“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

Criteo Singapore Pte. Ltd., Singapore vs. ACIT Ciricle 1(2)(1) International Taxation, New Delhi

In the result, the appeal of the assessee in ITA No

ITA 2122/DEL/2023[2020-21]Status: DisposedITAT Delhi18 Dec 2024AY 2020-21

Bench: Shri Saktijit Dey & Shri Naveen Chandra

For Appellant: Shri S.K. Aggarwal, CAFor Respondent: Shri Vijay B. Vasanta, CIT- DR

Section 139(1)Section 143(3)Section 244ASection 270ASection 9(1)(vi)Section 9(1)(vii)

resource (‘HR’), legal, statutory compliance, business support, information technology (‘IT’), etc. for the APAC region (including India) on need-basis for which it charges management fees. The assessee has provided such Business Support Services to all the group companies in the APAC region (including Criteo India) on a recurring basis

Topzone Mercantile Company LLP, Mumbai vs. The Assistant Commissioner of Income Tax, Circle 21(3), Mumbai

Appeal of the appellant is allowed for statistical purposes

ITA 4294/MUM/2024[2016-17]Status: DisposedITAT Mumbai11 Dec 2024AY 2016-17

Bench: Smt. Kavitha Rajagopal (Jm) & Shri Omkareshwar Chidara (Am)

Section 250

follows while completing the assessment order :- a) Disallowance of payment towards relinquishment of rights by Piramal Enterprises Ltd. – Rs. 14 lakhs. b) Disallowance of management fees – Rs. 76,66,199/- c) Marketing support services – Rs. 9,20,489/- d) Disallowance of project expenses – Rs. 5,47,47,934/- e) Security

ITO 14(1)(1), Mumbai vs. Amo Communications Private Limited, Mumbai

In the result, the appeal of the Revenue is dismissed

ITA 428/MUM/2024[2011-12]Status: DisposedITAT Mumbai02 Dec 2024AY 2011-12

Bench: Justice (Retd.) Shri C.V. Bhadang & Shri B.R. Baskaranassessment Year : 2011-12

For Appellant: Shri Kiran KapadiaFor Respondent: Shri Akshay Tapdiya, Sr.DR

decision of the Ld.Addl/JCIT(A) in granting relief in respect of disallowances expenses relating to purchase of goods and services and payment of management fees. 2 2. The facts relating to the case are stated in brief. The assessee is carrying on the business of advertising. During the course ... bogus in nature and accordingly added the same to the total income of the assessee.The AO also noticed that the assessee has paid management fee of Rs. 80 lakhs to M/s. Percept Ltd. Though the assessee furnished all the evidences in support of the above said payment

Otis Elevator Company (India) Limited, Mumbai vs. DCIT, 13(1)(2), Mumbai

ITA 3337/MUM/2024[2020-21]Status: DisposedITAT Mumbai29 Nov 2024AY 2020-21

Bench: Shri Narendra Kumar Billaiya, Hon'Ble & Shri Sunil Kumar Singh, Hon'Bleι.Τ.Α. No. 3337/Mum/2024

For Appellant: Shri Rajan Vora & Nikhil Tiwari, A/RsFor Respondent: Shri Asif Karmali, Sr. D/R

Section 143(3)Section 144C(13)Section 234ASection 234CSection 234FSection 270A(1)Section 37(1)Section 92CSection 92C(3)

Appellant under Section 92CA(3) of the Act, by treating the Arm's Length Price ('ALP') of international transaction of Payment of Management fee under an inter- company service agreement entered into with its Associated Enterprise ('AE') i.e., M/s. Otis International Asia Pacific Pte. Ltd as NIL; Disregarding the benchmarking ... keys; Disregarding the commercial expediency of the international transaction: 7. erred in not considering the commercial expediency of the international transaction of payment of management fees and without appreciating the business requirement for availing services from AE, and held its arm's length price as Nill; Rejected TNMM method applied

Schaeffler India Limited, Vadodara, Gujarat vs. Assistant Director of Income Tax, CPC, Bangalore (Jao-Deputy Commissioner of Income Tax Circle1(1)(1), Vadodara, Gujarat

