INCOME TAX ACT, 1961

Section 92C

Transfer pricing - Computation of ALP - Selection of comparables -

Assessee was a subsidiary of Apotex Holdings, and undertook manufacturing of Active Pharmaceutical Ingredients ('APIs') and intermediates (pharmaceutical products) for Apotex Group. Issue was as regards selection of comparable for transfer pricing study. Held:/b> Functions performed by Oil Field Instrumentation (India) Ltd., during relevent years continued to be the same as it was doing in the earlier year 2008-09, which was so mentioned by the Tribunal, though in matter of sister concern. As there was neither change in profile or the functions, therefore following the decision of the coordinate bench in the matter of the sister concern of the assessee, TPO was directed to exclude company from the list of comparables. In relation to inclusion of Max Neeman Medical Intl. Ltd, it was found that factual findings recorded by TPO were incorrect. However, other aspect whether company was functionally comparable or not was not examined by the TPO. Therefore, issue was remanded back to DRP for examining it afresh.