ADVANCE POWER DISPLAY SYSTEMS LTD,ANDHERI - EAST vs. DY COMMISSIONER OF INCOME TAX -9(1)(1), AAYKAR BHAVAN,CHURCH GATE,MUMBAI

Facts

The assessee, a 100% Export Oriented Unit (EOU) manufacturing Switch Mode Power Supplies (SMPS), challenged the transfer pricing adjustments and other disallowances confirmed by the CIT(A) for Assessment Years 2013-14 to 2016-17. The core dispute revolved around the selection of comparable companies for benchmarking international transactions.

Held

The Tribunal noted that the assessee's product (SMPS) is electronic, while many comparables selected by the TPO were electrical companies. The Tribunal found that comparing electronic products with electrical products is like comparing apples with oranges.

Key Issues

Whether the comparables selected by the TPO for benchmarking international transactions were in the same line of business as the assessee's electronic products, and the validity of certain disallowances.