ITA 692/AHD/2024[2019-20]Status: DisposedITAT Ahmedabad27 Nov 2024AY 2019-20

Bench: Smt. Annapurna Gupta & Shri Siddhartha Nautiyal

For Appellant: Shri Bhavin Marfatia, A.RFor Respondent: Shri Prathvi Raj Meena, CIT D.R. & Smt

Section 143(3)Section 144CSection 234Section 271(1)(c)Section 37

appeal of the Department on this issue. 10. The brief facts / background relating to this issue is that the assessee company had paid management fees to Schaeffler Holding China Company (“Associated Enterprise”) and bench-marked the transaction by using TNMM. The Transfer Pricing Officer determined ALP of the transaction ... Schaeffler Holding (China) 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

The ACIT, Circle-1(1)(1), Vadodara vs. Schaeffler India Ltd.( Erstwhile Luk India Pvt. Ltd)), Vadodara

ITA 299/AHD/2023[2012-13]Status: DisposedITAT Ahmedabad27 Nov 2024AY 2012-13

Bench: Smt. Annapurna Gupta & Shri Siddhartha Nautiyal

For Appellant: Shri Bhavin Marfatia, A.RFor Respondent: Shri Prathvi Raj Meena, CIT D.R. & Smt

Section 143(3)Section 144CSection 234Section 271(1)(c)Section 37

Schaeffler India Ltd.(A Successor of Luk India Pvt. Ltd)), Vadodara vs. The ACIT, Circle-1(1)(1) (Earlier ACIT, Circle-1, Hosur), Vadodara

ITA 275/AHD/2023[2012-13]Status: DisposedITAT Ahmedabad27 Nov 2024AY 2012-13

Bench: Smt. Annapurna Gupta & Shri Siddhartha Nautiyal

For Appellant: Shri Bhavin Marfatia, A.RFor Respondent: Shri Prathvi Raj Meena, CIT D.R. & Smt

Section 143(3)Section 144CSection 234Section 271(1)(c)Section 37

Assistant Commissioner of Income Tax, Delhi vs. Vireet Investments Private Limited, Delhi

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

ITA 938/DEL/2024[2004-05]Status: DisposedITAT Delhi06 Nov 2024AY 2004-05

Bench: Shri S.Rifaur Rahman & Shri Sudhir Kumaracit, Circle 17 (1) Vs. Vireet Investments Pvt. Ltd., Delhi. 21D, Friends Colony West, New Delhi – 110 065. (Pan : Aaacv2033M) (Appellant) (Respondent) Assessee By : Shri Manish Jain, Ca Revenue By : Ms. Sapna Bhatia, Cit Dr Date Of Hearing : 04.09.2024 Date Of Order : 06.11.2024 Order Per S.Rifaur Rahman,Am: 1. The Appeal Has Been Filed By The Assessee Against The Order Of The Learned Commissioner Of Income Tax (Appeals), Delhi/National Faceless Appeal Centre (Nfac) [“Ld. Cit(A)”, For Short] Dated 28.12.2023 For The Assessment Year 2004-05. 2. Brief Facts Of The Case Are, Assessee Filed Its Return Of Income For Assessment Year 2004-05 On 31.10.2004 Declaring Income Of Rs.34,80,69,911/-. The Same Was Processed Under Section 143 (1) Of The 2 Income-Tax Act, 1961 (For Short ‘The Act’) On 28.12.2004. The Case Was Selected For Scrutiny & Notices U/S 143(2) & 142(1) Of The Act Were Issued & Served On The Assessee. In Response, Ld. Ar For The Assessee Attended From Time To Time & Submitted Relevant Information As Called For. 3. The Assessee Was Incorporated On 03.10.1983 With The Main Objects, As Per Memorandum Of Association, To Acquire & Hold Shares, Stocks, Debentures, Debenture Stocks, Bonds, Obligations & Securities Issued Or Guaranteed By Any Company Constituted Or Carried On Business In The Republic Of India. After Considering The Submissions Of The Assessee, The Assessing Officer Proceeded To Make The Following Additions In The Assessment Completed U/S 143 (3) Of The Act :-

