“comparable companies”

Transfer PricingSection 92CSection 92C1,304 judgments

The decision most relied on for comparable companies is Rampgreen Solutions Pvt. Ltd. v. CIT (377 ITR 533), cited in 196 judgments on BharatTax.

Leading authorities on comparable companies

Rampgreen Solutions Pvt. Ltd. v. CIT

377 ITR 533 · 2015 · High Court

196

citing judgments

Knowledge Process Outsourcing (KPO) service providers are functionally dissimilar to Business Process Outsourcing (BPO) or Information Technology Enabled Services (ITeS) providers and cannot be compared for transfer pricing purposes, even under the Transactional Net Margin Method (TNMM). Further, companies with significantly different business models, such as those with extensive subcontracting, should be excluded as comparables.

DCIT v. Quark Systems (P.) Ltd.

38 SOT 307 · 2010 · ITAT

179

citing judgments

An assessee is not estopped or precluded from seeking the exclusion of a company from its Transfer Pricing study comparables, even if initially selected, if it can demonstrate valid reasons for non-comparability.

CIT v. Agnity India Technologies (P.) Ltd.

36 Taxmann.com 289 · 2013 · High Court

171

citing judgments

The Delhi High Court holds that Infosys Ltd. is not comparable to a captive software development service provider for transfer pricing analysis, given its huge turnover, high profit margins, ownership of intangible intellectual property rights, branded products, and differing risk profile.

Chryscapital Investment Advisors (India) Pvt. Ltd. v. DCIT

376 ITR 183 · 2015 · High Court

170

citing judgments

For transfer pricing comparability analysis, companies should not be excluded solely based on higher turnover if they are otherwise functionally comparable, unless the turnover difference reflects fundamental functional dissimilarities, brand value, or risk profiles that materially impact profitability.

Autodesk India Pvt.Ltd. v. DCIT

96 Taxmann.com 263 · 2018 · ITAT

116

citing judgments

A high turnover criterion, such as above Rs. 200 crores, is a valid ground to exclude companies from the list of comparable companies in a transfer pricing analysis, as such companies are not comparable to those with significantly lower turnover.

SAP Labs India Pvt. Ltd. v. ACIT

44 SOT 156 · 2011 · ITAT

100

citing judgments

Foreign exchange fluctuation gains or losses are operational in nature and must be included in the computation of the operating margin for both the assessee and comparable companies when determining the Arm's Length Price.

Mentor Graphics (Noida) (P) Ltd. v. DCIT

109 ITD 101 · 2007 · ITAT

citing judgments

A working capital adjustment is mandated and a prerequisite for correctly determining the Arm's Length Price (ALP) under Rule 10B(1)(e) and Rule 10B(3) of the Income Tax Rules, 1962. This adjustment accounts for differences in working capital and outstanding receivables between the assessee and comparable companies.

Avenue Asia Advisors Pvt. Ltd. v. DCIT

398 ITR 120 · 2017 · High Court

citing judgments

The Delhi High Court holds that a detailed functional and working capital analysis, considering various factors, is essential before treating outstanding receivables as a separate international transaction for transfer pricing adjustments on notional interest. Simply making an adjustment based on receivables alone without such study distorts the transaction's character.

Judgments citing comparable companies

Calsonic Kansei Motherson Auto Products Private Limited, New Delhi vs. Assistant/Deputy Commissioner of Income Tax, New Delhi

ITA 4500/DEL/2024[2020-21]Status: DisposedITAT Delhi31 Jul 2025AY 2020-21

Bench: Shri Prakash Chand Yadav & Shri Manish Agarwal

companies comparable to the Appellant in spite of the fact that such additional filters are inappropriate and should not be applied for selecting the comparable companies; 2. 3. rejecting the comparables identified by the Appellant in its TP documentation for benchmarking its international transactions, without providing any cogent reasons ... rejecting the Appellant's claim for adjustment on account of difference in working capital employed by the Assessee vis-a-vis the comparable companies; 2. 7. arbitrarily excluding "Other income in operating revenue for the purpose of making TP adjustment of Rs.4,66,30,609; 2. 8. Computing the value

