Nearly superprofits/ losses cannot be criterion for rejecting a comparable; circumstances for using multiple year data explained

 

Recently, the Delhi High Court in its verdict in the case of Chryscapital Investment Advisors (India) Private Limited emphasised functional analysis as the key comparability criteria, and inter-alia held that:

• merely earning high profits/ losses could not be a reason to exclude a company as a comparable; and
• for the purpose of comparability analysis, data of multiple years could be used only when such data has an influence on the transfer price of the transaction under consideration.