“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

Tech Data (Singapore) Pte Limited, Mumbai vs. DCIT, International Taxation Circle-4(1)(2), Mumbai

In the result, ground No.3 of appeal is allowed

ITA 4540/MUM/2023[2021-22]Status: DisposedITAT Mumbai29 Jul 2024AY 2021-22

Bench: Shri Narendra Kumar Billaiya, Hon’Ble & Shri Rahul Chaudhary, Hon’Ble

For Appellant: Shri Nitesh Joshi, A/RFor Respondent: Shri Anil Sant, Addl. CIT D/R

Section 143(3)Section 144C(13)Section 234ASection 234BSection 253(1)(d)Section 270ASection 274

following ground, which are independent of and without prejudice to each other: I.T.A. No. 4540/Mum/2023 2 1. Ground 1: Holding Management fees to the tune of INR 38,56,25,301 as taxable income in the hands of Assessee The learned AO has erred in law and facts in treating ... DTAA. The assessee has drawn our attention to the Service Agreement at pages 23 to 29 of the paper book. The assessee has received management fee under the said Service Agreement. The nature of services rendered by the assessee are specified in Schedule-A to the aforesaid agreement. The gist

M/S. Steer America Inc., United States vs. The Deputy Commissioner of Income Tax, International Taxation Circle -1(2), Bengaluru

In the result, both the appeals of the assessee are partly allowed

ITA 833/BANG/2024[2014-15]Status: DisposedITAT Bangalore10 Jul 2024AY 2014-15

Bench: Shri Chandra Poojari & Shri Prakash Chand Yadav

For Appellant: Sri Vasanth Kumar, A.RFor Respondent: Ms. Anjala Sahu, D.R

Section 144CSection 147Section 148

management consultancy and other related services to hotels. It had entered into three separate agreements with third party Indian hotels and earned revenue towards management fee and license fee. During assessment proceedings, Assessing Officer noticed that assessee also had receipts from Indian hotels on account of marketing and reservation receipts ... under article 5 of DTAA. Assessing Officer held that assessee rendered expertise and technical knowledge to WNS India and taxed entire marketing and management fees received from WNS India as FTS under article 12 of DTAA. In assessee's own case for assessment year 2006-07, Tribunal held that since

M/S. Steer America Inc., United States vs. The Deputy Commissioner of Income Tax, International Taxation Circle -1(2), Bengaluru

In the result, both the appeals of the assessee are partly allowed

ITA 832/BANG/2024[2013-14]Status: DisposedITAT Bangalore10 Jul 2024AY 2013-14

Bench: Shri Chandra Poojari & Shri Prakash Chand Yadav

For Appellant: Sri Vasanth Kumar, A.RFor Respondent: Ms. Anjala Sahu, D.R

Section 144CSection 147Section 148

Pune Mathadi Hamal and Other Manual Workers Board, Pune vs. Income Tax Officer, Ward-5(1), Pune

In the result, appeal of the assessee is partly allowed

ITA 1012/PUN/2023[2018-19]Status: DisposedITAT Pune27 Jun 2024AY 2018-19

Bench: Shri S.S.Godara & Dr. Dipak P. Ripoteआयकर अपील सं. / Ita No.1012/Pun/2023 िनधा"रण वष" / Assessment Year : 2018-19 Pune Mathadihamal & Other The Income Tax Manual Workers Board, V Officer, Shramashakti Bhavan, S Ward-5(1), Pune. Coomercial Plot No.1, Market Yard, Pune – 411037. Pan: Aaalp0097L Appellant/ Assessee Respondent /Revenue Assessee By Shri Vipul Joshi – Ar Revenue By Shri Ajay Kumar Keshari & Shri Rajesh Gawali– Dr’S Date Of Hearing 17/04/2024 Date Of Pronouncement 27/06/2024 आदेश/ Order Per Dr. Dipak P. Ripote, Am: This Appeal Filed By The Assessee Is Against The Orders Of Ld.Commissionerof Income Tax(Appeals)[Nfac], Under Section 250 Of The Act Dated 14.07.2023 :

For Appellant: 2. The ld.AR submitted written submissions, relevant part of the same is reprodu

