https://www.taxtmi.com/caselaws?id=271866 Transfer pricing under the transactional net margin method must be based on actual realised margins, not projected profits, and any warranted adjustments are ordinarily made in the margins of comparables rather than in the assessee's own margin; the assessee's claimed foreign exchange and revenue-sharing adjustments were rejected on this basis. In the software comparables exercise, product companies, intellectual property-rich entities, functionally different companies, and entities with high related-party transactions or heavy outsourcing were treated as unsuitable comparables, while some exclusions were upheld and part of the exercise was remanded for fresh verification. Eligibility for deduction under section 10A does not bar arm's length adjustment under Chapter X, and no deduction is available on income enhanced by transfer pricing adjustment, but reversed income and the consequential effect of the depreciation disallowance were to be included in the section 10A computation. en-us Thu, 11 Feb 2016 00:00:00 +0530 Fri, 19 Feb 2016 06:32:47 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=271866 Transfer pricing under the transactional net margin method must be based on actual realised margins, not projected profits, and any warranted adjustments are ordinarily made in the margins of comparables rather than in the assessee's own margin; the assessee's claimed foreign exchange and revenue-sharing adjustments were rejected on this basis. In the software comparables exercise, product companies, intellectual property-rich entities, functionally different companies, and entities with high related-party transactions or heavy outsourcing were treated as unsuitable comparables, while some exclusions were upheld and part of the exercise was remanded for fresh verification. Eligibility for deduction under section 10A does not bar arm's length adjustment under Chapter X, and no deduction is available on income enhanced by transfer pricing adjustment, but reversed income and the consequential effect of the depreciation disallowance were to be included in the section 10A computation. Case-Laws Income Tax Thu, 11 Feb 2016 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=271866