Fresenius Kabi Oncology Ltd, New Delhi vs. ITO, Ward-9(3), New Delhi

In the result appeal of the assessee is allowed

ITA 605/DEL/2020[2015-16]Status: DisposedITAT Delhi31 Jul 2025AY 2015-16

Bench: Shri Prakash Chand Yadav & Shri Manish Agarwalfresenius Kabi Oncology Ltd. Income Tax Officer, B-310, Som Dutt Chamber, Ward-9(3), Bhikaji Cama Place, Vs. New Delhi. New Delhi-110066. Pan-Aabcd7720L (Appellant) (Respondent)

Section 143(3)Section 144CSection 92C

facts and in law in rejecting AEs as tested party without taking cognizance of the financial data submitted for AEs as well as foreign comparable companies by the Appellant during the course of assessment proceedings. 3.6 Without prejudice, that while computing the entity wide operating profit margin of the Appellant ... extra-ordinary expenditure/ costs incurred during the year under consideration is required to be excluded to establish comparability of the Appellant with the independent comparable companies in terms of Rule 10B(2) and Rule 10B(3) of the Income-tax Rules, 1962. Fresenius Kabi Oncology Ltd. vs. ITO 3.10 Without

Fedex Express Transportation and Supply Chain Services (India) Private Limited, Mumbai vs. ACIT 1(3)(1), Mumbai

In the result the appeal filed by the assessee is partly allowed

ITA 4783/MUM/2024[2020-21]Status: DisposedITAT Mumbai30 Jul 2025AY 2020-21

Bench: Smt. Beena Pillai () & Shri Girish Agrawal ()

Section 143(3)Section 144Section 144BSection 144C(1)Section 144C(13)Section 92CSection 92C(3)

adopting faulty assessment procedure to finalize the adjustment, such as but not limited to, application of filters, functional and economic analysis, selection of comparable companies, computation of profit margins of the Appellant and of the comparable companies, allowance of appropriate adjustments, and inappropriate consideration/non-consideration of the information, arguments and evidence ... introducing arbitrary additional filter(s) in determining the ALP. 3.4. The lower authorities erred in rejecting certain functionally comparable companies, ie., Ecom Express Private Limited and Accord Global Express Private Limited, adopted by the Appellant for benchmarking the margin earned in its outbound segment. 3.5. The lower authorities erred

Portescap India Private Limited, Mumbai vs. DCIT Circle 2(3)(1), Mumbai

In the result the appeal filed by the assessee stands partly allowed

ITA 6749/MUM/2024[2021-22]Status: DisposedITAT Mumbai28 Jul 2025AY 2021-22

Bench: Smt. Beena Pillai () & Shri Girish Agrawal ()

Section 143(3)Section 153Section 92C(3)

rejecting the additional/ corroborative benchmarking undertaken by the Appellant, based on a systematic search process using the RoyaltyStat database, and thereby arbitrarily dismissing all comparable companies without providing any valid reasoning. 5. Ground No.5: TP adjustment for payment of marketing, support and procurement services to A&S Industry Technology (Tianjin ... margins earned by the assessee on year to year basis from assessment year 2015-16 onwards with rise in turnover, as compared to the comparable companies. The comparable margin as well as the increase in the turnover of the assessee in tabulated form scanned and reproduced as under

Signode India Limited, Hyderabad vs. ACIT., Circle 3(1), Hyderabad

In the result, appeal of the assessee is partly allowed for statistical

ITA 1376/HYD/2024[2021-22]Status: DisposedITAT Hyderabad25 Jul 2025AY 2021-22

Bench: Shri Vijay Pal Rao & Shri Madhusudan Sawdia

For Appellant: Shri H. Srinivasulu, C.AFor Respondent: Dr. Sachin Kumar, SR-DR

Section 143(3)Section 144BSection 144C(13)Section 153Section 92C(3)

separate adjustment on account of interest on receivables is not warranted. Further, the margins earned by the Appellant are much higher compared to the comparable companies. Considering that the credit period allowed is closely and inextricably linked to the main transaction of sales / services, the margins already reflect the working ... assessee has undertaken a working capital adjustment to reflect these differences by adjusting for differences in working capital and thereby, profitability of each comparable company. Accordingly, while calculating the working capital adjusted, operating margin on costs of the comparable companies, the impact of outstanding receivables on the profitability has been

