Case Law Details
Facebook India Online Services Private Limited Vs DCIT (ITAT Hyderabad)
ITAT Hyderabad held that for comparability of company with that of the assessee, in case of international transactions, the criteria of functionally comparability needs to be considered.
Facts-
During the year the assessee has entered into various international transactions with its AE. After going through TP documents of the assessee, TPO had rejected the TP study of assessee and had given show cause notice to the assessee dated 20.10.2017 as he had found that transactions were not at arm’s length. Thereafter, Transfer Pricing Officer (TPO) carried out a fresh search for appropriate comparable companies and also applied additional/modified filters for the selection of comparable companies.
After perusal of reply of assessee company and after applying margins of the comparables to the financials, arm’s length price at Rs.109,47,51,113/- and the shortfall of Rs.11,81,52,927/- was treated as adjustment u/s 92CA of the Act and the total income was enhanced as per 92CA(3) of the Act.
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