Switch, AMC, Maintenance fee 2,39,07,366 License fee 2,35,63,800 Corporate Management fee 1,33,20,286 Total 6,07,91,452 3. The A.O. accepted the first two payments to be at arm’s length ... respect of payment of corporate management fee, the TPO held that the assessee has failed to prove the arm’s length nature of technical and corporate management fee. Accordingly, he took the ALP of corporate management fee at Nil and made transfer pricing adjustment f Rs.1

ACIT, Circle- 28(1), New Delhi vs. Chadha Power, New Delhi

In the result, the appeal filed by the Revenue is dismissed

ITA 3055/DEL/2018[2013-14]Status: DisposedITAT Delhi23 Dec 2021AY 2013-14

Bench: Hon’Ble, Shri G.S. Pannu & Shri Amit Shukla

For Appellant: Shri Rakesh Gupta, AdvocateFor Respondent: Ms. Yagyasaini Kakkar, CIT DR

Section 143(3)Section 40

ending 31.12.2012, revealed that the said entity earned gross income of 1,483,450 AED, out of which sales were 980,664 AED and management fee of Rs.502,786 AED. Against this, revenue expenses have been shown at 526,718 AED, Finance cost of 1148 AED and net profit ... amount of management fees aggregating to 502,786 AED was in the form of reimbursement of expenses by Chadha Power, India to Chadha Projects JLT, Dubai with a 10% mark-up. After considering the assessee’s detailed reply, the AO held that entire amount paid to Chadha Projects JLT, Dubai

Metalsa India Pvt. Ltd., New Delhi vs. DCIT, Circle-16(2), New Delhi

In the result, appeal of the assessee is allowed

ITA 449/DEL/2019[2012-13]Status: DisposedITAT Delhi07 Dec 2021AY 2012-13

Bench: Shri Amit Shukla & Dr. B.R.R. Kumar(Through Video Conferencing)

For Appellant: Shri Pradeep Dinodia, C. AFor Respondent: Shri Mrinal Kumar Das, Sr

Section 143(3)Section 271(1)(c)Section 92C

trucks in North America. 4. The only issue under dispute pertains to determination of ALP of international transaction in the nature of payment of management fees amounting to Rs. 69,65,962/-,by the appellant to its parent AE, Metalsa Mexico for availing the Intra Group services ... working of cost allocation made by AE was enclosed at PB Page No. 115-116. It was further stated that while making allocation for management fee, the AE only recharged the actual cost so allocated without any mark-up on such costs. 9. The ld. AR submitted that

Jas Forwarding Worldwide Pvt. Ltd., Gurgaon vs. DCIT, New Delhi

In the result appeal of the assessee for assessment year 2011 – 12 is allowed for statistical purposes

ITA 1687/DEL/2016[2011-12]Status: DisposedITAT Delhi26 Jul 2021AY 2011-12

Bench: Shri Amit Shukla & Shri Prashant Maharishi(Through Video Conferencing)

For Appellant: Shri Salil Kapoor advocateFor Respondent: Shri M. Barnwal, Sr. DR

Section 143Section 143(3)Section 144CSection 144C(1)Section 144C(5)Section 40Section 92CSection 92C(2)

associated enterprise amounting to ₹ 398,000 608,000, freight and forwarding services received from associated enterprise of ₹ 245,000 582,000 is and management fees of 14,000 132,000. The assessee has benchmark this transaction considering the most appropriate method is transactional net margin method aggregating all its international ... transfer pricing officer denied the working capital adjustment is no justification was given by the assessee. He recast Margins of the assessee by disallowing management fees and computed the same at 5.32 percentage and compared it with the arm’s-length margin of comparable companies is 13.83% as and proposed

Jas Forwarding Worldwide Pvt. Ltd., New Delhi vs. DCIT, New Delhi

In the result appeal of the assessee for assessment year 2011 – 12 is allowed for statistical purposes

ITA 2484/DEL/2014[2009-10]Status: DisposedITAT Delhi26 Jul 2021AY 2009-10

Bench: Shri Amit Shukla & Shri Prashant Maharishi(Through Video Conferencing)

For Appellant: Shri Salil Kapoor advocateFor Respondent: Shri Surendra Pal [CIT] – DR

Section 143Section 143(3)Section 144CSection 144C(1)Section 144C(5)Section 40Section 92CSection 92C(2)

ACIT(E)- Circle- 1(1), New Delhi vs. India Hiv/ Aida Alliance Promotion, New Delhi

In the result appeal of the assessee in ITA number

ITA 7450/DEL/2017[2014-15]Status: DisposedITAT Delhi22 Mar 2021AY 2014-15

Bench: N.K. Billaiya & Before Ms. Suchitra Kamble, Ita No.7449 /Del/2017 [Assessment Year: 2013-14] [Assessment Year: 2014-15]

Section 11Section 12Section 2Section 25Section 80

separately charging the donors for salary to its staff in components of human resources expenses , training and infrastructure and equipments and along with the management fee over and above the running cost . Therefore assessee is carrying on the business activity and falling into the last limb of provisions of section ... activities does not become a business activity or non charitable. Further for the purpose of implementation of each of the project, it charges the management fees to defray all other expenditure and administrative cost of the assessee. Merely charging the management fees does not make the activity of the medical

ACIT(E)- Circle- 1(1), New Delhi vs. India Hiv/ Aida Alliance Promotion, New Delhi

In the result appeal of the assessee in ITA number

ITA 7449/DEL/2017[2013-14]Status: DisposedITAT Delhi22 Mar 2021AY 2013-14

Bench: N.K. Billaiya & Before Ms. Suchitra Kamble, Ita No.7449 /Del/2017 [Assessment Year: 2013-14] [Assessment Year: 2014-15]

Section 11Section 12Section 2Section 25Section 80

ACIT, Circle- 1, Ltu, New Delhi vs. Power Finance Corporation Ltd., New Delhi

In the result, all these appeals are dismissed

ITA 1744/DEL/2018[2014-15]Status: DisposedITAT Delhi11 Mar 2021AY 2014-15

Bench: Shri Amit Shukla & Shri Anadee Nath Misshra

For Appellant: Ms. Aggarta Gupta, CAFor Respondent: Smt. Sushma Singh, CIT(DR)

learned CIT(A) has erred both on facts and in law in confirming the action of the AO in excluding upfront fees and management fees from the net total income while computing deduction under section 36(1)(viii) of the Income Tax Act. (iii) In the facts and circumstances