Penalty for estimation of income and disallowances for tax non-deduction clarified: estimation-based penalties not sustainable; additions without conc...
Managerial remuneration disallowance under s.40A(2)(b) challenged over alleged tax-avoidance; appellate decision restored deletion of addition for dir...
Classification of imported goods as electronic cigarette versus tobacco product reversed for lack of proof; order set aside for jurisdictional overrea...
Functional comparability is essential in transfer pricing analysis, and a government-owned enterprise with broader consultancy and project execution functions cannot be compared with a captive technical support provider. HSCC India Ltd. was excluded because it rendered comprehensive health-sector consultancy, served government ministries and agencies, and enjoyed advantages flowing from its governmental character; the absence of a subsidy did not make it comparable. Mitcon Consultancy and Engineering Services Ltd. was also excluded because it had diversified operations across multiple sectors and lacked reliable segmental revenue data in its signed accounts, making a valid comparison impossible. The assessee's appeal was allowed and the transfer pricing exercise was to proceed after excluding both entities.
Functional comparability is essential in transfer pricing analysis, and a government-owned enterprise with broader consultancy and project execution functions cannot be compared with a captive technical support provider. HSCC India Ltd. was excluded because it rendered comprehensive health-sector consultancy, served government ministries and agencies, and enjoyed advantages flowing from its governmental character; the absence of a subsidy did not make it comparable. Mitcon Consultancy and Engineering Services Ltd. was also excluded because it had diversified operations across multiple sectors and lacked reliable segmental revenue data in its signed accounts, making a valid comparison impossible. The assessee's appeal was allowed and the transfer pricing exercise was to proceed after excluding both entities.
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