Transfer-pricing comparability under TNMM requires close...

Transfer-pricing comparability under TNMM requires close functional alignment rather than broad product similarity. Companies engaged in holograms, paper, films or decorative components were treated as unsuitable comparables for aseptic carton packaging because of differences in products, inputs, intangibles, export orientation and segmental data. A comparable with a different financial year may be considered where corresponding-period data can be extrapolated, and working capital adjustment requires examination where supported by segment practice and prior treatment. For IT-enabled services, medical transcription may qualify as an ITES comparable, while related-party transaction filters and additional comparables require verification under the functional, asset and risk test. A bilateral APA applies only to its covered period; non-covered transactions require arm's length price determination under the Act and Rules.