The ITAT Bangalore has employed turnover and related party transaction (RPT) filters to exclude certain comparables, while still allowing a Section 10A deduction ahead of offsetting non-10A losses.
Utilization of Filters by ITAT Bangalore
The Bangalore ITAT has made a noteworthy judgment by applying both turnover and related-party transaction (RPT) filters to exclude certain high-turnover comparables from the transfer pricing analysis. This ruling is indicative of a growing focus on accurately aligning comparable entities with the subject taxpayer's operational context.
Additionally, the tribunal has authorized a Section 10A deduction, allowing it to be taken before accounting for non-10A losses. This aspect of the decision is particularly beneficial as it enhances the income derived from export units by providing a clear structure for applying deductions.
This decision outlines essential considerations for legal practitioners related to the application of filters in transfer pricing cases, emphasizing the tribunal's commitment to fairer assessments based on industry-specific nuances.
Citations
- ITAT Bangalore (2026)
