TPO Cannot Compare Captive IT Service Provider With IP-Owning Risk-Bearing Companies: ITAT Mumbai

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 services), the l...