Exclusion of Companies from Comparables List Upheld: Arm's Length Price Determination

The court upheld the Tribunal's decision to exclude M/s. SIRO, Choksi Laboratories Ltd, and Syngene International Pvt Ltd from the comparables list for determining the Arm's Length Price of international transactions. The differences in business models and substantial related party transactions justified their exclusion. The court found no fault in the Tribunal's reasoning and dismissed the appeal, concluding that there was no substantial question of law raised by the Revenue in challenging the exclusion of these entities.

---

---

Issues:
Challenge to Tribunal's order on exclusion of comparables for determining Arm's Length Price (ALP) of international transactions.

Analysis:
1. SIRO Clinpham Pvt Ltd (M/s. SIRO): The appellant argued that M/s. SIRO should be considered as comparable for determining ALP due to its inclusion in the transfer pricing study and past Tribunal's order. However, the court held that an assessee can withdraw a company from comparables list if not suitable. The difference in business models between M/s. SIRO and the respondent justified its exclusion. The court cited relevant case laws to support the decision, emphasizing that a change in law and business model differences make entities non-comparable. Thus, the Tribunal's decision to exclude M/s. SIRO was upheld.

2. Choksi Laboratories Ltd: Both parties agreed that Choksi Laboratories had a different business model from the respondent, making them non-comparable. The court referred to previous decisions and upheld the Tribunal's exclusion of Choksi Laboratories as a comparable entity for ALP determination.

3. Syngene International Pvt Ltd: The Tribunal's decision to exclude Syngene International was based on it being a wholly owned subsidiary with substantial related party transactions. The Revenue did not dispute this fact. The court agreed with the Tribunal's decision, stating that including Syngene International in the comparables list was not necessary for determining ALP. The court found no fault in the Tribunal's decision and dismissed the appeal.

In conclusion, the court found no substantial question of law in the issues raised by the Revenue regarding the exclusion of the three entities from the comparables list for determining the Arm's Length Price of the international transactions. Therefore, the appeal was dismissed based on the detailed analysis and explanations provided for each issue.

---