Transfer-pricing comparability requires exclusion of financially illogical super-profit comparables and correction of unsupported annual-report and margin findings.

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....Transfer-pricing benchmarking requires exclusion of comparables with financially illogical gross-profit-to-sales ratios of 100 per cent or more, applying the principle that super-profit-making companies should not be retained for comparability analysis. The inclusion of four such entities was set aside and remitted to the TPO for fresh consideration after hearing the assessee. A comparable could not be rejected for non-availability of its annual report where that report had been furnished to the TPO; its inclusion in the benchmarking exercise was directed. The TPO's positive gross-profit-margin computation for another comparable was also found erroneous because the record showed a negative margin, requiring fresh determination.....