ACIT - 14(2) (2), Mumbai vs. Pfizer Ltd, Mumbai

ITA 1497/MUM/2018[2005-06]Status: DisposedITAT Mumbai25 Jul 2025AY 2005-06

Bench: Smt. Kavitha Rajagopal (Jm) & Shri Omkareshwar Chidara (Am) Acit-14(2)(2) M/S. Pfizer Limited 461, 4Th Floor The Capital, 802/1901 Aayakar Bhavan Vs. Plot No. C-70, G Block M.K. Road Bandra Kurla Complex Mumbai-400 020. Bandra East, Mumbai 400 0051. Pan : Aaacp3334M Appellant Respondent

For Appellant: Shri Nihar Ranjan SamalFor Respondent: Shri Vishal Kalra

concerned, the Respondent company in its TP study, had characterized its activity as a provision of support services and identified 6 comparable companies which are engaged in the business of providing various business support/consultancy services and the Respondent company has computed the arm’s length margin ... stand in view of the fact that TPO vide his order dated October 31, 2008 himself applied the same set of 4 comparable companies used for benchmarking CSMM which were engaged in contract R&D services.(refer page 470 of the paper book). • In this regard, it is further submitted

Dell International Services India Private Limited, Bangalore, Karnataka vs. Deputy Commissioner of Income-Tax, Circle - 2(1)(1), Bangalore, Karnataka

In the result, appeal filed by the assessee is partly allowed for statistical purposes

ITA 1488/BANG/2024[2014-15]Status: DisposedITAT Bangalore24 Jul 2025AY 2014-15

Bench: Shri. Laxmi Prasad Sahu & Shri. Soundararajan Kit(Tp)A No.1488/Bang/2024 Assessment Year : 2014-15

For Appellant: Ms. Tanmaye Rajkumar, ARFor Respondent: Dr. Divya K. J, CIT(DR)(ITAT), Bangalore

Section 144C(13)Section 92C

length. The OP/OC was considered as the PLI. The data base was used was Prowess and Capitaline. The 5 companies selected as comparable companies and arithmetic mean were calculated at 11.75after applied certain filters as set out in the T.P. study and its written synopsis. However, the learned ... Tribunal. The learned Counsel reiterated the submissions made before the lower authorities and she has filed written synopsis for inclusion and exclusion of comparable companies as under : “The only issue which arises for consideration in the above appeal pertains to the Transfer pricing adjustment (“TP adjustment

M/S. Tbea Shenyang Trasformer Gropup Company Limited, Vadodara vs. The Deputy Commissioner of Income Tax, Int. Tax., Vadodara

In the result, the appeal filed by the assessee is dismissed

ITA 581/AHD/2017[2012-13]Status: DisposedITAT Ahmedabad22 Jul 2025AY 2012-13

Bench: Smt. Annapurna Gupta & Ms. Suchitra Kambleआयकर अपील सं./I.T.A. No. 581/Ahd/2017 (िनधा"रण वष" / Assessment Year : 2012-13) बनाम/ M/S. Tbea Shenyang Deputy Commissioner Of Transformer Group Income Tax Vs. Company Limited International Taxation, National Highway No.-8, Vadodara Villae : Miyagam, Karja, Vadodara, Gujarat - 390007 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aadct4557F (Appellant) .. (Respondent) अपीलाथ" ओर से /Appellant By : Shri Arpit Jain, Ar ""यथ" क" ओर से/Respondent By : Shri Mahesh Shah, Cit. Dr 24/04/2025 Date Of Hearing Date Of Pronouncement 22/07/2025 O R D E R Per Smt. Annapurna Gupta, Am:

