The exercise of determining the ALP in respect of international transactions between related parties is aimed at determining the price which would have been charged for products and services as nearly as possible if such international transactions were not controlled by the virtue of their being executed between related parties. The object of the exercise is to remove the effect of any influence of the prices or costs that may have been exerted on account of international transactions being entered into between the related parties. It is clear that for the exercise of determining the ALP to be reliable, it is necessary that the controlled transactions be compared with the uncontrolled transactions which are similar in all material aspects.

Thus, when the comparable not only failed on the service revenue from export/ ITES filter of 75% adopted by the TPO but also the diminishing revenue filter which has been demonstrated by the assessee, the Tribunal was correct in excluding such comparable and hence no inference in called for with respect to such finding of the Tribunal. (AY. 2012-13)