Held that functionally dissimilar companies cannot be taken as comparable. Government owned company taken as comparable on ground of functional similarity. Low turnover for particular year cannot be ground to exclude company functionally similar. The issue was restored to the Transfer Pricing Officer to recompute the working capital adjustment as per the arm’s length price margins after hearing the assessee. (AY. 2014-15)
Honda R and D (India) Pvt. Ltd. v. Dy. CIT (2022) 94 ITR 15 (SN) (Delhi)(Trib.)
S. 92C : Transfer pricing-Arm’s length price-Comparables-Functionally dissimilar companies cannot be taken as comparable–Government owned company taken as comparable on ground of functional similarity-Low turnover for particular year cannot be ground to exclude company functionally similar-Matter remanded.