Transfer Pricing

Section 92CE- Introduction of secondary adjustment- Suggestions

Income Tax - The Finance Bill, 2017 has introduced the concept of secondary adjustment on Transfer Pricing (TP) adjustments. A taxpayer is required to make a secondary adjustment, where the primary adjustment to transfer price has been made in the following situations...

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Understanding Secondary Transfer Pricing Adjustments

Income Tax - Formal Transfer pricing regulation has been present in India for more than twelve years. Section 92 of income tax act, 1961 warrants that international transactions between the associated enterprises shall be computed having regard to the Arm’s Length Price (ALP). ...

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Union Budget 2017– Thin Capitalisation Rules- Anomaly between Finance Bill & Memorandum

Income Tax - Anomaly between the provision of Finance Bill and Memorandum explaining the Finance Bill- Interestingly the phraseology used in Memorandum explaining the provisions of The Finance Bill 2017 and Finance Bill 2017 to calculate the excess interest is ambiguous and results in different outcome. ...

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Union Budget 2017- Key Transfer Pricing Proposals

Income Tax - Finance Act, 2012 has made an amendment to extend the Transfer Pricing Provisions to the transactions entered with domestic related parties or by an undertaking with other undertakings of the same entity for the purposes of section 40A, chapter VI-A and section 10AA....

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Budget 2017 limits scope of Audit of Specified Domestic Transactions

Income Tax - Budget 2017- it is proposed to provide that expenditure in respect of which payment has been made by the assessee to a person referred to in under section 40A(2)(b) are to be excluded from the scope of section 92BA of the Act. Accordingly, it is also proposed to make a consequential amendment in section 40(A)(2)(b) of the Act....

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Cabinet approves Measures to Prevent Base Erosion & Profit Shifting by India

Income Tax - Cabinet approves signing of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting by India...

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Guidance Note on Transfer Pricing Report U/s. 92E of Income Tax Act, 1961

Income Tax - ICAI has released the 5th Edition (November 2016) of the Guidance Note on Report Under Section 92E of the Income Tax Act, 1961 (Transfer Pricing). ...

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Indian businesses witness significant impact on tax planning from OECD BEPS tax plan

Income Tax - The results of a recently conducted global survey of 2,600 businesses in 36 countries, finds little impact from the OECD BEPS programme which was finalised last October, as 78 percent of the surveyed businesses said that they have not changed their businesses approach to taxation, despite more than 80 countries having agreed to adopt at l...

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Preamble to 2016 U.S. Model Income Tax Convention

Income Tax - Click here to join Online GST Certification Course Jointly by GST Professionals & Taxguru.in On February 17, 2016, the Treasury Department released a revised 2016 U.S. Model Income Tax Convention (the 2016 Model), which is the baseline text the Treasury Department uses when it negotiates tax treaties. The U.S. Model Income Tax Convent...

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Transfer Pricing Rules to incorporate “range concept” and “use of multi-year data”

Income Tax - Notification of Transfer Pricing Rules to incorporate range concept and use of multi-year data to reduce litigation on transfer pricing issues....

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ITAT on TP adjustment on account of Compensation for deemed brand development

Hyundai Motor India Limited Vs Deputy Commissioner of Income Tax LTU- II (ITAT Chennai) - The first question that we need to decide is whether the benefit accruing to the HMC Korea, as a result of increased brand value due to sale of Hyundai cars in India by the assessee company, constitutes an international transaction....

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TP: When Resale Price Method can be used with respect to related parties

Zee Entertainment Enterprises Ltd Vs The Addl Commissioner of Income Tax (ITAT Mumbai) - Transfer Pricing Officer has selected RPM as most appropriate method for determining the arm's length price of the transaction of sale of programmes and film rights to ATL in contrast to the TNM method selected by the assessee. The first controversy is as to whether the Transfer Pricing Officer was ...

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Mobilization advances cannot be treated as Loans & Advances and not subject to TP

DCIT Vs. M/s. Lanco Infratech Limited (ITAT Hyderabad) - Click here to join Online GST Certification Course Jointly by GST Professionals & Taxguru.in ITAT Hyderabad has held in the case of DCIT Vs. M/s. Lanco Infratech Limited held that Mobilisation/ trade advance has been wrongly treated as trade receivable. It is not to be subjected to TP. It cannot...

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Closely connected international transaction can be clubbed / aggregated

M/s. Kaypee Electronics & Associates Pvt. Ltd. Vs Deputy Commissioner of Income Tax (ITAT Bangalore) - These are appeals filed by the assessee-company directed against the assessment orders dated 24.12.2014, 17.12.2015 and 30.11.2016 for the assessment years 2010-11, 2011-12 and 2012-13 respectively u/s. 143(3) r.w.s. 144C of the Act by the Deputy Commissioner of Income-tax / Assistant Commissioner o...

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TPO cannot go beyond ITAT instruction in matter remanded to him

Li & Fung India Pvt. Ltd. v/s Astt. Commissioner OF Income Tax & Anr. (Delhi High Court) - In a recent ruling, the Delhi High Court found that the Transfer Pricing Officer (TPO) cannot go beyond a remand order when such remand was based on a specific finding. The division bench comprising of Justice S. Ravindra Bhatt and Justice Najmi Waziri was hearing a writ petition filed by M/s LI & F...

