SC Ruling in SAP Labs Case - Significance and Implications
The Hon’ble Apex Court in its order dated 19th April 2023, in the case of SAP Labs India Pvt Ltd. quashed and set aside the ruling of the High Court (‘HC’) and observed that selection of comparables, application of filters etc. gives rise to substantial question of law and thereby remitted back the case to the HC to decide the matter afresh. Civil Appeals were preferred by the Revenue and few of the taxpayers arising out of the orders passed by various HC more particularly the HC of Karnataka in the case of SAP Labs India Pvt. Ltd.
In this context it is pivotal to understand what the substantial question of law means and its interplay with Transfer Pricing principles.
