Substantial question of law in transfer pricing comparables was absent, so the High Court declined interference and dismissed the appeal.

Under Section 260A, an appeal lies only where a substantial question of law arises. In the transfer pricing context, the selection and acceptance of comparables under the TNMM was treated as a factual exercise based on functional profile and record material. The High Court noted that the Tribunal had examined functional similarity and the relevance of the comparable's material cost before reaching its conclusion. Because the dispute turned on concurrent factual findings and no substantial question of law was shown, the Court declined to interfere and the revenue's appeal was dismissed.

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Issues: Whether the Revenue's appeal under Section 260A of the Income-tax Act, 1961 disclosed any substantial question of law arising from the Tribunal's selection of comparables in the transfer pricing analysis.

Analysis: An appeal under Section 260A lies only where the case involves a substantial question of law. The selection and acceptance of comparables in the TNMM exercise turned on the functional profile and factual assessment made by the Tribunal. The Court found that the Tribunal had considered the material on record, including the functional similarity of the companies and the relevance of the material cost of the comparable, and had reached a factual conclusion. In such circumstances, the Court would not interfere with concurrent factual findings in the absence of a substantial question of law.

Conclusion: No substantial question of law arose. The appeal was not entertained and stood dismissed, in favour of the assessee.

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