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“arm's length price”

Transfer PricingSection 92Section 921,810 judgments

The decision most relied on for arm's length price is CIT v. EKL Appliances Ltd. (345 ITR 241), cited in 422 judgments on BharatTax.

Leading authorities on arm's length price

CIT v. EKL Appliances Ltd.
345 ITR 241 · 2012 · High Court
422
citing judgments

Transfer pricing adjustments for outstanding receivables are permissible only if the Tax Officer establishes, through analysis over a period, a pattern indicating an international transaction intended to benefit an associated enterprise. The Tax Officer cannot question purely business decisions like royalty payments or exceed jurisdiction by applying cost-benefit analysis to determine the arm's length price of services.

CIT v. Everest Kento Cylinders Ltd.
378 ITR 57 · 2015 · High Court
304
citing judgments

Corporate guarantee fees are subject to transfer pricing rules, and adjustments may be needed to account for differences between corporate guarantees and more liquid bank guarantees when determining arm's length price.

Maruti Suzuki India Ltd. v. CIT
381 ITR 117 · 2016 · High Court
220
citing judgments

The Bright Line Test (BLT) is not a recognized method under the Income-tax Act and Rules for benchmarking advertising, marketing, and promotion (AMP) expenses or for determining the existence of an international transaction or its Arm's Length Price. The Revenue must first establish the existence and price of an international transaction before seeking an ALP adjustment.

Chryscapital Investment Advisors (India) Pvt. Ltd. v. DCIT
376 ITR 183 · 2015 · High Court
170
citing judgments

For transfer pricing comparability analysis, companies should not be excluded solely based on higher turnover if they are otherwise functionally comparable, unless the turnover difference reflects fundamental functional dissimilarities, brand value, or risk profiles that materially impact profitability.

PCIT v. Redington (India) Ltd.
430 ITR 298 · 2021 · High Court
132
citing judgments

A corporate guarantee issued to Associated Enterprises (AEs) is an international transaction under Section 92B, requiring adjustments for guarantee commission due to inherent risk. The reasonable arm's length rate for benchmarking such corporate guarantees can be determined using internal or external comparable uncontrolled prices.

Bausch & Lomb Eye Care (India) Pvt. Ltd. v. Additional CIT
381 ITR 227 · 2016 · High Court
127
citing judgments

The existence of an international transaction must be established before its arm's length price can be determined. An alleged 'excessive' AMP expenditure cannot unilaterally expand the scope of an international transaction if its existence is contested.

CIT v. Cushman & Wakefield (India) (P.) Ltd.
367 ITR 730 · 2014 · High Court
120
citing judgments

This case determines the Arm's Length Price (ALP) for intra-group services and reimbursements, clarifying when charges constitute services warranting a mark-up versus mere pass-through costs. It provides guidance on the circumstances under which an ALP adjustment, including an ALP of 'nil', is appropriate for such transactions.

CIT v. Tata Autocomp Systems Ltd.
56 Taxmann.com 206 · 2015 · High Court
119
citing judgments

When determining the arm's length price for interest on a foreign currency loan advanced to an Associated Enterprise, the Indian Prime Lending Rate is not applicable. Instead, the interest rate should be benchmarked based on the prevailing foreign currency rate, such as EURIBOR, or the rate in the country where the loan is received/consumed.

Judgments citing arm's length price

Friday Storytellers LLP, Mumbai vs. ITO, Ward, 4(2)(1), Mumbai

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

ITA 5546/MUM/2024[2021-22]Status: DisposedITAT Mumbai30 May 2025AY 2021-22

Bench: Shri Om Prakash Kant () & Shri Rahul Chaudhary ()

For Respondent: Mr. Karan Thaker a/w

Assessing Officer made a reference under section 92CA(1) of the Act to the learned Transfer Pricing Officer (TPO) for determination of the arm's length price of the said transaction. The learned TPO, after examining the transfer pricing documentation furnished by the assessee and considering the submissions made during ... transactions. As per Section 92 of the Income Tax Act Any income arising from international transaction shall be computed having regard to the arm's length price " 8.3.3 For determination of the arm's length price, various methods have been prescribed as per section 92C of the Act. Also various