For Appellant: Shri Manish Jain, CAFor Respondent: Ms. Sapna Bhatia, CIT DR

Section 143Section 143(2)Section 14ASection 48Section 80G

assessee are as under:- 4 Description Amount Salaries and other benefits 7,56,809 Entertainment 2,18,125.58 Professional charges (including 39,21,998.97 management fees paid to M/s. Kotak Securities of Rs.36,67,416.97) Vehicle running & maintenance 1,82,480.70 Donations 3,00,000 Loss on sale of assets ... question. On appraisal of the above mentioned law it is not in dispute that the Tribunal has taken the two views to dealt the management fees paid for portfolio management scheme. It is also not in dispute that when two views are possible then one view which is favourable

Rapport Outdoor Advertising Private Limited, Mumbai vs. DCIT-3(3)(1), Mumbai

ITA 949/MUM/2024[2014-15]Status: DisposedITAT Mumbai25 Oct 2024AY 2014-15

Bench: Shri Narendra Kumar Billaiyashri Sandeep Singh Karhail

For Appellant: Shri Ajit JainFor Respondent: Smt. Mahita Nair, Sr.DR

Section 115Section 142(1)Section 143(2)Section 143(3)Section 250

IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI BEFORE SHRI NARENDRA KUMAR BILLAIYA, ACCOUNTANT MEMBER SHRI SANDEEP SINGH KARHAIL

The ACIT, Central Circle-3(2), Chennai vs. M/S.Va Tech Wabag Limited, Chennai

In the result, the appeals of the revenue are decided as under:-

ITA 326/CHNY/2021[2016-17]Status: DisposedITAT Chennai16 Oct 2024AY 2016-17

Bench: Shri Aby T Varkey & Shri Amitabh Shuklaआयकर अपील सं./It(Tp) No.7/Chny/2021, Assessment Year-2013-14 आयकर अपील सं./ It(Tp) No.8/Chny/2021, Assessment Year-2014-15 आयकर अपील सं./ It(Tp) No.9/Chny/2021, Assessment Year-2015-16 आयकर अपील सं./ Ita No.326/Chny/2021, Assessment Year-2016-17 The Assistant Commissioner Of Income Tax, M/S. V.A Tech Wabag Limited, Corporate Circle-3(2) No.17, Wabag House, Chennai 200 Feet Radial Road, Sunnambukolathur, Chennai – 600 006. [Pan: Aabcv0225G] (अपीलार्थी/Appellant) (प्रत्यर्थी/Respondent) अपीलार्थी की ओर से/ Appellant By : Shri Ramesh Kutty, Advocate प्रत्यर्थी की ओर से /Respondent By : Ms. C. Vatchala, Cit सुनवाई की तारीख/Date Of Hearing : 27.08.2024 घोषणा की तारीख /Date Of Pronouncement : 16.10.2024 आदेश / O R D E R Amitabh Shukla, A.M : Delay S. Appel- Appeal Nos. Ays Cit(A) Order Details Respondent In Filing No. Lant Appeal A B C D E F G Acit, Din No.Itba / Apl / M / 250 / M/S. V.A Tech It(Tp)-7 / Cc- 2020-21 / 1029389607 (1) Wabag 1 2013-14 4 Days Chny/2021 3(2), Dt.31.12.2020 Limited, Chennai Din No.Itba / Apl / M / 250 / It(Tp)-8 / 2 2014-15 2020-21 / 1029389231 (1) 4 Days Chny/2021 Dt.31.12.2020 Din No.Itba / Apl / M / 250 / It(Tp)-9 / 3 2015-16 2020-21 / 1029389414 (1) 4 Days Chny/2021 Dt.31.12.2020 Din No.Itba / Apl / M / 250 / It(Tp)-326 3 4 2016-17 2020-21 / 1031510911 (1) /Chny/2021 Months Dt.16.03.2021

For Appellant: Shri Ramesh Kutty, AdvocateFor Respondent: Ms. C. Vatchala, CIT

Section 143(3)

decision of Coordinate Bench of this Tribunal Supra, we direct the Ld. AO to re-examine the matter afresh as to whether the management fees is in the nature of fee for technical services or not and to thereafter conclude as per law. To the extent the order of lower

