Safe Harbour Rules under Section 92CB of IT Act Finalized
Safe Harbour Rules Finalized after Considering Comments of Various Stake Holders ; Rules to be Applicable for 5 Assessment Years Beginning from Assessment Year 2013-14 Section 92CB of the Income-tax Act provides for framing of safe harbour rules. The determination of arms length price u/s 92C or 92CA of the Act is subject to these… Read More
Tags: Business process outsourcing, KPO, National Football League Draft, Order of Australia, Press Release, Tax, Taxation in India, TPO
Transfer Pricing Laws applicable to ITES/ BPO Sector explained by ITAT
CLR Editorial Notes: The assessee, in this Transfer Pricing related case, had raised three contentious issues in support of the contention that its charges were at Arms Length: (i) that the assessee was engaged in the low end activity of voice based call centre and that the comparables chosen by the Tranfer Pricing Officer in… Read More
Tags: ALP, Commonwealth Law Reports, India, OECD, Organisation for Economic Co-operation and Development, TPO
Profit Level Indicator – All Related transactions cannot be considered for determining ALP
CLR Editorial Notes: In this particular case, the assessee™s parent company, Digital Microwave Corporation USA, had supplied an equipment to its Indian customers for which the assessee received a decided commission. The equipment was covered by warranty and the service relating to its installation and annual maintenance was provided by the assessee in India. It is annual… Read More
Tags: Australian Labor Party, CIT, Commonwealth Law Reports, Comparables, India, TPO, transfer pricing, United States
Turnover filter & comparisons – Important principles explained
CLR Editorial Notes: The Tribunal had to consider the following important transfer pricing issues: (i) whether a one-time and extraordinary item of expenditure (ESOP cost) debited to the assessee™s P&L A/c has to be excluded while comparing the margins, (ii) whether for the purpose of comparison of margins, the consolidated results of comparables having profit… Read More
Tags: American Express, Comparables, Infosys, OECD, Pune, TPO, transfer pricing
Proof of Tangible/direct benefits from international transactions needed for determination of ALP
CLR Editorial Notes: This case bears reference to an appeal filed by the concerned assessee against an order passed by the Assessing officer. The assessee-company is engaged in the business of manufacturing, designing, engineering and supply of cooling towers, spares and providing engineering services. The assessee entered into several international transactions with its Associated Enterprises… Read More
Tags: ALP, Business, DRP, Finance Act, TPO, transfer pricing
ALP has to be the Arithmetic mean of all prices arrived through various methods
Ratio of the Case: If more than one price is determined by the most appropriate method, the ALP has to be the arithmetical mean of such prices CLR Editorial Notes: The assessee was engaged in providing software development support services by which it developed software upon the instructions of its parent associated enterprise (IKOS Systems Inc).… Read More
Tags: ALP, Arm's length principle, ITAT, Organisation for Economic Co-operation and Development, TPO, Tribunal
The TPO can select any method to determine actual income
Ratio of the Case: In order to determine the true income of an Assessee in a transaction concerned with its Parent in another country, the Transfer Pricing Officer can select methods other then the ones used by Assessee to determine the actual income. CLR Editorial Notes: The assessee is a wholly owned subsidiary of a… Read More
Tags: Commonwealth Law Reports, Morgan Stanley, Punjab and Haryana High Court, Supreme Court, The Honourable, TNMM, TPO, transfer pricing
Arms Length Pricing – Adjustment cannot be made to the entire entity turnover/ profits
Ratio of the Case: With relation to the Transfer Pricing regime, Arms Length Pricing should be determined on segment-wise profits & not at an entity level. In such a case, adjustments cannot be made to the entire entity turnover or profits. CLR Editorial Notes: The assessee had entered into several international transactions with its Associated… Read More
Tags: ALP, Arm's length principle, Commonwealth Law Reports, TPO, Transactional Net Margin Method, transfer pricing
CUP & LIBOR most appropriate to determine ALP of Loan Transaction
CLR Editorial Notes: The case refers to a case of Transfer pricing on a loan transaction made by the assessee and the appellant in this case. The assessee was an Indian company which gave a loan of more than USD 1 Million to its USA based Associated Enterprise (AE) at a interest rate of 4%. The Transfer Pricing… Read More
Tags: ALP, Arm's length principle, CitiBank, Commonwealth Law Reports, India, LIBOR, Prime Lending Rate, TPO, transfer pricing, United States
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