PARAMETRIC TECHNOLOGY (INDIA) PRIVATE LIMITED,BENGALURU vs. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 2(1)(2), BENGALURU

ITA 2514/BANG/2024Status: DisposedITAT Bangalore24 February 2026AY 2021-2231 pages
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What did the Tribunal hold?

The Tribunal held that turnover is a relevant criterion for determining comparability in transfer pricing, as economies of scale impact profitability. Companies with substantially higher turnover enjoy cost efficiencies not available to smaller entities, necessitating an upper turnover filter for fair comparison.

What were the facts?

The assessee, engaged in software development and distribution, challenged the TPO's inclusion of high-turnover companies as comparables for benchmarking its international transactions. The assessee argued that these companies were functionally different and their scale of operations distorted the arm's-length analysis.

What were the issues?

Whether companies with significantly higher turnover than the assessee can be considered comparable in transfer pricing analysis, and if turnover is a relevant filter for comparability.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144C(13)

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Cases cited in this judgment(3)Show list

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Income Tax Appellate Tribunal, C BENCH, BANGALORE

Before: SHRI WASEEM AHMED & SHRI KESHAV DUBEY

For Appellant: Shri Darpan Kirpalani, CA
For Respondent: Dr. Divya K.J, CIT (DR)
29.01.

2026 24.02.2026 PER WASEEM AHMED, ACCOUNTANT MEMBER:

The present appeal has been instituted by the assessee against the order of the Ld. AO/TPO u/s 143(3) r.w.s. 144C(13) of the Act dt. 23.10.2024 for the AY 2021-22

2.

In the memo of appeal, the assessee has raised as many as 14 grounds of appeal challenging the addition made on the issue of Transfer pricing adjustments, we for the sake of brevity and convenience are not inclined to reproduce here.

2.

1 At the outset, we note that the Ground No. 4 is general in nature and does not call for any specific adjudication. Accordingly, the same is dismissed as infructuous. IT(TP)A No.2514

The order continues below.

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