| |
| The Tax Publishers2019 TaxPub(DT) 8188 (Mum-Trib) INCOME TAX ACT, 1961
Section 92CA
As the revenue of the comparable entity was 547 times more than that of assessee-company and as said comparable entity was engaged in diversified activities and had owned know-how, patents, brands, etc., it could not be considered as functionally comparable with that of assessee-company.
|
Transfer pricing - Computation of ALP - Selection of comparables - Functional dissimilarity
Assessee-company rendered software development services to its AE abroad. Assessee challenged the inclusion of Wipro Ltd.(segment) in the final list of comparable companies made by TPO, while determing ALP under section 92CA. Assessee contended that Wipro Ltd. was a market leader and had brand value associated with it and its revenue during the year were more than 547 times than its company. Held: Wipro Ltd.(segment) was a market leader and had brand value associated with it and worked as a full-fledged risk-taking entrepreneur and its revenue during the year were more than 547 times than that of assessee-company. Furthermore, said comparable entity was engaged in diversified activities and had owned know-how, patents, brands, etc. and also had huge year-end inventories. Thus, Wipro Ltd.(segment) could not be considered as functionally comparable with that of assessee-company.
REFERRED : Dialogic Networks India P. Ltd. v. ACIT [Mumbai Tribunal, ITA No.7280/Mum/2012 A.Y. 2008-09],CIT v. Pentair Water India P. Ltd. [Bombay High Court, ITA No. 18 of 2015] : 2015 TaxPub(DT) 5492 (Bom-HC)
FAVOUR : In assessee's favour
A.Y. : 2010-11 & 2011-12
INCOME TAX ACT, 1961
Section 92CA
 SUBSCRIBE FOR FULL CONTENT
|