Section 11Section 12ASection 143(3)Section 250

holding that the Transfer Pricing Officer for the Assessment year 2008-2009, 2009-2010 & 2011-2012 has accepted the transcation of payment of management fees paid to NLC by NLT and therefore the same having been made entirely for business consideration incurred wholly and exclusively for the purposes of business

Bundy India Ltd., Baroda vs. The DCIT, Circle-1(1), Baroda

In the result, the appeal preferred by the assessee is allowed in part

ITA 1764/AHD/2013[2007-08]Status: DisposedITAT Ahmedabad10 Jun 2024AY 2007-08

Bench: Shri T.R. Senthil Kumar & Shri Narendra Prasad Sinha

For Appellant: Shri Parin Shah, A.RFor Respondent: Date of Hearing

Section 143(3)Section 92CSection 92C(3)

erred in law and on facts, in holding that the international transaction of payment of management fees by the appellant to its ITA No.1764/Ahd/2013 (Bundy India Limited vs. DCIT) A.Y.– 2007-08- 5 – associated enterprises is not at arm's length and considering arm's length price of management charges ... AO/CIT(A) erred in law and on facts in contending and ld. CIT(A) in upholding that the management fees have not been benchmarked and rejecting transfer pricing study in not submitted by the appellant. 6.3 The AO/CIT(A) erred in law and on facts, in disregarding aggregation of management

M/S Kantar Gdc India Pvt. Ltd. (Formerly Tns India Pvt Ltd), Hyderabad vs. Dy. Commissioner of Income Tax, Circle-2(2), Hyderabad

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

ITA 2261/HYD/2017[2013-14]Status: HeardITAT Hyderabad03 Jun 2024AY 2013-14

Bench: Shri Mahavir Singh & Shri Manjunatha, G.आ.अपी.सं /Ita No.2261/Hyd/2017 (िनधा"रण वष"/Assessment Year: 2013-14) M/S. Kantar Gdc India (P) Vs. Dy. C. I. T. Ltd (Formerly Tns India (P) Circle 2(2) Ltd, Hyderabad Hyderabad Pan:Aabcn2278F (Appellant) (Respondent) िनधा""रती "ारा/Assessee By: Advocate Harpreet Singh Ajmani राज" व "ारा/Revenue By:: Shri Shiva Sewak, Cit(Dr) सुनवाई की तारीख/Date Of Hearing: 15/05/2024 घोषणा की तारीख/Pronouncement: 03/06/2024 आदेश/Order

For Appellant: Advocate Harpreet Singh AjmaniFor Respondent: : Shri Shiva Sewak, CIT(DR)

Section 143(3)Section 144C(5)Section 271(1)(c)

learned Assessing Officer ("AO")/ Learned Transfer Pricing Officer (TPO") and the Hon'ble Dispute Resolution Panel ('DRP') erred in: TRANSFER PRICING MATTERS: ALP for management fees 1. Determining the arm's length price in respect of payment towards management services paid to AE as 'Nil': 2. Determining ... without appreciating that the cost towards management fees is already considered as part of the operating cost in respect of the services transactions, which have been determined to be at arm's length. Interest on Receivables 3. Making TP adjustment by imputing interest on outstanding receivables relating to provision

The Dy. CIT., Circle-4, Ahmedabad vs. M/S. Invida India Pvt.Ltd. ( Now Known As Menarini India Pvt. Ltd.), Ahmedabad

Appeal of the Revenue is dismissed

ITA 1316/AHD/2015[2010-11]Status: DisposedITAT Ahmedabad30 May 2024AY 2010-11

Bench: Ms. Suchitra Kamble & Shri Waseem Ahmedassessment Year: 2010-11

For Appellant: Shri Ankit Jain, Sr. DRFor Respondent: Shri Tushar Hemani, Sr. Advocate &

Section 142(1)Section 143(1)Section 143(2)

erred in law and on facts in deleting the addition of Rs.2,41,23,181/- made on account of payment of royalty, management fees and IT allocation cost account treating it as not at arm’s length price against the assesses treatment as arm’s length price ... Name of Associated Enterprise Description Amount 1. Invida Holdings Private Royalty Payment Rs. 67,14,490/- Limited 2. Invida (Singapore) Pvt. Ltd. Management Fees Rs. 1,38,65,200/- 3. Invida (Singapore) Pvt. Ltd. IT Service, Technical Rs. 21,48,067/- A.Y. 2010-11 Page 3 of 13 Support

Asst. Commissioner of Income Tax, Mumbai vs. Nanubhai N Desai, Mumbai

In the result, both the appeals of the Revenue are allowed for In the result, both the appeals of the Revenue are allowed for In the result, both the appeals of the Revenue are allowed for statisti...

