Transfer Pricing: Excluding Non-Comparable Entities Under Section 92C for Accurate ALP Determination

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....The ITAT upheld the exclusion of several entities from the final set of comparables for transfer pricing adjustment, agreeing with the CIT(A) that companies engaged in multifarious activities, such as Megasoft, or those impacted by extraordinary events like amalgamation, could not be suitably compared. Entities providing KPO or high-end services were excluded due to functional dissimilarity with the assessee's low-end service provision. Large corporations with significant brand value, intellectual property, or R&D, such as Infosys and Wipro, were also excluded for lack of comparability. Comparables lacking segmental financial details or involved in multiple acquisitions were similarly rejected. However, Vishal Information Technologies Ltd.,.........