Case Law Details
Brief of the case:
ITAT held in Acclaris Business Solutions Lvt Ltd. Vs I.T.O that only those companies could be compared for calculating ALP which were functionally similar. Those companies which were not performing similar functions could not be compared for calculating ALP. If the companies were having different functional lines then their profit margins could not be compared.
Specific reasons should be there to exclude the high profit margin company from the list of comparables.
Moreover there was not mentioned in the income tax act that the companies with high profit margin could not be compared with other company under question for calculating ALP. Company with high profit margin could only be excluded from the list of comparable only and only if there was sufficient evidence to the fact that that company belongs to different functional line or any other thing which distinct the comparable company from the company under question.
Facts of the case:
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