“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

Ayatna Realty Pvt. Ltd., New Delhi vs. ACIT, Circle-3(2), New Delhi

In the result, the appeal of the Assesse in ITA No

ITA 1294/DEL/2024[2011-12]Status: DisposedITAT Delhi07 Apr 2025AY 2011-12

Bench: Shri Vikas Awasthy & Shri Manish Agarwalm/S Wrigley India Private Dcit, Limited Circle-27(2), 206, Okhla Industrial Vs. New Delhi. Estate, Phase Iii, New Delhi-110020 Pan-Aaacw1789P (Appellant) (Respondent) Joint Cit (Osd), M/S Wrigley India Private Circle-27(2), Limited, New Delhi Vs. 206, Okhla Industrial Estate, Phase Iii, New Delhi-110020 Pan-Aaacw1789P (Appellant) (Respondent)

Section 250(6)Section 92CSection 92C(3)Section 92D

multiple year/ prior years' data used by the Appellant in the TP Study and holding that current year (i.e. FY 2012-13) data for comparable companies should be used despite the fact that the same was not necessarily available to the Appellant at the time of preparing its TP Study ... considered for making the comparison, the assessee gross margin is 54.59% whereas the median of the weighted average gross margin earned by the comparable companies proposed by the Ld. TPO after excluding International Bakery Products Limited is 35.28%, therefore, even otherwise the assessee has declared healthy gross margin and therefore

Deputy Commissioner of Income Tax, Nagpur vs. Avantha Holdings Limited, Chandrapur

ITA 354/NAG/2023[2012-13]Status: DisposedITAT Nagpur04 Apr 2025AY 2012-13

Bench: Shri V. Durga Rao & Shri K.M. Roy, Accountant, Member Avantha Holdings Ltd. Ballarpur Paper Mills S.O. Ballarpur 442 901 Pan – Aabcb6134E

For Appellant: Shri Kishore P. DewaniFor Respondent: Shri Sandipkumar Salunke

Section 251

determined by the AO at 1.2% per annum. The TPO has assessed Corporate Guarantee Fee of 1.2% after thorough scrutiny of transactions of various comparable companies applying the best International practices. 4. Any other grounds which may be raised during appellate proceedings.” 3. In this appeal, the Revenue has raised

Avantha Holdings Limited, New Delhi vs. A.C.I.T. Cir-5, Nagpur

ITA 45/NAG/2016[2011-12]Status: DisposedITAT Nagpur04 Apr 2025AY 2011-12

Bench: Shri V. Durga Rao & Shri K.M. Roy, Accountant, Member Avantha Holdings Ltd. Ballarpur Paper Mills S.O. Ballarpur 442 901 Pan – Aabcb6134E Appellant Dy. Commissioner Of Income Tax Circle-4, Nagpur Respondent V/S

For Appellant: Shri Kishore P. DewaniFor Respondent: Shri Sandipkumar Salunke

Section 251

Dy. C.I.T. Cir-.5, Nagpur vs. M/S Avantha Holdings Ltd., Chandrapur

ITA 248/NAG/2016[2011-12]Status: DisposedITAT Nagpur04 Apr 2025AY 2011-12

Bench: Shri V. Durga Rao & Shri K.M. Roy, Accountant, Member Avantha Holdings Ltd. Ballarpur Paper Mills S.O. Ballarpur 442 901 Pan – Aabcb6134E Appellant

For Appellant: Shri Kishore P. DewaniFor Respondent: Shri Sandipkumar Salunke

Section 251

Ras Lifesciences Private Limited, New Delhi vs. DCIT., Circle 3(1), Hyderabad

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

ITA 788/HYD/2024[2020-21]Status: DisposedITAT Hyderabad04 Apr 2025AY 2020-21

Bench: Shri Vijay Pal Rao & Shri Madhusudan Sawdia

For Appellant: Shri Vishal Kalra, AdvocateFor Respondent: : Smt. M. Narmada, CIT-DR

Section 143(3)Section 92C(3)

sale of goods, i.e., not granting proportionate adjustment. 5. Without prejudice to the above grounds, the AO / DRP / TPO have erred in arbitrarily including comparable companies which have dissimilar FAR, namely, Biosite Research Pvt. Ltd., Jeevan Scientific Technology Ltd., Actimus Biosciences Pvt. Ltd., APL Institute of Clinical Laboratory & Research Private ... India Pvt. Ltd. and Ross Lifescience Ltd. 6. Without prejudice to the above grounds, the AO/ DRP/TPO have erred in arbitrarily rejecting additional functionally comparable companies identified and filed before the DRP without passing a speaking order. 7. Without prejudice to the above grounds, the AO / DRP / TPO have erred

