A ₹200-crore upper turnover filter may be applied when selecting transfer-pricing comparables.

For AY 2020–21, the Transfer Pricing Officer (TPO) made adjustments of ₹16,05,36,917, including an adjustment relating to the assessee’s software-development segment.

The assessee challenged the TPO’s selection of comparables, including entities with substantially higher turnover. The Income Tax Appellate Tribunal (ITAT) held that an upper turnover filter of ₹200 crore should be applied and excluded nine comparables.

The Revenue appealed under Section 260A of the Income-tax Act, 1961, challenging the Tribunal’s application of that filter.

Whether, in the circumstances of the case, the ITAT was right to apply an upper turnover filter of ₹200 crore when selecting comparables.

The appeal was brought under Section 260A of the Income-tax Act, 1961, which provides for appeals to the High Court on substantial questions of law.

The Court treated the question concerning the ₹200-crore upper turnover filter as covered in favour of the assessee by the Karnataka High Court’s co-ordinate Bench decision in Sap Labs India Private Limited v. Income Tax Officer, ITA No. 10/2011 and connected appeals, decided on 28 August 2026.

Although the Revenue’s memorandum raised several grounds concerning comparability criteria and the turnover filter, its counsel submitted that the question requiring consideration was whether the ITAT could apply an upper turnover filter of ₹200 crore.

The Court found that this question was covered in favour of the assessee by the co-ordinate Bench’s decision in Sap Labs and, on that basis, did not undertake a separate analysis of the Revenue’s other grounds.

It also condoned the delay in filing the appeal and allowed the related application.