https://www.taxtmi.com/caselaws?id=308269 Functional comparability in transfer pricing depends on similarity of activities, reliable segmental results, accounting period consistency, and whether a company is engaged in software development services rather than software products or diversified operations. On that basis, a company with a different financial year was to be included after margin verification, the IT services segment of a multi-segment company was to be used, and software product companies with unreliable comparability were excluded, requiring recomputation of the arm's length margin. Outsourcing expenditure incurred for software development, where subcontracted work formed part of the final software supplied, was treated as operating cost because it was integral to the tested service. en-us Mon, 21 May 2018 00:00:00 +0530 Mon, 12 Jun 2023 21:13:27 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=308269 Functional comparability in transfer pricing depends on similarity of activities, reliable segmental results, accounting period consistency, and whether a company is engaged in software development services rather than software products or diversified operations. On that basis, a company with a different financial year was to be included after margin verification, the IT services segment of a multi-segment company was to be used, and software product companies with unreliable comparability were excluded, requiring recomputation of the arm's length margin. Outsourcing expenditure incurred for software development, where subcontracted work formed part of the final software supplied, was treated as operating cost because it was integral to the tested service. Case-Laws Income Tax Mon, 21 May 2018 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=308269