For Appellant: Shri Arpit Jain, ARFor Respondent: Shri Mahesh Shah, CIT. DR

Section 143(3)Section 9Section 92C

have perused the above submission of the appellant company. The appellant has pointed out various shortcomings in -application of filter while selecting comparable companies and also emphasized that the comparable transactions selected by the AO for benchmarking the deemed international transactions for determining ALP are not comparable uncontrolled transactions ... information of the said comparables provided vide page nos 81 to 146 of the Paper Book. Further, I have perused the information about 10 comparable companies provided vide above referred submission dated 1st August, 2014. I have found that the comparables selected by the AO are not comparable in view

Daido India Pvt. Ltd., Gurgaon vs. DCIT, Circle- 1(1), Gurgaon

ITA 5761/DEL/2018[2014-15]Status: DisposedITAT Delhi21 Jul 2025AY 2014-15

Bench: Shri Ramit Kochar & Sh. Yogesh Kumar U.S.

Section 142(1)Section 143(2)Section 143(3)Section 271(1)(c)Section 92C

Associated Enterprises ('AEs) as the Tested Party without appreciating that the Assessee Company has substantiated the availability and reliability of financial data of overseas comparable companies, 1.2 Rejecting Cost Plus Method (CPM) and in the motu carrying out fresh search under TNMM Method 1.3 In carrying out comparability analysis under ... gross margin in Resale Price Method (RPM) comparable Uncontrolled Price (CUP) Method." 11. Further, even the Ld. DRP also mentioned that all the comparable companies selected by the TPO are into manufacture of 'noncore' auto parts. Number of years of operation has affected efficiency has not been brought

Spectraforce Technologies (India) Private Limited, Pune vs. ACIT, Circle 5, Pune

In the result, appeal of the assessee is partly allowed for statistical purposes as per terms indicated hereinabove

ITA 2853/PUN/2024[AY 2021-22]Status: DisposedITAT Pune18 Jul 2025

Bench: Dr.Manish Borad & Ms. Astha Chandra

For Appellant: Shri S. Raghunathan and Shri Abhiroop Bhargav KFor Respondent: Shri Prakash L. Pathade

Section 143(3)Section 92C(3)

grossly erred in denying the benefit of working capital to the Appellant by disregarding the differences in working capital between Appellant vis- à-vis comparable companies proposed by the Ld. TPO even though the Appellant claimed the same and which was objected by the Ld. TPO. 4. Considering the limitation ... came to 15.09% and the OP/TC of the assessee calculated by ld. TPO at 5.46% fall outside the Arm’s Length range of the comparable companied proposed by ld. TPO, therefore, Transfer Pricing adjustment of Rs.2,90,89,437/- was proposed to the total income of the assessee. With regard

Trumpf (India) Private Limited, Pune vs. Income Tax Officer, Ward 14(5), Pune

In the result, appeal of the assessee is dismissed

ITA 1448/PUN/2025[2010-11]Status: DisposedITAT Pune16 Jul 2025AY 2010-11

Bench: Ms.Astha Chandra & Dr.Dipak P. Ripoteआयकर अपील सं./Ita No.1448/Pun/2025 िनधा"रण वष" / Assessment Year: 2010-11 Trumpf (India) Private Limited, V The Income Tax Officer, Raisoni Industrial Park, S. Ward-14(5), Pune. S.No.276, Hissa No.1, Village Mann, Taluka – Mulshi, Pune – 411057. Maharashtra. Pan: Aacct8008J Appellant/ Assessee Respondent / Revenue Assessee By Shri Abdulkadir Jawadwala– Ar(Virtual) Revenue By Shri Akhilesh Srivastva – Addl.Cit(Dr) Date Of Hearing 10/07/2025 Date Of Pronouncement 16/07/2025 आदेश/ Order Per Dr. Dipak P. Ripote, Am: The Assessee Has Filed An Appeal Against The Order Of Ld.Addl./Joint Commissioner Of Income Tax (Appeal)-12, Delhi Passed Under Section 250 Of The Income Tax Act, 1961 Dated 25.03.2025 For A.Y.2010-11, Emanating From The Order U/S.143(3) Of The Act, Dated 03.11.2024. The Assessee Has Raised The Following Grounds Of Appeal :

