Similarity Of Functional Filters & Business Model Is Necessary For Including/ Excluding Comparable To Determine Arm's Length Price: Delhi HC

Product business similarity for Arm's Length Price (Delhi HC): The Delhi High Court ruled that product and business similarity is necessary for including or excluding comparables in determining the Arm's Length Price (ALP). This decision clarifies that only businesses with similar products and operating environments can be considered comparables for transfer pricing purposes. The ruling aims to ensure fairness and accuracy in transfer pricing assessments, preventing companies from manipulating prices to reduce tax liabilities. It reinforces the importance of rigorous and comparable analysis in determining ALP.