Assistant Commissioner of Income Tax, Haldwani vs. Delta Power Solutions (India) Pvt. Ltd., (Now), Delta Electronics India Pvt. Ltd., Gurgaon

Accordingly. This Revenue’s appeal ITA Nos. 5543/Del/2018 is partly allowed for statistical purposes

ITA 3/DDN/2024[2013-14]Status: DisposedITAT Dehradun02 Apr 2025AY 2013-14

Bench: Shri Satbeer Singh Godara & Shri M. Balaganeshassessment Year: 2013-14 Vs. M/S. Dcit, Delta Power Solution Circle-1, (India) Pvt. Ltd., Haldwani Plot No. 38, Phase-1, Sector-5, Iie, Pantnagar, Rudrapur, Distt. Us Nagar, Udham Singh Nagar, Uttarakhand Pan: Aaccd5896N (Appellant) (Respondent) With C.O. No. 38/Del/2019 [Arise Out Of Ita No.5543/Del/2018] Assessment Year: 2013-14 Vs. Dcit, Delta Power Solution (India) Pvt. Ltd., Circle-1, Plot No. 38, Phase-1, Sector- Haldwani 5, Iie, Pantnagar, Rudrapur, Distt. Us Nagar, Udham Singh Nagar, Uttarakhand Pan: Aaccd5896N (Appellant) (Respondent) With Assessment Year: 2013-14 Vs. Delta Power Solution (India) Acit, Haldwani Pvt. Ltd. (Now, Delta Electronics India Pvt. Ltd.) Plot No. 43, Sector-35, Hsiidc, Gurgaon Pan: Aaccd5896N (Appellant) (Respondent)

Section 143(3)

files perused. The Revenue’s main appeal ITA No.5543/Del/2018 raises the following grounds: 1. Whether the Ld. CIT(A) was justified in rejecting the comparable companies selected by the Ld. TPO on the basis of functional differences ignoring the findings ... Nos.5543/Del/2018; 3/DDN/2024 & C.O. No.38/Del/2019 2. Whether the Ld. CIT(A) was justified in rejecting the comparable companies having relatively higher margins. 3. Whether the Ld. CIT(A) was justified in rejecting M/s Crompton Greaves Ltd. As a comparable on the basis of existence of an event of amalgamation which cannot

DCIT, Circle-1, Haldwani vs. Delta Power Solution India Pvt. Ltd., U S Nagar

Accordingly. This Revenue’s appeal ITA Nos. 5543/Del/2018 is partly allowed for statistical purposes

ITA 5543/DEL/2018[2013-14]Status: HeardITAT Dehradun02 Apr 2025AY 2013-14

Section 143(3)

Kgk Creations Private Limited, Mumbai vs. Circle 2(2)(1), Mumbai

In the result, ground No. 9 to 13 are allowed

ITA 6854/MUM/2024[2021-2022]Status: DisposedITAT Mumbai28 Mar 2025AY 2021-2022

Bench: Shri Pawan Singh & Shri Girish Agrawalkgk Creations Private Limited Jurisdiction Assessing Officer Gj-10, Seepz Sez, Seepz S.O. Vs. (Jao) Mumbai 400096, Circle 2(2)(1), Mumbai Aayakar Pan No. Aabck0378H Bhawan, Mumbai Appellant/ Assessee Respondent/ Revenue Assessee Represented By Shri Vijay Mehta Ca / Ar Department Represented By Shri Kiran Unavekar Sr. Dr. Date Of Hearing 17/03/2025 Date Of Pronouncement 28/03/2025

Section 143(3)Section 144BSection 144C(13)Section 254(1)

Reversal of Gratuity Provision - INR 82,90,502 4. The learned AO / TPO erred in facts and in law by rejecting the following comparable company accepted by the Assessee, by incorrectly stating that the company fails Related Party Transaction Filter of 25%, and subsequently erred in facts ... Everest Gold Mart Pvt. Ltd. f. Starlineps Enterprises Ltd. 5. The learned AO / TPO erred in facts and in law by rejecting the following comparable companies selected by the Assessee on ground that they are functionally not comparable to the Assessee and subsequently erred in facts