ITA 836/MUM/2024[2016-17]Status: DisposedITAT Mumbai30 May 2024AY 2016-17

Bench: Shri Om Prakash Kant () & Shri Raj Kumar Chauhan ()

For Respondent: Dr. Tusharkumar Desai

Section 68

account of disallowance of interest expenses claimed in the P & L account and the same been set off against management fees even though account and the same been set off against management fees even though account and the same been set off against management fees even though there there there ... exist exist exist no no no nexus nexus nexus between between between interest interest interest expenses expenses expenses claimed claimed claimed and and and management fee management fees earned." 4. The appellant craves leave to amend or alter or add a new ground 4. The appellant craves leave to amend

Asst.CIT-32(1), Mumbai vs. Nanubhai N Desai, Mumbai

ITA 809/MUM/2024[2016-17]Status: DisposedITAT Mumbai30 May 2024AY 2016-17

Bench: Shri Om Prakash Kant () & Shri Raj Kumar Chauhan ()

For Respondent: Dr. Tusharkumar Desai

Section 68

Conferencecall Services India Private Ltd, Bangalore vs. DCIT, Corporate Circle -1(2), Chennai

In the result, appeal filed by the assessee is allowed

ITA 319/CHNY/2018[2013-14]Status: DisposedITAT Chennai10 May 2024AY 2013-14

Bench: Shri Aby T. Varkey & Shri Jagadishआयकर अपील सं./Ita No.319/Chny/2018 िनधा"रणवष"/Assessment Year: 2013-14 V. M/S.Conferencecall – The Dy. Commissioner- Services India Pvt. Ltd., Of Income Tax, Rmz Titanium, No.135, 1St Floor, Corporate Circle-1(2), Old Airport Road, Chennai. Bangalore-560 017. [Pan: Aaccc 6574 A] (अपीलाथ"/Appellant) (""यथ"/Respondent)

For Appellant: Shri Soumen Adhak (Virtual)For Respondent: Shri A. Sasikumar, CIT

Section 143(3)Section 144C(13)

erred in disallowing an amount of Rs.38,221,482 under the impression that this represents royalty component included as part of management fees, without appreciating that a major part of this component has already been disallowed under section 40a(i) by Assessee itself and further that the amount that

Jcdecaux S.A., New Delhi vs. ACIT, Circle-2(1)(2), International Taxation, New Delhi

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

ITA 2473/DEL/2022[2018-19]Status: DisposedITAT Delhi03 May 2024AY 2018-19

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

For Appellant: Sh. K. M. Gupta, Adv. &For Respondent: Sh. Om Parkash, Sr. DR

Section 143(3)Section 234BSection 270ASection 9(1)(vii)

circumstances of the case and in law, the Ld. AO and Ld. Dispute Resolution Panel (DRP'), have grossly erred in holding that the Management Fee' amounting to Rs. 2,39,09,103 is taxable as 'Fees for Technical Services' (FTS) as per the Double Taxation Avoidance Agreement ('DTAA') between India ... Royalty receivable from JCD 2,25,49,536 Offered to tax India, for the use of as Royalty' trademarks and know-how 2. Management fee receivable 2,39,09,103 Not taxable from JCD India 3. Corporate Guarantee Fee 54,14,600 Not taxable 4 JCDECAUX S.A. receivable from

Tech Data (Singapore) Pte Limited (Formerly Known As "Technology Solutions (Singapore) Pte Limited), Mumbai vs. The Deputy Commissioner of Income Tax, International Tax Circle-4(1)(2), Mumbai

In the result, ground No.3 of appeal is allowed

ITA 3280/MUM/2023[2020-21]Status: DisposedITAT Mumbai23 Apr 2024AY 2020-21

Bench: SHRI AMARJIT SINGH (Accountant Member), MS. KAVITHA RAJAGOPAL (Judicial Member)

