The Indian Income Tax Appellate Tribunal (ITAT), delivered a ruling dated 2 November 2007 in the case of Mentor Graphics v. Deputy Commissioner of Income Tax (unreported) on some basic and fundamental aspects of the transfer pricing legislation in India.
(a) Facts. The Taxpayer (i.e. Mentor Graphics) was a wholly owned subsidiary of a US entity, and it was engaged in the business of software development and rendering marketing systems services to its US parent c…