Ucweb Mobile Private Limited, Gurgaon vs. Assessment Unit, Inocome Tax Department, Gurgaon

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

ITA 3945/DEL/2024[2020-21]Status: DisposedITAT Delhi30 May 2025AY 2020-21

Bench: SHRI MAHAVIR SINGH (Vice President), SHRI MANISH AGARWAL (Accountant Member)

Section 143(2)Section 143(3)Section 144CSection 144C(1)Section 144C(13)Section 144C(5)Section 253(1)(d)Section 43(3)

appellant also provides customer support services to clients in India which includes and other after sales support. On receiving the reference for determining Arm’s Length Price (“ALP”) of international transactions entered by the appellant with its Associated Enterprises (AE), the TPO has passed the order on 28.07.2023, making adjustments ... TPO/AO have erred in law and facts, by not accepting the economic analysis undertaken by the Appellant for the determination of arm's length price ("ALP") in connection with reselling segment and proposing an upward adjustment of INR 23,03,82,629/-. 6.3. Ld. DRP/TPO/AO have incorrectly accepted - Ten Times

DCIT Circle 5(1)(1), Mumbai vs. Arjav Diamonds (India) Pvt. Ltd, Mumbai

In the result, the appeal filed by the revenue is hereby dismissed

ITA 5610/MUM/2024[2013-14]Status: DisposedITAT Mumbai29 May 2025AY 2013-14

Bench: Shri Om Prakash Kant, Am & Ms. Kavitha Rajagopal, Jm Deputy Commissioner Of Income Tax Arjav Diamonds (India) Pvt. Ltd. - 5(1)(1) Cc, 9010A Bharat Diamond Bourse, Deputy Commissioner Of Income-Tax, Bandra Kurla Complex, Bandra East, Vs. Circle 5(1)(1), R.No.568, Aaykar Mumbai-400051. Bhavan, M.K. Road, Mumbai - 400020. Pan/Gir No. Aagca2472D (Appellant) : (Respondent) Assessee By : Shri. Fenil Bhat Respondent By : Dr. K. R. Subhash, (Cit-Dr) Date Of Hearing : 10.03.2025 Date Of Pronouncement : 29.05.2025 O R D E R Per Kavitha Rajagopal, J M: This Appeal Has Been Filed By The Revenue, Challenging The Order Of The Learned Commissioner Of Income Tax (Appeals), Mumbai (‘Ld.Cit(A)’ For Short), Passed U/S.250 Of The Income Tax Act, 1961 (‘The Act'), Pertaining To The Assessment Year (‘A.Y.’ For Short) 2013-14. 2. The Assessee Has Raised The Following Grounds Of Appeal: “(I) "Whether, On The Facts & Circumstances Of The Case & As Per Law, The Ld. Cit (A) Is Justified In Deleting The Penalty Of Rs. 16,13,66,235/-Levied U/S 271G Of The It Act, 1961 When The Statutory Requirement Of Rule 10B(1)(E), Stating The Methodology For Benchmarking Transactions Using Tnmm, States That The Net Profit Margin From The Controlled International Transaction & The Uncontrolled International Transactions Should Be Separately Provided By The Assessee & Their Statutory Requirement Has Not Been Fulfilled By The Assessee?" Arjav Diamonds (India) Pvt. Ltd.

For Appellant: Shri. Fenil BhatFor Respondent: DR. K. R. Subhash, (CIT-DR)
Section 250Section 271GSection 92C

form 10CEB and the Ld. AO made a reference to the Ld. TPO u/s. 92CA(1) of the Act for determination of Arm’s Length Price (ALP) with reference to the international transactions entered into by the assessee with its AE’s during the year under consideration. Notice u/s. 92CA ... 92CA(2) r.w.s 92D(3) of the Act dated 25.07.2016 and 02.08.2016 requiring the assessee to furnish detail/documents pertaining to the Arm’s Length Price of the international transactions. The Ld. TPO/AO made no adjustment in the assessment proceedings due to lack of material available on record for which determination

