Transfer Pricing-Assessee's Objections On 'Functional Dissimilarity' Not Adjudicated: Delhi HC Asks TPO To Determine Comparable Entity Afresh

The Delhi High Court directed the Transfer Pricing Officer (TPO) to re-evaluate the functional dissimilarity objections raised by an assessee in a transfer pricing case. The court found that the TPO had not adequately addressed the assessee’s objections regarding the comparability of entities used for benchmarking. The court emphasized the importance of a detailed and reasoned analysis in transfer pricing assessments to ensure fairness and accuracy. The case involved the determination of arm’s length pricing for international transactions, where the assessee argued that the selected comparables were not functionally similar to its operations. The court’s directive aims to ensure that transfer pricing assessments are conducted with due diligence and proper consideration of the assessee’s objections.