https://www.taxtmi.com/caselaws?id=445605 ITAT Delhi ruled in favor of the assessee regarding transfer pricing adjustment on royalty payments. The DRP had arbitrarily set a 3% royalty rate without proper comparables, rejecting the TPO's NIL determination. The tribunal found the DRP's approach flawed, noting it relied on judicial precedents rather than conducting proper analysis using appropriate parameters. The court emphasized that CUP method should be applied correctly for royalty payments, and if segregation is permissible, TNMM method applies. The arbitrary 3% rate selection without bringing correct comparables on record was deemed inappropriate, leading to the decision favoring the assessee. en-us Tue, 10 Oct 2023 00:00:00 +0530 Fri, 10 Nov 2023 10:16:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=445605 ITAT Delhi ruled in favor of the assessee regarding transfer pricing adjustment on royalty payments. The DRP had arbitrarily set a 3% royalty rate without proper comparables, rejecting the TPO's NIL determination. The tribunal found the DRP's approach flawed, noting it relied on judicial precedents rather than conducting proper analysis using appropriate parameters. The court emphasized that CUP method should be applied correctly for royalty payments, and if segregation is permissible, TNMM method applies. The arbitrary 3% rate selection without bringing correct comparables on record was deemed inappropriate, leading to the decision favoring the assessee. Case-Laws Income Tax Tue, 10 Oct 2023 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=445605