Beauty Etoile Private Limited, Mumbai vs. Assessment Unit, Income Tax Department, Delhi

In the result, appeal of the assessee is allowed

ITA 4073/MUM/2024[2020-21]Status: DisposedITAT Mumbai29 May 2025AY 2020-21

Bench: Shri Pawan Singh & Shri Girish Agrawalassessment Year: 2020-21

For Appellant: Shri. Dharan Gandhi, AdvocateFor Respondent: Shri. Kiran Unavekar, Sr. DR
Section 143(3)Section 144Section 144CSection 144C(15)(b)Section 144C(5)Section 234Section 234ASection 270ASection 948

erred in proposing upward adjustment on account of interest on Non-Convertible Debentures ('NCDs') amounting to Rs. 31,40,82,376 as Arm's length Price ('ALP") merely placing reliance on provisions of section 948 of the Act, thereby acting without jurisdiction, order ought to be quashed being

Wrigley India Private Limited, Delhi vs. ACIT, Circle-27(2), Delhi

ITA 953/DEL/2022[2016-17]Status: DisposedITAT Delhi29 May 2025AY 2016-17

Bench: Shri Vikas Awasthy & Shri Manish Agarwal

Section 250(6)Section 92CSection 92C(3)Section 92D

none of the conditions set out in section 92C(3) of the Act are satisfied in the instant case; 3. 2. disregarding the Arm's Length Price ('ALP') as determined by the Appellant in the Transfer Pricing ("TP') documentation maintained by it in terms of section ... assessee has International Transaction during the year, therefore, a reference u/s 92CA was made of the Transfer Pricing Officer (TPO) for determination of Arm's Length Price for the international transactions entered by the assessee. The assessee has reported following international transactions as per audit report in Form 3CEB

Wrigley India Private Limited, Delhi vs. ACIT, Circle-27(2), Delhi

ITA 952/DEL/2022[2015-16]Status: DisposedITAT Delhi29 May 2025AY 2015-16

Bench: Shri Vikas Awasthy & Shri Manish Agarwal

Section 250(6)Section 92CSection 92C(3)Section 92D

none of the conditions set out in section 92C(3) of the Act are satisfied in the instant case; 3. 2. disregarding the Arm's Length Price ('ALP') as determined by the Appellant in the Transfer Pricing ("TP') documentation maintained by it in terms of section ... assessee has International Transaction during the year, therefore, a reference u/s 92CA was made of the Transfer Pricing Officer (TPO) for determination of Arm's Length Price for the international transactions entered by the assessee. The assessee has reported following international transactions as per audit report in Form 3CEB

L.S Cable India Pvt Ltd, Rewari vs. DCIT, Circle13(1), New Delhi

In the result, appeal of the assessee is allowed

ITA 2572/DEL/2022[2018-19]Status: DisposedITAT Delhi29 May 2025AY 2018-19

Bench: Shri Anubhav Sharma & Shri Manish Agarwal[Assessment Year : 2018-19] L S Cable India Pvt.Ltd., Vs Dcit, Plot No.28-31, Sector-5, Cirlce-13(1), Phase-Ii, Hsiidc Gc Bawal, New Delhi Rewari, Haryana-23501. Pan-Aabcl3621Q Appellant Respondent Appellant By Shri Gaurav Garg, Ca Respondent By Shri S.K.Jhadav, Cit Dr Date Of Hearing 01.04.2025 Date Of Pronouncement 29.05.2025

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

Method 4575166 IT maintenance expenses 3. The AO made a reference u/s 92CA(3) of the Act to TPO for determination of the Arm’s Length Price (“ALP”) of the International Transaction carried out by the assessee. The TPO vide its order dated 31.07.2021 passed u/s 92CA ... Rules and making an upward adjustment of INR 13,12,50,050 to the total income of the appellant by re- determining the arm's length price of international transaction of sale of manufacturing goods. 3. That the impugned AO/TPO order are invalid due to delay in reference

