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| The Tax Publishers2019 TaxPub(DT) 4712 (Mum-Trib) INCOME TAX ACT, 1961
Section 92C
With 72.98% onsite development cost, TNMM method in the TP studies required only broad functional comparability and not to the precise matching of comparable companies. As Acropetal Technologies Limited. (Seg.) was otherwise functionally comparable being engaged in software development. As Acropetal Technologies Limited (Seg.) was functionally comparable being engaged in software development services, it was rightly included in the list of comparables.
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Transfer pricing - Determination of ALP - Selection of comparables - Broad functional comparability vis-a-vis TNMM method
Assessee rendered software development services to its AE abroad. TPO considered Acropetal Technologies Ltd. (Seg.) as comparable to assessee's case. Assessee challenged this on the ground that Acropetal Technologies Ltd. (Seg.), had not met the filter relating to on-site revenue filters. Held: With 72.98% on-site development cost, TNMM method in the TP studies required only broad functional comparability and not to the precise matching of comparable companies. As Acropetal Technologies Limited. (Seg.) was otherwise functionally comparable being engaged in software development. As Acropetal Technologies Limited (Seg.) was functionally comparable being was engaged in software development services, it was rightly included in the list of comparables.
REFERRED :
FAVOUR : Against the assessee.
A.Y. : 2008-09
INCOME TAX ACT, 1961
Section 92C
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