Asst. Commissioner of Income Tax 8(2)(1), Mumbai, Ayakar Bhavan vs. Piramal Glass Private Limited, Mumbai

In the result, the appeal of the Revenue is dismissed

ITA 1232/MUM/2024[2021-22]Status: DisposedITAT Mumbai27 Sept 2024AY 2021-22

Bench: Shri Om Prakash Kant () & Shri Raj Kumar Chauhan () Assessment Year: 2021-22 Asst. Cit-8(2)(1), Piramal Glass Pvt. Ltd., Room No. 481, Aayakar Bhavan, 6Th Floor, Piramal Tower Annexe Maharishi Karve Road, Vs. Ganpatrao Kadam Marg, Lower Mumbai-400020. Parel, Mumbai-400013. Pan No. Aabcg 0093 R Appellant Respondent

For Respondent: Mr. Ronak Doshi &

Section 36(1)(ii)

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “C” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI RAJ

Hazaribagh Ranchi Expressway Ltd, Mumbai vs. ACIT- Cir-14(1)(1), Mumbai

ITA 3788/MUM/2023[2014-15]Status: DisposedITAT Mumbai17 Sept 2024AY 2014-15

Bench: Shri Amarjit Singh & Shri Sandeep Singh Karhail

For Appellant: Shri Bhupal RapelliFor Respondent: Shri Savya Sachi Kumar

Section 12Section 250Section 32Section 32(1)(ii)Section 32(1)(li)

IN THE INCOME TAX APPELLATE TRIBUNAL “E” BENCH, MUMBAI BEFORE SHRI AMARJIT SINGH, ACCOUNTANT MEMBER AND SHRI SANDEEP SINGH KARHAIL

Hazaribagh Ranchi Expressway Ltd., Mumbai vs. ACIT, Cir-14(1)(1), Mumbai

In the result, the appeal by the assessee for the assessment years

ITA 3787/MUM/2023[2013-14]Status: DisposedITAT Mumbai17 Sept 2024AY 2013-14

Bench: Shri Amarjit Singh & Shri Sandeep Singh Karhail

For Appellant: Shri Bhupal RapelliFor Respondent: Shri Savya Sachi Kumar

Section 12Section 250Section 32Section 32(1)(ii)Section 32(1)(li)

been rendered in a different factual matrix as in that case the depreciation was claimed on expenditure incurred towards legal, technical, and management fees for acquiring certain rights from the Ministry of Civil Aviation, Government of India. Therefore, we are of the considered view that the said decision is factually

Lloyd'S Register Asia (India Branch Office), Mumbai vs. DCIT (International Taxation)-3(1)(2), Mumbai

In the result, all these appeals filed by the assessee are allowed for statistical

ITA 878/MUM/2024[2011-12]Status: DisposedITAT Mumbai29 Aug 2024AY 2011-12

Bench: Ms. Kavitha Rajagopal, Jm & Ms. Renu Jauhri, Am

For Appellant: Shri Nitesh JoshiFor Respondent: Shri Anil Sant-Addl.CIT DR

Section 250

Asia – India Branch Office for A.Y. 2010-11 to 2015-16 wherein the issue of disallowance u/s. 40(a)(ia) of the Act on management fees, the Tribunal had held that the management fees are not in the nature of ‘technical service’ as per Article 13(4) of India ... aforesaid facts, the reasons why the provisions of section 40(a)(i) of the Act will not apply to payment by way of management fees made by the assessee to LRS, we will deal with the last argument taken by the assessee that whether payment of management fees cannot

Deputy Commissioner of Income Tax(It)-3(1)(2), Mumbai vs. Lloyds Register of Shipping, Mumbai

In the result, all these appeals filed by the assessee are allowed for statistical

ITA 1777/MUM/2024[2021-22]Status: DisposedITAT Mumbai29 Aug 2024AY 2021-22

Bench: Ms. Kavitha Rajagopal, Jm & Ms. Renu Jauhri, Am

For Appellant: Shri Nitesh JoshiFor Respondent: Shri Anil Sant-Addl.CIT DR

Section 250

Deputy Commissioner of Income Tax(It)-3(1)(2), Mumbai vs. Lloyds Register Asia, Mumbai

