Taxpayer’s functional profile and place in the value chain can be a key determinant of the parameters of economic analysis

z ITAT Delhi has recently pronounced its ruling in the case of ST Microelectronics Private Limited Vs. CIT(A), wherein it upheld the revenue’s rejection of transfer pricing analysis undertaken by the taxpayer since the taxpayer had improperly characterized itself as a low-risk software service provider and accordingly, selected wrong com parables for the transfer pricing analysis. Besides, the decision also reiterates that it is a mandatory requirement of Rule 10B(4) of the Income-tax Rules 1962 [“the Rules”] to use current year data for comparability analysis. Facts The taxpayer is a su...