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DATE: September 18, 2018 (Date of pronouncement)
DATE: October 23, 2018 (Date of publication)
AY: -
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CITATION:
Transfer Pricing: The categorical finding of fact by the ITAT that a comparable (Motilal Oswal) is engaged in a qualitatively different and diversified business than that of the assessee cannot be challenged as a substantial question of law as the finding is not perverse or vitiated by any error apparent on the face of the record

We are in full agreement with the findings given by the ITAT. In fact, looking to the facts as narrated by the ITAT in the impugned order, we would have no hesitation in holding that by comparing Motilal Oswal Investments Advisory Pvt. Ltd. to the assessee company (for the purposes of determining the ALP) would be like comparing apples and oranges. This being the case, we do not find any infirmity in the order of the ITAT excluding Motilal Oswal Investments Advisory Pvt. Ltd. from the final list of comparables which would give rise to any substantial question of law

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DATE: September 18, 2017 (Date of pronouncement)
DATE: October 3, 2017 (Date of publication)
AY: 2009-10
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CITATION:
Transfer Pricing: Steps to be undertaken in identification of comparable transactions/entities while fixing the ALP and the margin explained. Though the TNMM method allows broad flexibility tolerance in the selection of comparables, broad functionality is not sufficient to find the comparable entity. There must be similarity with the controlled transaction

In so far as identifying comparable transactions/entities is concerned, the same would not differ irrespective of the transfer pricing method adopted. In other words, the comparable transactions/entities must be selected on the basis of similarity with the controlled transaction entity. Comparability of controlled and uncontrolled transactions has to be judged, inter alia, with reference to comparability factors as indicated under rule 10B(2) of the Income Tax Rules, 1962. Comparability analysis by the transactional net margin method may be less sensitive to certain dissimilarities between the tested party and the comparables. However, that cannot be the consideration for diluting the standards of selecting comparable transactions/entities. A higher product and functional similarity would strengthen the efficacy of the method in ascertaining a reliable arm’s length price. Therefore, as far as possible, the comparables must be selected keeping in view the comparability factors as specified. Wide deviations in profit level indicator must trigger further investigations/analysis

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DATE: September 25, 2017 (Date of pronouncement)
DATE: October 3, 2017 (Date of publication)
AY: 2007-08
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CITATION:
Transfer Pricing: A giant risk taking company like Infosys Technologies with huge significant intangibles and having huge assets leading to the exorbitant turnover is not comparable with a captive unit which is subject to minimum/ limited risk. The fact that the functional profile of Infosys is similar to that of the assessee is irrelevant

When we examine the profile of the assessee company vis-à-vis Infosys Technologies Limited in the light of the judgment in CIT vs. Agnity India Technologies Pvt. Ltd. (supra), there is no comparability for benchmarking the international transactions for the reasons inter alia that Infosys Technologies Limited is a giant risk taking company whereas, on the other hand, the assessee is a captive unit of its parent company and prone to minimum/ limited risk; that the Infosys Technologies Limited is having huge significant intangibles and having huge assets leading to the exorbitant turnover; that it is not in dispute that functional profile of assessee company and CIT vs. Agnity India Technologies Pvt. Ltd. is similar

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DATE: December 16, 2016 (Date of pronouncement)
DATE: August 9, 2017 (Date of publication)
AY: 2008-09
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CITATION:
Transfer Pricing: A party is not barred in law from withdrawing from its list of comparables a company found to have been included on account of mistake of fact. The Transfer Pricing Mechanism requires comparability analysis to be done between like companies and controlled and uncontrolled transactions by carrying out of FAR analysis. The assessee's submission in arriving at the ALP is not final. It is for the TPO to examine and find out the companies listed as comparables which are in fact comparable

We find that the impugned order of the Tribunal holding that a party is not barred in law from withdrawing from its list of comparables, a company, if the same is found to have been included on account of mistake as on facts, it is not comparable. The Transfer Pricing Mechanism requires comparability analysis to be done between like companies and controlled and uncontrolled transactions. This comparison has to be done between like companies and requires carrying out of FAR analysis to find the same. Moreover, the Assessee’s submission in arriving at the ALP is not final. It is for the TPO to examine and find out the companies listed as comparables which are, in fact comparable

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DATE: August 5, 2016 (Date of pronouncement)
DATE: August 20, 2016 (Date of publication)
AY: 2010-11
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CITATION:
Transfer Pricing: The TPO is required to be consistent in matters relating to selection of comparables. If a comparable has been included or rejected in an earlier year, he is not entitled to take a different view in a later year if there is no change in circumstances

Without any proper reason or change in the functionality and financial data, it cannot be held that these companies are to be excluded/included (as prayed for herein above), in the intermediary period of the assessment year under consideration. The TPO has to bring some material on record to show as to why these comparables which were excluded/included (as prayed for herein above) in the earlier year and also in succeeding year, cannot be excluded/included in the year under consideration

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DATE: September 16, 2015 (Date of pronouncement)
DATE: February 13, 2016 (Date of publication)
AY: 2007-08
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CITATION:
Transfer Pricing: Companies with large turnover like Infosys & Wipro are not comparable to companies with smaller turnover and should be excluded from the list of comparables

The said Companies are no doubt large and distinct companies where the area of development of subject services are different and as such the profit earned therefrom cannot be a bench-marked or equated with the assessee. The Tribunal whilst passing the impugned Order has considered the said principles whilst coming to the conclusion that the said three Companies cannot be treated to be comparable to the Assessee Company. The turn over is obviously a relevant factor to consider the comparability

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DATE: December 4, 2014 (Date of pronouncement)
DATE: December 5, 2014 (Date of publication)
AY: 2007-08
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CITATION:
Transfer Pricing: Companies which are functionally similar to the assessee cannot be excluded merely because of high or low turnover

When a company is functionally similar to that of the assessee company, the same cannot be excluded merely because of its turnover at a higher or lower level. Here it is important to mention that sec. 92C(1) of the Income-tax …

Calibrated Healthcare Systems India Pvt. Ltd vs. ACIT (ITAT Delhi) Read More »

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DATE: November 7, 2014 (Date of pronouncement)
DATE: November 8, 2014 (Date of publication)
AY: 2008-09
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CITATION:
Though there is a functional difference between a PE Fund and a Merchant Banker, A manager or a sub-advisor to the PE Fund cannot be equated with the PE Fund so as not to be comparable with Merchant Bankers

(i) A merchant bank, apart from helping businessmen in raising finance, also renders consultancy services. It helps its clients in raising finance through issue of shares, debentures, bank loans, etc., from the domestic and international market. The term “Merchant Banker‘ …

Xander Advisors India Pvt. Ltd vs. ACIT (ITAT Delhi) Read More »

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DATE: November 23, 2012 (Date of pronouncement)
DATE: October 20, 2014 (Date of publication)
AY: 2007-08
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CITATION:
Transfer Pricing: Turnover filter is an important criteria in choosing comparables

(i) The ICAI TP Guidelines note on this aspect lay down in para 15.4 that a transaction entered into by a Rs. 1,000 crore company cannot be compared with the transaction entered into by a Rs. 10 crore company. The …

Trilogy E-Business Software India vs. DCIT (ITAT Bangalore) Read More »