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“related party transaction”

DisallowancesSection 40A(2)(b)Section 40A(2)(b)490 judgments

The decision most relied on for related party transaction is Eastern Investments Ltd. v. CIT (38 ITR 601), cited in 346 judgments on BharatTax.

Leading authorities on related party transaction

Eastern Investments Ltd. v. CIT
38 ITR 601 · 1960 · Supreme Court
346
citing judgments

Expenditure must be commercially expedient for carrying on the business, and it is not for revenue authorities to dictate how an assessee should conduct its business. The court will not question the business expediency of a transaction, even if a third party also benefits.

Sassoon J. David & Co. Pvt. Ltd. v. CIT
118 ITR 261 · 1979 · Supreme Court
323
citing judgments

An expense incurred by an assessee for its own business, such as advertising, marketing, and promotional (AMP) expenses, cannot be disallowed merely because it incidentally or indirectly benefits the assessee's sister concerns or associated enterprises.

Everest Kanto Cylinders Ltd. v. DCIT
34 Taxmann.com 19 · 2013 · ITAT
64
citing judgments

A transfer pricing adjustment for corporate guarantees provided by an Indian entity to its Associated Enterprises (AEs) where no fees are charged can be estimated at approximately 0.20%. The arm's length principle applies to such intra-group corporate guarantee transactions.

Knorr-Bremse India (P) Ltd. v. ACIT
380 ITR 307 · 2016 · High Court
63
citing judgments

When transactions are part of a package deal with a composite price or are interdependent such that an assessee must accept all of them together, they must be aggregated and treated as a single international transaction for transfer pricing purposes.

Kamleshbhai Dharamshibhai Patel v. CIT
31 Taxmann.com 50 · 2013 · High Court
58
citing judgments

Documents found in the possession of a searched person are presumed to belong to that person under Section 132(4A) and do not automatically belong to a third party merely because the transactions recorded therein pertain to or relate to such third party.

Genesis Integrating Systems India Pvt Ltd. v. DCIT
53 SOT 159 · 2012 · ITAT
57
citing judgments

Companies with significantly different turnovers (e.g., one above Rs. 200 crores and another below) cannot be considered comparable in transfer pricing analysis. Turnover is a relevant factor in assessing comparability.

CIT v. Shatrunjay Diamonds
261 ITR 258 · 2003 · High Court
50
citing judgments

The assessee bears the initial burden to maintain and produce authentic documentation under Section 92D and Rule 10D to justify transactions with related parties, especially concerning the arm's length price for such transactions under Section 40A(2)(b). The discharge of this statutory obligation to maintain accurate data is a mandatory requirement of law.

CIT v. Bhooratnam & Co.
357 ITR 396 · 2013 · High Court
48
citing judgments

An assessee is entitled to credit for TDS even if the certificate is issued in the name of a joint venture or related party, provided the income to which the TDS relates is offered by the assessee. This principle emphasizes looking at the substance of the transaction over strict adherence to the name on the TDS certificate.

Judgments citing related party transaction

DCIT 2(3), Mumbai vs. Zensar Technologies Ltd, Mumbai

In the result, appeal of the Revenue is dismissed

ITA 8389/MUM/2010[2005-06]Status: DisposedITAT Mumbai13 Nov 2023AY 2005-06

Bench: Shri Vikas Awasthy& Shri S. Rifaur Rahmanआअसं.8389/मुं/2010 (िन.व. 2005-06) Dcit-2(3), Room No.555, 5Th Floor, Aaykar Bhavan, M.K.Road, Mumbai – 400 020 ...... अपीलाथ"/Appellant बनाम Vs. M/S. Zensar Technologies Ltd., Magnet House, 2Nd Floor, N.M.Marg, Ballard Estate, Mumbai – 400 001 Pan: Aaacz 0742 K ....."ितवादी/Respondent अपीलाथ" "ारा/ Appellant By : Shri Manoj Kumar, Cit - Dr "ितवादी"ारा/Respondent By : Shri Nitesh Joshi, Advocate सुनवाई की ितिथ/ Date Of Hearing : 22/08/2023 घोषणा की ितिथ/ Date Of Pronouncement : 13/11/2023 आदेश/Order Per Vikas Awasthy, Jm:

For Appellant: Shri Manoj Kumar, CIT - DRFor Respondent: Shri Nitesh Joshi, Advocate
Section 10ASection 244ASection 92C

have been excluded by the TPO as they fail to qualify the criteria selected by the TPO for selection of comparable viz: (a) Related party transactions of 4%. (b) Export turnover less than 25%. (c) Lack of segmental data (d) Consistent loss making companies (e) Exceptional/extra ordinary event. He submitted ... findings of CIT(A) submitted that the TPO was inconsistent in applying the filters. One of the filters applied by the TPO was Related Party Transactions (RPT)>4%. The CIT(A) rejected following companies applying above filter: (i) Sasken Network Systems Ltd. (ii) Foursoft Ltd. (iii) Tata Elxi

Citigroup Global Markets (India) Private Limited, Mumbai vs. DCIT, Circle-4(1), Mumbai

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

ITA 72/MUM/2018[2010-11]Status: DisposedITAT Mumbai25 Oct 2023AY 2010-11

Bench: Shri Prashant Maharishi, Am & Ms. Kavitha Rajagopal, Jm Citigroup Global Markets (India) Private Limited The Dcit 1402, 14Th Floor, Circle -4(1), First International Financial Aaykar Bhavan Centre, Vs. M.K. Road, Bandra Kurla Complex, Mumbai-400 020 G Block, Bandra (East), Mumbai-400 051 (Appellant) (Respondent) Pan No.Aaecs7234F Citigroup Global Markets (India) The Jcit (Osd) Private Limited 4(1)(1) 1402, 14Th Floor, Room No. 640, 6 Th Floor, First International Financial Aaykar Bhavan, Centre, Vs. M.K. Road, Bandra Kurla Complex, G Block, Bandra (East), Mumbai-400 020 Mumbai-400 051 (Appellant) (Respondent) Assessee By : Shri Nishant Thakkar & Mr. Jasmin Amalsadwala, Ars Revenue By : Ms. Vranda U. Matkari, Dr Date Of Hearing: 04/08/2023 Date Of Pronouncement : 25/10/2023

For Appellant: Shri Nishant Thakkar &For Respondent: Ms. Vranda U. Matkari, DR
Section 143(3)Section 144CSection 73

company and has taken the weighted average in the accept/ reject matrix. Assessee originally selected 6 companies but rejected two companies having significant related party transactions and one company on functional dissimilarity, thereafter, assessee based on the transfer pricing study report of subsequent year selected one more comparable ... adopted by the assessee and the learned Transfer Pricing Officer rejected it merely because of RPT filter. According to the assessee, it has related party transaction more ITA Nos. 72 & 45/Mum/2018 Citigroup Global Market (India) Private Limited; A.Y. 10-11 than 25%. In the whole submission of the assessee, there

Joint Commissioner of Income Tax (OSD)-4(1)(1), Mumbai vs. Citigroup Global Markets (India) Private Limited, Mumbai

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

ITA 45/MUM/2018[2010-11]Status: DisposedITAT Mumbai25 Oct 2023AY 2010-11

Bench: Shri Prashant Maharishi, Am & Ms. Kavitha Rajagopal, Jm Citigroup Global Markets (India) Private Limited The Dcit 1402, 14Th Floor, Circle -4(1), First International Financial Aaykar Bhavan Centre, Vs. M.K. Road, Bandra Kurla Complex, Mumbai-400 020 G Block, Bandra (East), Mumbai-400 051 (Appellant) (Respondent) Pan No.Aaecs7234F Citigroup Global Markets (India) The Jcit (Osd) Private Limited 4(1)(1) 1402, 14Th Floor, Room No. 640, 6 Th Floor, First International Financial Aaykar Bhavan, Centre, Vs. M.K. Road, Bandra Kurla Complex, G Block, Bandra (East), Mumbai-400 020 Mumbai-400 051 (Appellant) (Respondent) Assessee By : Shri Nishant Thakkar & Mr. Jasmin Amalsadwala, Ars Revenue By : Ms. Vranda U. Matkari, Dr Date Of Hearing: 04/08/2023 Date Of Pronouncement : 25/10/2023

For Appellant: Shri Nishant Thakkar &For Respondent: Ms. Vranda U. Matkari, DR
Section 143(3)Section 144CSection 73

company and has taken the weighted average in the accept/ reject matrix. Assessee originally selected 6 companies but rejected two companies having significant related party transactions and one company on functional dissimilarity, thereafter, assessee based on the transfer pricing study report of subsequent year selected one more comparable ... adopted by the assessee and the learned Transfer Pricing Officer rejected it merely because of RPT filter. According to the assessee, it has related party transaction more ITA Nos. 72 & 45/Mum/2018 Citigroup Global Market (India) Private Limited; A.Y. 10-11 than 25%. In the whole submission of the assessee, there