Rule 10B does not prescribe a lower or upper turnover limit for transfer-pricing comparables in the software development services segment. Market conditions, assets employed and risks assumed remain material to comparability analysis. An upper turnover filter may therefore be applied where it rationally distinguishes companies with materially different scale and economic profiles. Its application is a factual determination and is not open to interference unless perversity is pleaded and demonstrated. The Tribunal's use of the filter consequently raised no substantial question of law, and the Revenue's appeal was dismissed.
Rule 10B does not prescribe a lower or upper turnover limit for transfer-pricing comparables in the software development services segment. Market conditions, assets employed and risks assumed remain material to comparability analysis. An upper turnover filter may therefore be applied where it rationally distinguishes companies with materially different scale and economic profiles. Its application is a factual determination and is not open to interference unless perversity is pleaded and demonstrated. The Tribunal's use of the filter consequently raised no substantial question of law, and the Revenue's appeal was dismissed.
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TaxTMI 
TaxTMI 
