Summary
- The Karnataka High Court has upheld a ₹200 crore turnover filter for transfer pricing comparables, affirming the Tribunal's exclusion of high-turnover companies in the software sector.
- This ruling builds on the precedent set in SAP Labs India, emphasizing that factors like turnover and brand value significantly impact comparability.
- The Revenue's argument against using size as a criterion was rejected, reinforcing the importance of functional dissimilarity in comparable selection.
- This decision could reshape how software companies approach transfer pricing assessments, highlighting the need for careful consideration of scale and profitability factors.
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