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Income Tax - Highlights / Catch Notes

Home Highlights June 2024 Year 2024 This

The Appellate Tribunal ruled on Transfer Pricing Adjustment, ...


ITAT ruled on TP adjustments: Selection of comparable companies on various criteria and exclusion of others. Directions issued.

Case Laws     Income Tax

June 26, 2024

The Appellate Tribunal ruled on Transfer Pricing Adjustment, excluding companies with high turnover from comparables. Companies like Larsen & Toubro Infotech Ltd., Tata Elxsi Ltd., Persistent Systems Ltd., Aspire Systems Pvt. Ltd., and Infosys Ltd. were deemed incomparable due to substantial turnover difference. Infobeans Technologies Ltd. and Thirdware Solution Ltd. were considered comparable. Cigniti Technologies Ltd. was excluded for not meeting export revenue filter. Certain companies requested for inclusion were remanded for further assessment. Regarding interest on trade receivables, the Tribunal considered it an international transaction, benchmarking at 6% SBI rate due to lack of evidence on extended credit period. The appeal was partly allowed for statistical purposes.

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