DCIT, Circle-25(1), New Delhi vs. Wrigley India P.Ltd, New Delhi

ITA 1295/DEL/2022[2016-17]Status: DisposedITAT Delhi29 May 2025AY 2016-17

Bench: Shri Vikas Awasthy & Shri Manish Agarwal

Section 250(6)Section 92CSection 92C(3)Section 92D

none of the conditions set out in section 92C(3) of the Act are satisfied in the instant case; 3. 2. disregarding the Arm's Length Price ('ALP') as determined by the Appellant in the Transfer Pricing ("TP') documentation maintained by it in terms of section ... assessee has International Transaction during the year, therefore, a reference u/s 92CA was made of the Transfer Pricing Officer (TPO) for determination of Arm's Length Price for the international transactions entered by the assessee. The assessee has reported following international transactions as per audit report in Form 3CEB

DCIT, Circle- 25(1), New Delhi vs. Wrigley India Pvt. Ltd., New Delhi

ITA 1294/DEL/2022[2015-16]Status: DisposedITAT Delhi29 May 2025AY 2015-16

Bench: Shri Vikas Awasthy & Shri Manish Agarwal

Section 250(6)Section 92CSection 92C(3)Section 92D

none of the conditions set out in section 92C(3) of the Act are satisfied in the instant case; 3. 2. disregarding the Arm's Length Price ('ALP') as determined by the Appellant in the Transfer Pricing ("TP') documentation maintained by it in terms of section ... assessee has International Transaction during the year, therefore, a reference u/s 92CA was made of the Transfer Pricing Officer (TPO) for determination of Arm's Length Price for the international transactions entered by the assessee. The assessee has reported following international transactions as per audit report in Form 3CEB

DCIT, Circle-25(1), New Delhi vs. Wrigley India P.Ltd, New Delhi

ITA 1293/DEL/2022[2014-15]Status: DisposedITAT Delhi29 May 2025AY 2014-15

Bench: Shri Vikas Awasthy & Shri Manish Agarwal

Section 250(6)Section 92CSection 92C(3)Section 92D

none of the conditions set out in section 92C(3) of the Act are satisfied in the instant case; 3. 2. disregarding the Arm's Length Price ('ALP') as determined by the Appellant in the Transfer Pricing ("TP') documentation maintained by it in terms of section ... assessee has International Transaction during the year, therefore, a reference u/s 92CA was made of the Transfer Pricing Officer (TPO) for determination of Arm's Length Price for the international transactions entered by the assessee. The assessee has reported following international transactions as per audit report in Form 3CEB

JCIT, Circle-27(2), New Delhi vs. Wrigley India Pvt. Ltd., New Delhi

ITA 702/DEL/2019[2013-14]Status: DisposedITAT Delhi29 May 2025AY 2013-14

Bench: Shri Vikas Awasthy & Shri Manish Agarwal

Section 250(6)Section 92CSection 92C(3)Section 92D

none of the conditions set out in section 92C(3) of the Act are satisfied in the instant case; 3. 2. disregarding the Arm's Length Price ('ALP') as determined by the Appellant in the Transfer Pricing ("TP') documentation maintained by it in terms of section ... assessee has International Transaction during the year, therefore, a reference u/s 92CA was made of the Transfer Pricing Officer (TPO) for determination of Arm's Length Price for the international transactions entered by the assessee. The assessee has reported following international transactions as per audit report in Form 3CEB

Wrigley India Pvt. Ltd., 206, Okhla Industrial Estate, Phase-3, New Delhi-110020 vs. DCIT, Circle 27(2), New Delhi

ITA 667/DEL/2019[2013-14]Status: DisposedITAT Delhi29 May 2025AY 2013-14

Bench: Shri Vikas Awasthy & Shri Manish Agarwal

Section 250(6)Section 92CSection 92C(3)Section 92D

none of the conditions set out in section 92C(3) of the Act are satisfied in the instant case; 3. 2. disregarding the Arm's Length Price ('ALP') as determined by the Appellant in the Transfer Pricing ("TP') documentation maintained by it in terms of section ... assessee has International Transaction during the year, therefore, a reference u/s 92CA was made of the Transfer Pricing Officer (TPO) for determination of Arm's Length Price for the international transactions entered by the assessee. The assessee has reported following international transactions as per audit report in Form 3CEB

