Transfer Pricing – Arm’s length price under TNMM can be determined even with one comparable company

The Delhi bench of the Income-tax Appellate Tribunal [“The Tribunal”] recently pronounced its ruling in the case of Haworth (India) Private Limited Vs. DCIT [ITA NO. 5341/DEL/2010], wherein it upheld Revenue’s contention that arm’s length price can be determined under transactional net margin method [“TNMM”] even with one comparable company. Besides, the decision also deals with several other important aspects of the manner of application of TNMM, viz. method of making adjustments to the results, use of current year data, benefit of +/- 5% range and functional comparability. Facts ...