![]() Whether the ITAT was correct to apply a 15% “related party filter” in selecting comparable companies?.Whether the ITAT was correct to reject four named companies as comparable companies for TNMM analysis purposes?.In the current case before the court, the appeal by the Indian tax authorities centred on the following issues: To clear the backlog of cases that had accumulated, a special tax bench was established within the court. While the ITAT has been asked to rule in hundreds of transfer pricing cases and despite India’s transfer pricing legislation being in force for about 15 years, the Karnataka High Court has not issued a significant ruling on transfer pricing appeals. The ITAT is the final fact finding court for tax cases and a high court can hear appeals against the ITAT rulings only if the appeal relates to a “substantial question of law.” Unless the court holds that the ITAT’s finding on fact is “perverse,” the court must respect the finding as final.īangalore (often known as India’s “Silicon Valley”) has witnessed a significant number of transfer pricing disputes, largely relating to the information technology sector. The high courts sit below the Supreme Court and hear appeals from the Income Tax Appellate Tribunal (ITAT). Background: The highest tax court in India is the Supreme Court.
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