Fincantieri Spa, Noida vs. ACIT It Circle 2(3) (1), Mumbai

In the result, appeal of the assessee is allowed

ITA 3313/MUM/2023[2020-21]Status: DisposedITAT Mumbai28 Mar 2025AY 2020-21

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI VIKRAM SINGH YADAV (Accountant Member)

Section 115ASection 143(3)Section 44D

Since the operating margin by the PO was 19.36% which was higher than the arm’s length range of the margins of the comparable companies, the international transaction pertaining to provision of technical consultancy services between PO and HO has been stated to be at arm’s length

Purpletalk India Private Limited, Hyderabad vs. Deputy Commissioner of Income Tax, Circle-9(1), Hyderabad

In the result, appeal of the assessee is partly

ITA 193/HYD/2021[2016-17]Status: DisposedITAT Hyderabad27 Mar 2025AY 2016-17

Bench: Shri Vijay Pal Rao & Shri Manjunatha G

For Appellant: CA PVSS PrasadFor Respondent: Shri B Bala Krishna, CIT-DR

Section 143(3)Section 2(24)(x)Section 234ASection 37(1)Section 92C

respect of the following aspects a. Excluding Kals Information Systems Private Limited and Cigniti Technologies Limited from the final list of comparable companies. b. Modifying the final list of comparable companies without applying positive net worth filter. 13. The Ld TPO, while including the Companies as comparables has erred ... assessee-company has selected some inappropriate filters which are not relevant for selecting comparables. Further on account of adopting inappropriate filters, certain functionally comparable companies have been eliminated. The DRP after considering relevant facts has rightly upheld the reasons given by the TPO for rejection of TP study and fresh

Rajasthan Prime Steel Processing Center Pvt. Ltd., Alwar vs. DCIT, Circle- 15(1), New Delhi

Accordingly, the grounds relevant to this issue raised by the Revenue stand dismissed in both years

ITA 3293/DEL/2018[2010-11]Status: DisposedITAT Delhi27 Mar 2025AY 2010-11

Bench: Shri Vikas Awasthy & Shri Avdhesh Kumar Mishra

Section 271(1)(c)

from operating margin. The Ld. Counsel submitted that the assessee had incurred significant customs duty charges which were proportionately greater than that of the comparable companies leading to a lower profitability for the assessee. To meet the quality standards and to overcome technological challenges, the assessee imports raw materials from ... No.3537 & 3538/Del/2018 15. The other way of looking at the present situation is to accept that business model of the assessee company and the comparable companies are the same and it is on account of initial stages of business that the unusually high costs are incurred. The adjustments are thus

Centrient Pharmaceuticals India Private Limited, Punjab vs. DCIT/ ACIT, Circle 1(1), Chandigarh

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

ITA 1201/CHANDI/2024[AY 2021-22]Status: DisposedITAT Chandigarh26 Mar 2025

Bench: Shri Rajpal Yadav & Shri Krinwant Sahayआयकर अपील सं./ I.T.A. No. 1201/Chd/2024 "नधा"रण वष" / Assessment Year: 2021-22

For Appellant: Sh. Darpan Kirpalani, AdvocateFor Respondent: Sh. Rohit Shrma, CIT, D.R. (Virtual)

Section 143(3)Section 144Section 144CSection 144C(10)Section 153(1)Section 253(1)(d)

economic analysis undertaken by the Assessee. Trading Segment Ground 4: The Ld. TPO/AO have erred, in law and in facts, by rejecting the comparable companies identified by the Assessee as comparable in the TP documentation for trading of finished goods. Ground 5: The Ld. TPO/AO have erred ... Assessee in the trading segment. IT Enabled Services Ground 7: The Ld. TPO/AO have erred, in law and in facts, by rejecting the comparable companies identified by the Assessee as comparable in the TP documentation for benchmarking IT enabled services. Ground B. The Ld. TPOIAO have erred

Cvent India Pvt. Ltd., Gurgaon vs. ACIT, New Delhi

In the result, the appeals of the assessee in both the A

ITA 187/DEL/2016[2011-12]Status: DisposedITAT Delhi26 Mar 2025AY 2011-12

Bench: Shri Mahavir Singh & Shri Naveen Chandra

For Appellant: Shri Himanshu Sinha, AdvFor Respondent: ShriDheeraj Kumar Jaiswal, Sr. DR

