If we are running Primary Domain Controller on Windows 2008 R2 Hyper-V machine how would you set the W32TM (windows time) option on Domain Controller?

First, the basics. This is all you need if you want to keep it simple:

w32tm /config /manualpeerlist:pool.ntp.org,0x8 /syncfromflags:MANUAL

net stop w32timenet start w32time

If the machine is a VM inside Hyper-V, you have to disable time sync. Open VM settings -> Management -> Integration Services and uncheck Time Synchronization

Don't forget your firewall

If you got a firewall between your host and the Internet, it might drop udp/123 which is the NTP protocol.

Thanks, i did the same apart from defining our own NTP server, however I rather disable Time Synch partially by following commmand

reg add HKLM\\SYSTEM\\CurrentControlSet\\Services\\W32Time\\TimeProviders\\VMICTimeProvider /v Enabled /t reg_dword /d0

By doing this hyper-v partially gets synch with host machine and in case of AD restore or restarting it wont be any problem for PDC