Transfer pricing stay granted where disputed comparables had marginal margin impact and receivables adjustment was arguable

In a transfer pricing dispute, interim protection was granted because the disputed comparables appeared to have only a marginal effect on the arm's length margin, the assessee was debt free, and the adjustments relating to software service provisions and interest on outstanding receivables were arguable. On that basis, the demand for assessment year 2020-21 was stayed for 180 days or until disposal of the appeal, whichever was earlier, and early hearing was listed.

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Issues: Whether the demand for assessment year 2020-21 deserved stay in a transfer pricing dispute where the comparables rejected and introduced by the Transfer Pricing Officer had a marginal effect on the margin, and whether the assessee's financial position and the arguable nature of the receivables adjustment justified interim protection.

Analysis: The Tribunal noted that the disputed comparables appeared to have only a marginal impact on the arm's length margin. It also noticed that the assessee was debt free and that the adjustments relating to software service provisions and interest on outstanding receivables were arguable for the purposes of interim relief.

Outcome: The stay application was allowed, the demand for assessment year 2020-21 was stayed for 180 days or until disposal of the appeal, whichever was earlier, and the appeal was listed for early hearing.

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