Transfer Pricing Dispute: ITAT Validates CUP Method, Mandates Indigenous Tested Party and Comprehensive Service Comparisons

ITAT adjudicated a transfer pricing dispute involving international transactions. The tribunal upheld the TPO's rejection of the assessee's transfer pricing study, determining that the tested party should be indigenous rather than foreign affiliated entities. The ITAT mandated adoption of the Comparable Uncontrolled Price (CUP) method for benchmarking and validated Kotak as a suitable comparable, subject to specific service comparisons. The tribunal critically noted that the TPO should comprehensively examine evidence regarding intra-group services, emphasizing the need for thorough analysis of arm's length pricing mechanisms. The decision underscores the importance of substantive evidence and proper transfer pricing methodology in evaluating cross-border transactions, ultimately remanding the matter for detailed quantitative assessment consistent with income tax regulations. .....

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