2026 (9) TMI 1726

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....revenue as well as learned senior counsel Sri. T. Suryanarayana for Miss. Tanmayee Rajkumar, learned counsel for the respondent-assessee. Perused the entire appeal papers. 2. This appeal was admitted to examine the following substantial question of law by order dated 31.01.2022. "Whether on the facts and circumstances of the case and in law, the Tribunal is correct in holding that Accel Transmatic Ltd., (seg), Avani Cimcon Technologies Ltd., Celestial Labs Ltd., E-est Solutions Ltd., Flextronics Software Systems Ltd., (seg), Helios & Matheson Information Technology Ltd., Infosys Technologies Ltd., Ishir Infotech Ltd., Kals Information Systems Ltd., (seg) Lucid Software Ltd., Persistent Systems Ltd., Sasken Communication Technolo....

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.... has recorded its conclusion as follows: "E. CONCLUSION (i) The Court concludes that Chapter X of the Income-tax Act, 1961 constitutes a self-contained code governing transfer pricing, providing a complete statutory framework for determination of the Arm's Length Price (ALP), maintenance of documentation, and assessment of international transactions. (ii) The initial burden of determining the ALP and maintaining the prescribed documentation rests upon the taxpayer, while the Transfer Pricing Officer can interfere with the taxpayer's determination only upon satisfaction of the conditions stipulated under Section 92C(3) of the Act. (iii) The selection or exclusion of comparables is essentially a fac....

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.... requirements of the Act and the Rules. (ix) The tolerance of +/-5% prescribed under Section 92C of the Act is merely a permissible variation and not a standard deduction, and transfer pricing adjustment becomes necessary whenever the variation exceeds the prescribed statutory limit. (x) Working Capital Adjustment is a comparability adjustment and not a selection filter, and its grant depends entirely upon the facts of each case. Findings on such adjustment, like the selection of comparables, ordinarily remain findings of fact and do not warrant interference unless shown to be contrary to the Act or vitiated by perversity." 6. The substantial question of law on which the appeal was admitted on 31.01.2022 do not arise fo....