Case Law Details
In this view of the matter we set aside the issue of determining the transfer pricing in accordance with the directions in respect of specific comparables referred to above as well as taking into consideration the following:
(a) The companies which are functionally dissimilar unless segmental results in respect of comparable line of activity available.
(b) In case of comparable companies foreign exchange loss or gain have been taken into account in computing the profit, in the case of assessee also the foreign exchange gain or loss should be taken into account in determining the overall profit.
(c) All facts which impact the financial result of comparable companies should be taken into account and reasonable accurate adjustment should be made for the same. In this connection the rates of depreciation adopted by the assessee are significantly different from (straight line as compared with WTP; higher rate than that prescribed in schedule VI) those adopted by the comparable companies suitable adjustment for the different has to be made or the profit before depreciation may be considered.
(d) Companies having super normal profit may have to be examined further to determine the reason for the extra ordinary profits.
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