Section 92CSection 92D

Income-tax Rules, 1962 ('Rules') as well as fresh search. 4.2 The Ld. AO/ Ld. TPO/ Ld. CIT(A) erred in rejecting the comparable companies adopted by the Assessee on the basis of additional/ modified quantitative filters selected by the Ld. TPO and arbitrary statements that lacked valid and sufficient ... most appropriate method and benchmarked the international transactions using operating profit/operating cost ("OP/OC") as the profit level indicator ("PLI").The assessee selected 35 comparable companies in its transfer pricing ("TP") documentation and arrived at an ITA No. 2374/DEL/2012 [A.Y. 2010-11] Cvent India Pvt LtdVs. The I.T.O arithmetic mean

Liquidhub Analytics Pvt. Ltd. (Now Merged With Capgemini Technology Services India Ltd), Pune vs. NFAC, Pune

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

ITA 1952/PUN/2024[2020-21]Status: DisposedITAT Pune25 Mar 2025AY 2020-21

Bench: Shri R. K. Panda & Shri Vinay Bhamoreassessment Year : 2020-21

For Appellant: Shri Nikhil PathakFor Respondent: Smt Nilu Jaggi, CIT

Section 143Section 143(3)Section 144C(1)

considering foreign exchange fluctuations during the year as non-operating in nature while computing the operating margin of the Appellant and comparable companies, further erred in placing reliance on safe harbour provisions under Rule 10TA of the Rules and which are deeming provisions and have not been exercised ... Appellant. 5.3 rejecting the TP study of Appellant and conducting fresh search for comparable companies 5 5.4 rejecting the transaction-by-transaction approach adopted by the Appellant to benchmark the International transactions with AEs in the TP study and instead tested the entity level net margin of the Appellant using

Gallagher Service Center LLP (Formerly Known As Gallagher Operations Support Services P Ltd), Pune vs. Assistant Commissioner of Income-Tax, NFAC, Delhi

In the result, the Ground Number 6 is Partly Allowed for Statistical purpose

ITA 679/PUN/2022[2018-19]Status: DisposedITAT Pune24 Mar 2025AY 2018-19

Bench: Dr.Dipak P. Ripote & Shri Vinay Bhamoreआयकर अपील सं. / Ita No.679/Pun/2022 िनधा"रण वष" / Assessment Year : 2018-19 Gallagher Services Center V Additional/Joint Llp, S Commissioner Of Income 401, Delta 2, Gigaspace It Tax. Park, Vimannagar, Pune – 411014. Pan: Aaqfg7417F Appellant/ Assessee Respondent /Revenue Assessee By Shri M.P.Lohia – Ar Revenue By Shri Prakash L Pathade – Cit(Dr) Date Of Hearing 23/01/2025 Date Of Pronouncement 24/03/2025 आदेश/ Order Per Dr.Dipak P.Ripote, Am : This Is An Appeal Filed By The Assessee Against The Assessment Order Of Passed Under Section 143(3) R.W.S 144C(3) Read With Section 144B Of The Income Tax Act, 1961; Dated 15.07.2022 For A.Y.2018-19. The Assessee Has Raised The Following Grounds Of Appeal : “Based On The Facts & Circumstances Of The Case, The Appellant Respectfully Craves Leave To Prefer An Appeal Under Section 253(1)(D)

Section 143(3)Section 144Section 144BSection 253(1)(d)

comparable to the business support services provided by the Appellant and hence, should not be considered while computing the operating margins of comparable companies for arriving at the arm's length price. Informed Technologies India Limited Adhaan Solutions Private Limited Sundaram Business Services Limited MCI Management (India) Private Limited Suprawin ... following companies are comparable to the business support services provided by the Appellant and hence, should be considered while computing the operating margins of comparable companies for arriving at arm's length price Tech Mahindra Business Services Limited Manipal Digital Systems Private Limited CES Limited MPS Limited Integra Software Services

Standard and Poors South Asia Services Private Limited, New Delhi vs. ACIT, New Delhi

In the result, appeal filed by the assessee is allowed

ITA 3792/DEL/2024[2020-21]Status: DisposedITAT Delhi21 Mar 2025AY 2020-21

Bench: SHRI S.RIFAUR RAHMAN (Accountant Member), SHRI VIMAL KUMAR (Judicial Member)

For Appellant: Ms. Ananya Kapoor, AdvocateFor Respondent: Shri S.K. Jhadav, CIT DR

