Case Law Analysis
|Income Tax Appellate Tribunal
Export incentives and cash discounts must be treated as operating revenue for TNMM analysis | Transfer Pricing (Sec 92C) : ITAT
The Delhi ITAT ruled that export incentives and cash discounts form part of a taxpayer’s operating revenue for the purpose of the Transactional Net Margin Method, requiring comparables to be selected on a fully adjusted basis. This clarifies the treatment of such items in transfer-pricing documentation and impacts exporters relying on TNMM benchmarks. Assessors must now ensure FAR-based comparables reflect these revenue components.