For Appellant: Nitesh JoshiFor Respondent: Anil Sant

Section 143(2)Section 143(3)Section 144CSection 234ASection 234BSection 270ASection 274

claim of treating receipt from sale/ distribution of off- the- shelf software as non-taxable receipt under the Act. 3. Ground 3: Holding Management fees to the tune of INR 34,11,68,364 as taxable income in the hands of Assessee. Without prejudice to Ground of Objection ... above we find merit in the submission of the assessee, accordingly this ground of appeal of the assessee is allowed. Ground No. 3: Holding Management fees to the tune of INR 34,11,68,364 as taxable income in the hands of assessee: 8. During the year under consideration

Damani Shipping Pvt Ltd., Mumbai vs. ACIT Cir-2(1)(1), Mumbai

In the result, appeal by the assessee is dismissed

ITA 3634/MUM/2023[2013-14]Status: DisposedITAT Mumbai22 Mar 2024AY 2013-14

Bench: Shri Om Prakash Kant & Shri Sandeep Singh Karhail

For Appellant: Shri Pankaj TopraniFor Respondent: Smt. Mahita Nair

Section 14Section 142(1)Section 143(2)Section 143(3)Section 14ASection 234BSection 250

they have taken full responsibility for opening the account and filling the forms, for which the assessee has paid Rs. 2,03,999 as management fees which have been suo moto disallowed under section 14A of the Act. The assessee further submitted that it has not incurred any direct expenses ... section 142(1) of the Act. In response thereto, the assessee submitted that the only expense incurred to earn tax-free income is the management fees paid of Rs.2,03,999, which has been disallowed in the computation of income. The AO vide order dated 17/12/2019 passed under section

Intertek India Private Limited, New Delhi vs. DCIT, Circle-10(1), Delhi

In the result, appeal is partly allowed

ITA 2014/DEL/2022[2018-19]Status: DisposedITAT Delhi20 Mar 2024AY 2018-19

Bench: Shri Saktijit Dey, Vice- & Shri Pradip Kumar Kediaassessment Year: 2018-19

Section 143(3)Section 144BSection 144C(3)

should not have been clubbed with other transactions. Accordingly, he issued a show-cause notice to the assessee to explain why the payment of management fees to 3 | P a g e AY: 2018-19 the AE should not be benchmarked independently. In the said show-cause notice ... profitability. Thus, he called upon the assessee to explain, as to why the payment of Rs.5,39,08,831/- to the AE towards management fee should not be disallowed, by determining the Arm’s Length Price (ALP) of such transaction as nil. 5. In response to the show-cause notice

Paramount Products Private Limited, Delhi vs. DCIT Circle 19(1), New Delhi

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

ITA 2369/DEL/2022[2018-19]Status: DisposedITAT Delhi28 Feb 2024AY 2018-19

Bench: Shri N.K. Billaiya & Ms Astha Chandra

For Appellant: Shri Anil Bhalla, CAFor Respondent: Shri Vivek Vardhan, Sr. DR

Section 10(34)Section 14A

disallowance of expenses related to exempt income as under; Sr. Particulars Amount No. 1. Salaries paid to staff 7,86,000 2. Portfolio Management Fee 3,94,000 3. Conveyance expenses 50,000 4. Telephone expenses 20,000 5. Securities Transaction Tax 8,032 Total 12,58,032 10. However ... assessee, one of the Directors engaged for coordinating with the portfolio management company & maintaining all the records and related work hence salary paid, portfolio management fee, etc. were used towards manage these investments. It is a settled position of law that not only direct expenses but also indirect and proximate

At Kearney Ltd.- India Branch Office, Gurgaon vs. DCIT, Circle- 1(1)(1), International Taxation, New Delhi

In the result, appeals of the Assessee’s in ITA Nos

ITA 960/DEL/2018[2013-14]Status: DisposedITAT Delhi28 Feb 2024AY 2013-14

Bench: SHRI SHAMIM YAHYA (Accountant Member), SHRI YOGESH KUMAR U.S. (Judicial Member)

Section 234ASection 271(1)(c)Section 27l

taxable income of the Appellant on account of arm's length price of the transaction related to payment of Management fees. On the facts and in law, the Hon'ble CIT (A), erred in 2. upholding part of the adjustment relating to payment of management fee and while doing ... nature of stewardship services, thereby ignoring the detailed methodology submitted by the Appellant wherein shareholder services were already excluded. Disallowing the expense of management fee purely 2.4. based on surmises and conjectures, thereby questioning the commercial expediency of the Appellant. That the learned AO has erred

