Transfer pricing adjustment concerning comparability selection ...

Comparability key in transfer pricing; size alone can't reject internal comps if transactions normal.

Case Laws Income Tax

September 14, 2024

Transfer pricing adjustment concerning comparability selection and attribution of profits between the respondent assessee and foreign Associated Enterprise. TPO rejected internal comparables due to size of transactions with AEs. ITAT held size alone cannot be grounds for rejecting comparables, unless transactions are contrived or abnormal. Internal TNMM comparing AE and non-AE profitability justified. ALP adjustment deleted. Identification of comparables key to transfer pricing analysis. Choice of method depends on availability of comparables and comparability adjustments. As comparability increases, potential inaccuracies decrease. Consistent with Sony Ericsson case. Attribution of profits between assessee and AE - appeals dismissed following principle of consistency.

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Transfer pricing adjustment concerning comparability selection ...

Comparability key in transfer pricing; size alone can't reject internal comps if transactions normal.

Case Laws Income Tax

September 14, 2024

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