Functionally dissimilar entities not includible as comparable for benchmarking international transactions

PCIT Vs Freescale Semiconductor India Pvt Ltd (Delhi High Court) Delhi High Court held that functionally dissimilar entities cannot be included as a comparable entity for benchmarking the Arm’s Length Price (ALP) of the international transactions. Accordingly, appeal of the revenue dismissed. Facts- The assessee had furnished its transfer pricing study before the Transfer Pricing Officer (TPO) to establish that its international transactions were on ALP. The assessee had adopted Transactional Net Margin Method (TNMM) as the most appropriate method and Operating Profit/ Operating Cost [OP/OC]...