Dissimilar comparables in Transfer Pricing Owing to Intangibles as Goodwill and Product Development Costs: Delhi HC upholds Exclusion

The Delhi High Court upheld the exclusion of dissimilar comparables in transfer pricing assessments due to the impact of intangibles, such as goodwill and product development costs. The court ruled that the presence of significant intangible assets in a company can distort the comparability analysis for transfer pricing purposes. The ruling reinforces the idea that companies with substantial intangible assets, such as patents or trademarks, should not be compared to businesses that lack these assets when determining arm’s length pricing.