Indian High Court Holds Tax Authority May Not Discard Taxpayer's Adopted Transfer Pricing Method Without Explaining Why Other Method is More Appropriate

The Delhi High Court issued a judgment on 14 October 2024 concerning the tax authority's discarding of a taxpayer's chosen transfer pricing method. The case involved SABIC India Pvt. Ltd. (SABIC), a subsidiary of Saudi Arabian SABIC group that provides marketing support services in India and the subcontinent. SABIC adopted the transactional net margin method (TNMM) to benchmark its international transactions since the assessment year 2009-10. For the assessment year 2016-17, however, its tra…