The Tax Publishers2021 TaxPub(DT) 0096 (Bang-Trib)

INCOME TAX ACT, 1961

Section 92C

Being a product based company, was not strictly comparable to service company like assessee had related party transactions amounting to 34.68% of total turnover. Thus, it failed 25% RPT filter applied by TPO and hence, could not be taken as comparable.

Transfer pricing - Determination of ALP - Selection of comparables - Failing of RPT filter

Assessee rendered software development services to its AE abroad. TPO considered Bodhtree Consulting Ltd. as comparable to assessee's case. Held: Being a product based company, was not strictly comparable to service company like assessee had related party transactions amounting to 34.68% of total turnover. Thus, it failed 25% RPT filter applied by TPO and hence, could not be taken as comparable.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2005-06

INCOME TAX ACT, 1961

Section 92C

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