#intra-group services

Delhi ITAT quashed a Rs 9.70 million transfer-pricing addition, holding that a zero arm’s-length price for intra-group management and support services breaches transfer-pricing rules. Taxpayers must demonstrate a tangible benefit to justify pricing. The ruling affects firms using NIL-price intra-group services under the Income Tax Act.

The ITAT Ahmedabad has struck down a Rs. 17.11 crore transfer pricing adjustment, ruling that tax authorities cannot impose a nil arm's length price for intra-group services without applying prescribed benchmarking methods or demonstrating the absence of real economic benefit. This sets a vital precedent for multinational enterprises relying on shared services, forcing tax departments to move beyond presumption and demand substantiated analysis under Section 92C.