The ITAT Hyderabad has excluded six comparables from the transfer pricing analysis due to significant turnover and functional differences. The tribunal also mandated a remanded computation of profit margins alongside a standardized 90-day credit period for receivables adjustment.
Exclusion of Comparables by ITAT Hyderabad
The Income Tax Appellate Tribunal (ITAT) in Hyderabad has ruled to exclude six transfer pricing comparables in the matter concerning Infor India, citing substantial differences in turnover and functional operations that affect the comparability analysis. The tribunal has remanded the matter to the assessing officer for recalculating the profit margins while adhering to the guidelines for industry-standard practices in receivables adjustments.
This decision aligns with the principles set out under the Income Tax Act pertaining to fair transfer pricing practices. Notably, the ITAT directed that the credit period allowed for receivables must not exceed 90 days, reflecting consideration of practical industry norms.
This ruling serves as a crucial guidance for taxpayers in the technology sector regarding the selection of appropriate comparables under transfer pricing regulations.
Citations
- Infor India (2026) ITAT Hyderabad
