« Top Headlines » Open DEMAT Account in 24 hrs  New Income Tax Act: ITR forms to be issued prior to FY28, says govt  GSTR-9C Explained: Turnover Limit, Due Date, Statement Format & How to Prepare It in Tally Prime (2025 Update)  Will Income Tax Department release new ITR forms by January 2026? Finance Ministry says this  The Government of India has strengthened MSME protection through strict payment rules, ensuring that Micro & Small Enterprises receive timely payments from buyers. Under the MSME Development Act (MSMED Act), 2006, buyers must make payments within:  ITR Refund Delays in India: Why They Happen & How to FastTrack Your Refund in 2025  ITR Refund Delay: From Bank Errors To Department Checks, 5 Big Reasons Your Refund Gets Stuck  Income Tax Slabs 2025: New Vs Old Regime; Which One Is Better For You For FY2025-26?  Seamless Integration: How Tally Prime Connects Businesses to the Digital Economy  Govt to notify new ITR forms, Income Tax Act 2025 rules by January 2026: CBDT chief  Digital Efficiency for MSMEs: The Tally Prime Advantage  5 Ways Tally Prime Reduces Cost and Boosts Productivity for Startups «  Tax norms for foreign service providers still confusing... Tax-saving is a year-long business... » ITAT mathematics: Transfer pricing is no science November, 06th 2007 The Income-Tax Appellate Tribunal has held that transfer pricing is not an exact science in which mathematical certainty is possible and some approximations cannot be ruled out. The case relates to transfer pricing of captive software development services rendered by an Indian subsidiary Mentor Graphics to its US-based overseas parent. Mentor Graphics had carried out a detailed transfer pricing analysis and documentation choosing a set of comparables, which was rejected by the first level audit officer and the latters decision upheld by the commissioner (appeals). The tribunal, however, did not approve of the order of the transfer pricing officer and deleted the adjustment to the taxpayers income made by him, upholding the transfer price paid the taxpayer. The primary issue in the case was the choice of appropriate comparables for benchmarking or comparing the profits of the Indian entity, in order to evaluate the adequacy of the transfer prices between the Indian entity and its overseas parent. The tribunal contended that transfer pricing is not an exact science in which mathematical certainty is possible. It needs to be prima facie shown that the transaction was properly examined, comparable prices were objectively fixed, in a bona-fide, honest manner as required by law. Transfer pricing provisions primarily require any income arising from an international transaction between two or more associated enterprises to be at arms length price and comparable to similar transactions between unrelated enterprises. A proper study of all the specific characteristics of the transaction needs to be undertaken, including analysis of functions, assets and risks taking into account economically significant activities and responsibilities of the enterprises, it ruled, saying that a mere broad comparison was not sufficient enough. This landmark ruling is a step in the right direction, as it focuses on economic issues and recognises commercial realities of businesses, which are the key in any transfer pricing analysis. Further, the ruling gives a direction to transfer pricing officer that once taxpayers undertake appropriate due diligence, their analysis cannot be arbitrarily rejected during audits based on inferences and presumptions, said PwC executive director Shyamal Mukherjee.