InputManager.getLocalPosition(displayObject, pointer, output) will return the local coordinates of the specified displayObject and pointer.

InputManager.hitTest will test for pointer hits against a Sprite/Image, its hitArea (if set) or any of its children.

src/input/InputHandler.js

@@ -498,7 +498,7 @@ Phaser.InputHandler.prototype = {
         }
 
         //  Need to pass it a temp point, in case we need it again for the pixel check
-        if (this.game.input.hitTest(this.sprite, pointer))
+        if (this.game.input.hitTest(this.sprite, pointer, this._tempPoint))
         {
             return true;
         }