In the result, all these appeals filed by the assessee are allowed for statistical

ITA 1776/MUM/2024[2016-17]Status: DisposedITAT Mumbai29 Aug 2024AY 2016-17

Bench: Ms. Kavitha Rajagopal, Jm & Ms. Renu Jauhri, Am

For Appellant: Shri Nitesh JoshiFor Respondent: Shri Anil Sant-Addl.CIT DR

Section 250

Lioyd'S Register Asia (India Branch Office), Mumbai vs. Deputy Commissioner of Income Tax (International Taxation -3(1)(2), Mumbai

In the result, all these appeals filed by the assessee are allowed for statistical

ITA 1455/MUM/2024[2016-17]Status: DisposedITAT Mumbai29 Aug 2024AY 2016-17

Bench: Ms. Kavitha Rajagopal, Jm & Ms. Renu Jauhri, Am

For Appellant: Shri Nitesh JoshiFor Respondent: Shri Anil Sant-Addl.CIT DR

Section 250

Emerging Markets Equity Index Master Fund, Mumbai vs. DCIT (International Taxation)- 2(2)(1), Mumbai

In the result, all these appeals filed by the assessee are allowed for statistical

ITA 4588/MUM/2023[2021-22]Status: DisposedITAT Mumbai29 Aug 2024AY 2021-22

Bench: Ms. Kavitha Rajagopal, Jm & Ms. Renu Jauhri, Am

For Appellant: Shri Nitesh JoshiFor Respondent: Shri Anil Sant-Addl.CIT DR

Section 250

Virbac Animal Health India Private Limited, Mumbai vs. DCIT-3(3)(1), Mumbai

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

ITA 2239/MUM/2024[2020-21]Status: DisposedITAT Mumbai22 Aug 2024AY 2020-21

Bench: Shri Pavan Kumar Gadale, Judicialmember & Smt. Renu Jauhrivirbac Animal Health India Dcit 3(3)(1), Vs. Pvt Ltd., Room.No.1607, 6Th Floor, Western Edge I, 16 Th Floor, Western Express Highway, Air India Building, Borivali ( East) So, Nariman Point, Mumbai -400066 Mumbai-400021. Pan/Gir No. Aaccv2316F (अपीलाथ"/Appellant) (""यथ"/Respondent)

Section 32Section 37

Commissioner of Income-tax (Appeal), NFAC, erred in upholding the action of the Ld. AO, NEAC in disallowing Management Fees of Rs. 7,06,07,925/- paid by the Appellant to Virbac Asia Pacific Company Limited, Thailand under section 37 of the Act. 4. The Ld. Commissioner of Income ... DTAA between India and Thailand. Finally the AO has disallowed(i) depreciation claim to the extent of Rs. 3,41,86,983/- (ii) Management fee payments aggregating to Rs.7,06,07,925/- and (iii) disallowed 25% of Advertising expenses which works out to Rs.4,99,96,750/- and assessed

Gates India Pvt Ltd, Delhi vs. ACIT, Circle-10(1), Delhi

In the result, the appeal of the assessee is allowed

ITA 2379/DEL/2022[2018-19]Status: DisposedITAT Delhi22 Aug 2024AY 2018-19

Bench: Shri Saktijit Dey & Shri Pradip Kumar Kedia

For Appellant: Shri M.P. Rastogi, AdvFor Respondent: Shri Rajesh Kumar, CIT-(DR)

Section 143(3)Section 144CSection 144C(13)Section 144C(5)Section 92CSection 92C(1)

assessee had similarly adopted TNMM method for such intra- group and centralized services including the payment of management fee. The Assessing Officer and TPO accepted the methodology and no TP adjustment were made. All the facts and circumstances and the quality of services remained the same. A reference was made ... uncontrolled transaction which is crucial ingredient for TP adjustment, for comparison and instead in the guise of CUP method, he questioned the necessity of management fee expense and benefit derived therefrom by the assessee. The TPO, instead of benchmarking the international transaction of management fee, disallowed the same