Section 143(3)Section 144Section 144C(13)Section 234BSection 928Section 92C

outstanding balances; 1.7. Not appreciating the fact that the even if interest needs to be charged on the receivables, the average receivable days of comparable companies selected by the learned DRP/ TPO for main service transactions, should be considered to establish arm's length interest; 1.8. Granting the credit period ... days and therefore no adjustment should be sustained in this case as even our average is much lesser than the average of the comparable companies.  It is also submitted that while there is no standard methodology to determine industry practice for credit period, the same is always dependent

Knauf India Pvt Ltd (Earlier Know As Usg Boral Building Products (India) Pvt Ltd), Gurgaon vs. ITO, Ward-14(3), New Delhi

In the result, the appeal filed by the assessee being ITA

ITA 2061/DEL/2022[2018-19]Status: DisposedITAT Delhi21 Mar 2025AY 2018-19

Bench: Shri S.Rifaur Rahman & Shri Vimal Kumar

For Appellant: Shri Ajit Kumar Jain, CAFor Respondent: Shri S.K. Jhadav, CIT DR

Section 144Section 37Section 92CSection 92C(3)Section 92D

satisfied in the present case. 7.2. contravened section 92C of the Act read with Rule IOB(2) of the Rules, by rejecting/ excluding the comparable companies selected by the Appellant in the economic analysis undertaken in the TP documentation which was prepared and maintained in compliance with section ... observation that it is based on management accounts instead of audited financial statements and only two years data was taken in respect of comparable companies instead of three years data. He also observed that he proposes to adopt no margin on sales at the PLI against GP/Sales taken

Knauf India Pvt Ltd (Earlier Know As Usg Boral Building Products (India) Pvt Ltd), Haryana vs. ITO, Ward 14 (3), New Delhi

In the result, the appeal filed by the assessee being ITA

ITA 2060/DEL/2022[2017-18]Status: DisposedITAT Delhi21 Mar 2025AY 2017-18

Bench: Shri S.Rifaur Rahman & Shri Vimal Kumar

For Appellant: Shri Ajit Kumar Jain, CAFor Respondent: Shri S.K. Jhadav, CIT DR

Section 144Section 37Section 92CSection 92C(3)Section 92D

Ych Logistics India Private Limited, Kanchipuram, Tamilnadu vs. Assistant Commissioner of Income Tax, Corporate Circle -3(2), Chennai

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

ITA 1330/CHNY/2023[2012-13]Status: DisposedITAT Chennai19 Mar 2025AY 2012-13

Bench: Shri George George K, Hon’Ble & Shri S.R. Raghunatha, Hon’Bleआयकरअपीलसं./Ita No.: 1330/Chny/2023 िनधा"रणवष" / Assessment Year: 2012-13 Ych Logistics India Private Ltd., Assistant Commissioner Of Plot D V 1, Hi-Tech Sez Phase Ii, V. Income Tax, Sirumangadu Village, Sriperumbudur Corporate Circle -3(2), Taluk, Tamil Nadu 602 105. Chennai. [Pan: Aaacy-2873-L] (अपीलाथ"/Appellant) (""यथ"/Respondent)

For Appellant: Shri. Ajit Kumar Jain, CA by VirtualFor Respondent: Shri. A. Sasikumar, CIT

Section 10ASection 250Section 92C(3)Section 92D

profits, the assessee has considered TNMM as the most appropriate method and the PLI of the assessee is higher than that of the comparable companies. In the case of Durr India (P) Ltd in ITA. No. 754/Mds/2014 dated 21.12.2016, the co-ordinate Bench of Tribunal has held that allocation

Reckitt Benckiser India Private Limited, Gurgaon, Haryana vs. D.C.I.T., Circle 11.1, Kolkata

ITA 2319/KOL/2024[2021-2022]Status: DisposedITAT Kolkata18 Mar 2025AY 2021-2022

Bench: Shri Rajesh Kumar & Shri Sonjoy Sarma

For Respondent: Shri Deepak Chopra, AR & Shri Rohan Khare, AR

Section 143(3)Section 144C(13)Section 144C(5)Section 92BSection 92C

circumstances of the case, the AO/TPO/DRP have erred in ignoring reasons furnished by the appellant with respect to selection of appropriate set of comparable companies in light of detailed analysis of comparability factors and matching FAR profile. Further, the DRP has erred in upholding certain comparable companies selected ... facts and in the circumstances of the case, TPO/DRP/AO erred in not appreciating the specific objections raised by the appellant against the set of comparable companies chosen by the TPO. 5(d) Whether on the facts and in the circumstances of the case, DRP has erred in upholding the order