Volkswagen Group Technology Solutions India Pvt. Ltd., Pune vs. National Faceless Assessment Center, Assessment Unit Delhi, Delhi

In the result, appeal of the assessee is partly allowed

ITA 1950/PUN/2024[2020-21]Status: DisposedITAT Pune28 May 2025AY 2020-21

Bench: Dr.Dipak P. Ripote & Shri Vinay Bhamoreआयकर अपील सं. / Ita No.1950/Pun/2024 िनधा"रण वष" / Assessment Year: 2020-21 Volkswagen Group Technology V National Faceless Solutions India Pvt. Ltd., S Assessment Center, Embassy Techzone, 9Th Floor, Assessment Unit, Delhi. 1.3 Congo Building, Rajiv Gandhi, Infotech Park, Infotech Park Hinjavadi, Pune – 411057. Maharashtra. Pan: Aafcv1368L Appellant/ Assessee Respondent / Revenue Assessee By Shri Nikhil Pathak – Ar Revenue By Shri Prakash L Pathade – Cit(Dr) Date Of Hearing 15/05/2025 Date Of Pronouncement 28/05/2025

Section 143(3)Section 144BSection 153Section 92C(1)Section 92C(3)

Appellant by INR 15,77,44,750 by holding that the international transaction of provision of IT services is not at arm's length price as envisaged under the Act. 2. On the facts and in the circumstances of the case, and in law, the Ld. AO/ Ld. DRP erred ... conditions, as set out in Section 92C(3) of the Act are satisfied and hence does not warrant re-determination of arm's length price by the Ld. TPO. The Appellant has complied with the provisions of Section

DCIT, Central Circle 2(2), Kolkata vs. M/S. Ultratech Nathdwara Cement Ltd. (Known As M/S. Binani Cement Ltd.), Kolkata

In the result, all the appeals of the Revenue as well as the assessee are dismissed as infructuous

ITA 470/KOL/2018[2013-14]Status: DisposedITAT Kolkata28 May 2025AY 2013-14

Bench: Shri George Mathan & Shri Rakesh Mishra

Section 115JSection 154Section 234BSection 234CSection 250Section 801ASection 92C

assessee and when such benefit was passed on by the assessee to the said AEs, guarantee commission should have been charged at arm's length price. 10. On the facts and the circumstances of the case and in law, the Ld. CIT(A) has erred in reducing the adjustment made

M/S. Ultratech Nathdwara Cement Ltd.(Formerly Known As M/S. Binani Cement Ltd., Kolkata vs. DCIT, Central Circle - 2(2), Kolkata

In the result, all the appeals of the Revenue as well as the assessee are dismissed as infructuous

ITA 152/KOL/2018[2013-14]Status: DisposedITAT Kolkata28 May 2025AY 2013-14

Bench: Shri George Mathan & Shri Rakesh Mishra

Section 115JSection 154Section 234BSection 234CSection 250Section 801ASection 92C

assessee and when such benefit was passed on by the assessee to the said AEs, guarantee commission should have been charged at arm's length price. 10. On the facts and the circumstances of the case and in law, the Ld. CIT(A) has erred in reducing the adjustment made

ACIT, Cir-14(1), Kolkata vs. M/S. Ultratech Nathdwara Cement Ltd.(Known As M/S Binani Cement Ltd.), Kolkata

In the result, all the appeals of the Revenue as well as the assessee are dismissed as infructuous

ITA 611/KOL/2015[2010-2011]Status: DisposedITAT Kolkata28 May 2025AY 2010-2011

Bench: Shri George Mathan & Shri Rakesh Mishra

Section 115JSection 154Section 234BSection 234CSection 250Section 801ASection 92C

assessee and when such benefit was passed on by the assessee to the said AEs, guarantee commission should have been charged at arm's length price. 10. On the facts and the circumstances of the case and in law, the Ld. CIT(A) has erred in reducing the adjustment made

