2025 (12) TMI 1809

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.... in the applications, the delay of 31 days in refiling and the delay of 63 days in filing both these appeals is condoned. 2. The applications stand disposed of. CM APPL. 76998/2025 (Exemption) in ITA 728/2025; CM APPL. 77017/2025 (Exemption) in ITA 732/2025; 3. Exemptions are allowed, subject to all just exceptions. 4. The applications stand disposed of. ITA 728/2025 & ITA 732/2025 5. The challenge in these appeals under Section 260A of the Income Tax Act, 1961 (the Act) is to the common order dated 12.03.2025 passed by the Income Tax Appellate Tribunal (ITAT) deciding two appeals being ITA No. 9727/Del/2019 relating to Assessment Year (AY) 2015-16 and ITA No. 670/Del/2021 relating to AY 2016-17. 6. Mr Puneet Rai, le....

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.... heard the rival submissions of the Ld. Representative of the parties and perused the material available on records. The Ld. TPO as well as the Hon'ble DRP has upheld CUP as the most appropriate method for benchmarking transactions with respect to payment of royalty. Since the application of CUP is not disputed either by Ld. AR or DR, we hold CUP to be the most appropriate method for benchmarking the payment of royalty. The issue thus remaining for our consideration is with respect to inclusion / exclusion of comparables. xxx xxx xxx 16.2 We find force in the contention of the assessee that royalty agreements operating in different geographical regions can be applied as a filter as the Ld. TPO himself has accepted royalty ....

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....w which in our considered view is incorrect as evident from the license agreement as well as other documentary evidence submitted by the assessee. The assessee has paid royalty for use of trademark and marketing information /marketing know-how. All the eight comparables listed in the chart in para 16.5 above are from the same geography and same industry and hence are valid comparables to that of the assessee. Accordingly, the Ld. AO/TPO is directed to include the aforesaid eight comparables in the final set of comparable agreements for the purpose of benchmarking the payment of royalty by the assessee. Ground No. 6 and 9 are thus allowed." The inclusion of eight comparables was not questioned before us. 8. Consequ....