Transfer pricing comparables and adjustments: Tribunal revisits loss-maker status, segmental comparability, working capital relief, and risk allocatio...
Business expenditure disallowance failed where commission, related-party salary and promotion payments were supported by records and inquiry was inade...
The High Court upheld the decision of the ITAT regarding the selection of comparables for benchmarking analysis under the Transactional Net Margin Method (TNMM). The court concurred that companies like Kitco Ltd., TCE Consulting Engineers Ltd., Project and Development India Ltd., and Mahindra Consulting Engineers Ltd. were not appropriate comparables for the assessee, who was engaged in engineering and design services. Despite the TNMM's tolerance for functional dissimilarities, the comparables' broad functional profiles must be similar. Comparing entities with different functionalities solely based on the TNMM's tolerance would be erroneous. The ITAT's findings aligned with the arm's length principle provisions u/s 92C of the Income Tax Act.
The High Court upheld the decision of the ITAT regarding the selection of comparables for benchmarking analysis under the Transactional Net Margin Method (TNMM). The court concurred that companies like Kitco Ltd., TCE Consulting Engineers Ltd., Project and Development India Ltd., and Mahindra Consulting Engineers Ltd. were not appropriate comparables for the assessee, who was engaged in engineering and design services. Despite the TNMM's tolerance for functional dissimilarities, the comparables' broad functional profiles must be similar. Comparing entities with different functionalities solely based on the TNMM's tolerance would be erroneous. The ITAT's findings aligned with the arm's length principle provisions u/s 92C of the Income Tax Act.
Note: It is a system-generated summary and is for quick reference only.
TaxTMI 
TaxTMI 
of 4821 
Join Channel 