At Kearney Ltd.- India Branch Office, Gurgaon vs. DCIT, Circle- 1(1)(1), International Taxation, New Delhi

In the result, appeals of the Assessee’s in ITA Nos

ITA 959/DEL/2018[2012-13]Status: DisposedITAT Delhi28 Feb 2024AY 2012-13

Bench: SHRI SHAMIM YAHYA (Accountant Member), SHRI YOGESH KUMAR U.S. (Judicial Member)

Section 234ASection 271(1)(c)Section 27l

DCIT, Circle- 1(1)(1), International Taxation, New Delhi vs. A.T. Kearney Ltd., Gurgaon

In the result, appeals of the Assessee’s in ITA Nos

ITA 1306/DEL/2018[2013-14]Status: DisposedITAT Delhi28 Feb 2024AY 2013-14

Bench: SHRI SHAMIM YAHYA (Accountant Member), SHRI YOGESH KUMAR U.S. (Judicial Member)

Section 234ASection 271(1)(c)Section 27l

DCIT, Circle- 1(1)(1), International Taxation, New Delhi vs. A.T. Kearney Ltd., Gurgaon

In the result, appeals of the Assessee’s in ITA Nos

ITA 1305/DEL/2018[2012-13]Status: DisposedITAT Delhi28 Feb 2024AY 2012-13

Bench: SHRI SHAMIM YAHYA (Accountant Member), SHRI YOGESH KUMAR U.S. (Judicial Member)

Section 234ASection 271(1)(c)Section 27l

Krishnamurthy Thagarajan, Bangalore vs. ACIT RG 6(3), Mumbai

In the result, appeal of the assessee is allowed

ITA 1651/MUM/2013[2008-09]Status: DisposedITAT Mumbai20 Feb 2024AY 2008-09

Bench: Shri Vikas Awasthy& Shri Amarjit Singhआअसं.1651/मुं/2013 (िन.व. 2008-09) Krishnamurthy Thiagarajan, No.41, 36Th Main Dollar Scheme, Btm Layout, 1St Stage, Bangalore – 560 068. Pan: Aadpk-5126-C ...... अपीलाथ"/Appellant बनाम Vs. The Acit, Circle 6(3),Mumbai, Room No.522 (5Th Floor), Aaykar Bhavan, M.K.Road, Mumbai – 400 020. ..... "ितवादी/Respondent Assessee By : Shri Miteshkumar Gupta, Ca With Shri V.Shivkumar, Ca Revenue By : Shri P.D.Chougule, Sr.Dr सुनवाई क" ितिथ/ Date Of Hearing : 20/02/2024 घोषणा क" ितिथ/ Date Of Pronouncement : 20/02/2024 आदेश/Order Per Vikas Awasthy, Jm: This Appeal By The Assessee Is Directed Against The Order Of Commissioner Of Income Tax(Appeals)-12, Mumbai [In Short ‘The Cit(A)’] Dated 08/11/2012, For The Assessment Year 2008-09. 2. In Appeal Assessee Has Assailed Additions/Disallowances On Account Of: (I) Management Fee Paid To M/S. Bnp Paribas Investment Services India Pvt. Ltd. – Rs.1,71,028/-

For Appellant: Shri Miteshkumar Gupta, CA with Shri V.Shivkumar, CAFor Respondent: Shri P.D.Chougule, SR.DR

Section 14ASection 48

short ‘the CIT(A)’] dated 08/11/2012, for the Assessment Year 2008-09. 2. In appeal assessee has assailed additions/disallowances on account of: (i) Management Fee paid to M/s. BNP Paribas Investment Services India Pvt. Ltd. – Rs.1,71,028/- 2 (ii) Disallowance of Rs.5,32,123/- u/s. 14A of the Income ... sale of Securities. The assessee paid Rs.1,71,028/- to M/s. BNP Paribas Investment Services India Pvt. Ltd. ( in short ‘BNP Paribas’) as management fees for sale of securities. The management fee paid to BNP Paribas is inextricably linked to earning of short term capital gain. The payment of management