#comparables selection

The Delhi ITAT partially upheld WSP Consultants’ appeal, directing the assessing officer to incorporate functional comparables and adjust working-capital for AY 2021-22, while striking out firms lacking comparable functions. This refines peer-selection under Rule 10B(2) for similar transfer-pricing cases.

ITAT Bangalore mandates turnover-based filters and netting of receivables/payables with the same Associated Enterprise (AE) in transfer pricing comparability analysis. The ruling reinforces the arm’s length principle by preventing artificial adjustments, impacting multinational enterprises and tax professionals in benchmarking international transactions.

ITAT holds that if revenue authorities previously accepted certain comparables in prior years, excluding them arbitrarily in subsequent years violates consistency and functional comparability principles under Section 92C.