Section 143(3)Section 234CSection 250Section 271

case in making an addition/disallowance of Rs. 1,45.95.659/- to the returned income of the Appellant. 2. Incorrect computation of margin of the comparable companies: The learned DCIT erred in law and on the facts and in circumstances of the case in considering incorrect operating margin of following comparable companies ... Asian Business Exhibition & Conferences Limited  ICRA Management Consulting Services Limited  India Tourism Development Corporation Limited 3. Erroneous rejection of comparable companies: The learned DCIT erred in law and on the facts and in circumstances of the case in rejecting Ma Foi Global Search Services Limited and Ma Foi Management Consultants

Ivy Software Development Services Private Limited, Hyderabad vs. DCIT, Circle -2(1), Hyderabad

In the result, the ground no

ITA 73/HYD/2022[2017-18]Status: DisposedITAT Hyderabad16 Jul 2025AY 2017-18

Bench: Shri Vijay Pal Rao & Shri Madhusudan Sawdia

For Appellant: Shri Nageswar Rao, AdvocateFor Respondent: Shri B. Bala Krishna, CIT-DR

Section 143(2)Section 143(3)Section 144C(5)

days. The Ld. AR submitted that, the allowability of credit period should be calculated on the basis of average of receivables of all the comparable companies considered for benchmarking of ALP and prayed accordingly. IT(TP)A No.73/Hyd/2022 23 18.3 Per contra, the Ld. DR relied on the order

Thermo Fisher Scientific India P. Ltd, Mumbai vs. DCIT 15(3)(1), Mumbai

In the result, the appeal by the assessee is partly allowed for statistical

ITA 2458/MUM/2015[2010-11]Status: DisposedITAT Mumbai16 Jul 2025AY 2010-11

Bench: Shri Vikram Singh Yadavshri Sandeep Singh Karhail

For Appellant: Shri Dhanesh Bafna, Shri Amol MahajanFor Respondent: Shri Ajay Chandra, CIT-DR

Section 143(3)Section 144CSection 144C(5)Section 32(1)

Bench of the Tribunal in M/s L.G. Electronics India Private Limited adopted the Bright Line Test (i.e., by considering the AMP/Sales ratio of the comparable companies), and concluded that the assessee is not being suitably compensated for the development of marketing intangible as the AMP/Sales ratio of the assessee ... compared to the average AMP/Sales margin of 4.63% of the comparable companies. The TPO further added the markup of 10.07% (being the arithmetic mean of OP/OC of the companies which are exclusively engaged in advertising and marketing services), and computed the ALP of the international transaction relating to AMP expenses

Jubilant Foodworks Ltd, Noida vs. ACIT, Circle, 5(1)(1)., Gautam Buddha Nager

In the result, appeal of the assessee is partly allowed for statistical purposes

ITA 2310/DEL/2022[2018-19]Status: DisposedITAT Delhi16 Jul 2025AY 2018-19

Bench: Shri Challa Nagendra Prasad & Shri Manish Agarwal

Section 143(2)Section 143(3)Section 144(1)Section 144CSection 144C(13)Section 144C(5)Section 924ASection 928Section 92CSection 92F

contentions stated in ground no. 5 supra, the impugned AMP adjustment is devoid of accuracy in as much as: 7. 6.1. The additional comparable companies proposed by the Appellant for computation of arm's length AMP/Sales, were rejected by misapplication of persistent losses filter. 6.2. The quantum of AMP adjustment

M/S Gujarat Guardian Ltd., New Delhi vs. DCIT, New Delhi

ITA 2539/DEL/2017[2005-06]Status: DisposedITAT Delhi16 Jul 2025AY 2005-06

Bench: Shri Prakash Chand Yadav & Shri Brajesh Kumar Singh

For Appellant: Shri Ajay Vohra, Sr. A.RFor Respondent: Shri Bhopal Singh, Sr. D.R

Section 92C

assessee has shown operating profit ratio of GGL at 27.26%, which as per assessee was higher than average of operating profit margin of 5 comparable companies at 6.77%, and hence it is contention of the assessee that the international transactions entered into by GGL are considered