Comparability analysis in transfer pricing: factual findings on functional differences cannot be disturbed in section 260A appeals.

In an appeal under section 260A, the Court treated the comparability dispute as a pure question of fact and declined to interfere with the ITAT's exclusion of Mold-Tek Technologies Ltd. The ITAT had found that the assessee rendered back-office research services in the IT sector, while Mold-Tek Technologies Ltd. provided engineering design, detailing and related services. Because that factual assessment governed the comparability exercise, the Revenue's challenge was held not maintainable on facts and the exclusion remained undisturbed.

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Issues: Whether the Revenue could challenge the ITAT's finding excluding Mold-Tek Technologies Ltd. from the comparable set in an appeal under section 260A of the Income-tax Act, 1961.

Analysis: The dispute turned on the ITAT's factual assessment that the assessee rendered back-office research services in the IT sector, while Mold-Tek Technologies Ltd. provided engineering design, detailing and related services. The Court treated the controversy as a pure question of fact and held that such findings could not be interfered with in an appeal under section 260A.

Conclusion: The Revenue's challenge was not maintainable on facts and the exclusion of Mold-Tek Technologies Ltd. was not disturbed.

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