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TPO Cannot Compare Captive IT Service Provider With IP-Owning Risk-Bearing Companies: ITAT Mumbai
Case Law Details
- Case Name
- Franklin Templeton International Services (India) P. Ltd. Vs DCIT CIR 3(1) (ITAT Mumbai)
- Appeal Number
- Only available for paid members
- Date of Judgement/Order
- Only available for paid members
- Related Assessment Year
- 2009-10
- Courts
- All ITAT, ITAT Mumbai
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Franklin Templeton International Services (India) P. Ltd. Vs DCIT CIR 3(1) (ITAT Mumbai)
Functionally dissimilar entities, entrepreneurs, and product developers were invalid comparables for captive IT service providers
Conclusion: Transfer pricing principles dictate that a captive, risk-mitigated service provider could not be benchmarked against full-fledged, risk-bearing entrepreneurs, companies owning substantial intellectual property, or those generating revenue through software products. If a comparable was engaged in multiple verticals (like software products and software...
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