Binani Cement Ltd., Mumbai vs. D.C.I.T., Central Circle-Xxviii, Kolkata

In the result, all the appeals of the Revenue as well as the assessee are dismissed as infructuous

ITA 1726/KOL/2014[2008-2009]Status: DisposedITAT Kolkata28 May 2025AY 2008-2009

Bench: Shri George Mathan & Shri Rakesh Mishra

Section 115JSection 154Section 234BSection 234CSection 250Section 801ASection 92C

assessee and when such benefit was passed on by the assessee to the said AEs, guarantee commission should have been charged at arm's length price. 10. On the facts and the circumstances of the case and in law, the Ld. CIT(A) has erred in reducing the adjustment made

Australia and New Zealand Banking Group Limited, Mumbai vs. DCIT (International Tax) 1(1)(2), Mumbai

In the result, appeal by the assessee is allowed

ITA 4778/MUM/2024[2020-21]Status: DisposedITAT Mumbai28 May 2025AY 2020-21

Bench: Shri Pawan Singh & Shri Girish Agrawalassessment Year: 2020-21

For Appellant: Shri. Madhur Agrawal, AdvocateFor Respondent: Shri. Kiran Unavekar, Sr. DR
Section 133(6)Section 143(3)Section 144C(3)Section 144C(5)Section 153

assessee are reproduced as under: 2 Australia And New Zealand Banking Group Limited, A.Y. 2020-21 “Ground no 1: Determination of the arm's length price (ALP) of the international transaction relating to processing fees received on account of guarantees Issued to Indian companies based on counter-guarantee from overseas ... under section 234A of the Act.” 2. The ground No.1 raised by the assessee is with regard to determination of Arm’s Length Price (ALP) of the international transaction relating to processing fees received on account of guarantees issued to Indian companies based on counter guarantee from overseas branches

Louis Vuitton India Retail Private Limited, Gurgaon vs. DCIT Circle-1(1), Gurgaon

In the result, the Appeal of the Assessee is partly allowed

ITA 4348/DEL/2024[2020-21]Status: DisposedITAT Delhi28 May 2025AY 2020-21

Bench: Shri Yogesh Kumar U.S. & Shri Avdhesh Kumar Mishra(Ita No. 4348/Del/2024 (A.Y. 2020-21) Louis Vuitton India Vs. Dcit Retail Private Limited Circle-1(1) 901-A, 9Th Floor, Time Gurgaon, Tower, Mg Road, Haryana Gurgaon, Haryana Pan: Aaacl8230E Appellant Respondent

Section 143(3)Section 144BSection 253(1)Section 928Section 92D

satisfy the arm's length principle envisaged under the Act and in doing so, have grossly erred in. 3.1. erroneously rejecting the arm's length price ('ALP") as determined by the Appellant in the TP documentation maintained by it in terms of section 92D of the Act read with Rule ... international transaction in the nature of guarantee’, a reference was made to TPO u/s 92CA (1) of the Act for determination of Arm’s Length Price u/s 92CA(3) of the Act in respect of international transactions entered into by the Assessee during the year under consideration. The TPO vide

Imsofer Manufacturing India Pvt. Ltd., Pune vs. ACIT, Circle-12(1), New Delhi

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

ITA 7924/DEL/2019[2013-14]Status: DisposedITAT Delhi28 May 2025AY 2013-14

Bench: SHRI S.RIFAUR RAHMAN (Accountant Member), SHRI ANUBHAV SHARMA (Judicial Member)

For Appellant: Shri Ajit Jain, ARFor Respondent: Shri Abhishek Deval, Sr. DR
Section 115JSection 271(1)(c)Section 92C(2)

valid reason to reject the alternative benchmarking carried out by the Appellant wherein the Associated Enterprise ('AE') is considered as tested party for arm's length price. 1.5 holding that the Appellant failed to justify the mark-up of 5% on cost with respect to the services which were actually ... reporting. Considering this, the AE, in our opinion, was not justified in charging any mark up on the cost of services. The arm's length price of the services is therefore decided at the actual cost. The adjustment is therefore sustained to the extent of mark up only