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Notification on ALP determination in respect of wholesale trading

Notification No. 57/2016-Income Tax - (14/07/2016) - Central Government hereby notifies that where the variation between the arm’s length price determined under section 92C and the price at which the international transaction or specified domestic transaction has actually been undertaken does not exceed one percent of the latter in respect of wholes...

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Transfer posting orders in grade of ACIT/DCIT for Delhi Region

ORDER NO. 38/G.O. - (11/05/2016) - Click here to join Online GST Certification Course Jointly by GST Professionals & Taxguru.in F.No. P-328/T&P/DC-ACsIT/2016-17/1818 OFFICE OF THE PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX NEW DELHI Dated : 11th May, 2016 ORDER NO. 38/G.O. 2016-17 Sub:-Estt. Group ‘A’ – Tran...

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CBDT signs 11 more unilateral Advance Pricing Agreements

NA - (29/03/2016) - Central Board of Direct Taxes signed 11 unilateral APAs on 28th March, 2016. With this signing, India has entered into 59 bilateral and/or unilateral APAs. 50 of these agreements have been signed in the current financial year. The agreements cover a range of international transactions, including cor...

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Revised Guidelines- Implementation of Transfer Pricing Provisions

Instruction No. 3/2016 - (10/03/2016) - In terms of the provisions, any income arising from an international transaction or specified domestic transaction between two or more associated enterprises shall be computed having regard to the Arm's Length Price....

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Amends Safe Harbour Rules for Specified Domestic Transactions

Notification No. 05/2016-Income Tax - (17/02/2016) - Provided further that in respect of eligible specified domestic transactions, other than the transaction referred to in clause (iv) of rule 10 THB, undertaken during the previous year relevant to the assessment year beginning on the 1st day of April, 2013 or beginning on the 1st day of April, 2014 o...

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Transfer Pricing’s Popular Posts

Recent Posts in "Transfer Pricing"

Cabinet approves Measures to Prevent Base Erosion & Profit Shifting by India

Cabinet approves signing of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting by India...

Read More
Posted Under: Income Tax |

ITAT on TP adjustment on account of Compensation for deemed brand development

Hyundai Motor India Limited Vs Deputy Commissioner of Income Tax LTU- II (ITAT Chennai)

The first question that we need to decide is whether the benefit accruing to the HMC Korea, as a result of increased brand value due to sale of Hyundai cars in India by the assessee company, constitutes an international transaction....

Read More

TP: When Resale Price Method can be used with respect to related parties

Zee Entertainment Enterprises Ltd Vs The Addl Commissioner of Income Tax (ITAT Mumbai)

Transfer Pricing Officer has selected RPM as most appropriate method for determining the arm's length price of the transaction of sale of programmes and film rights to ATL in contrast to the TNM method selected by the assessee. The first controversy is as to whether the Transfer Pricing Officer was justified in selecting the RPM as most a...

Read More

Mobilization advances cannot be treated as Loans & Advances and not subject to TP

DCIT Vs. M/s. Lanco Infratech Limited (ITAT Hyderabad)

Click here to join Online GST Certification Course Jointly by GST Professionals & Taxguru.in ITAT Hyderabad has held in the case of DCIT Vs. M/s. Lanco Infratech Limited held that Mobilisation/ trade advance has been wrongly treated as trade receivable. It is not to be subjected to TP. It cannot be re-characterised as receivables. Mor...

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Posted Under: Income Tax |

Closely connected international transaction can be clubbed / aggregated

M/s. Kaypee Electronics & Associates Pvt. Ltd. Vs Deputy Commissioner of Income Tax (ITAT Bangalore)

These are appeals filed by the assessee-company directed against the assessment orders dated 24.12.2014, 17.12.2015 and 30.11.2016 for the assessment years 2010-11, 2011-12 and 2012-13 respectively u/s. 143(3) r.w.s. 144C of the Act by the Deputy Commissioner of Income-tax / Assistant Commissioner of Income-tax, Circle-4(1)(1), Bangalore....

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TPO cannot go beyond ITAT instruction in matter remanded to him

Li & Fung India Pvt. Ltd. v/s Astt. Commissioner OF Income Tax & Anr. (Delhi High Court)

In a recent ruling, the Delhi High Court found that the Transfer Pricing Officer (TPO) cannot go beyond a remand order when such remand was based on a specific finding. The division bench comprising of Justice S. Ravindra Bhatt and Justice Najmi Waziri was hearing a writ petition filed by M/s LI & FUNG India, against the Show Cause Notice...

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Exclusion of comparables based on Turnover and size filter is valid

M/s. Logitech Engineering & Design India P. Ltd, (erstwhile M/s. Lifesize Communication P. Ltd) Vs. Deputy Commissioner of Income-tax (ITAT Bengaluru)

Bombay High Court decision upheld the DRP order in excluding 6 companies, from the list of comparables chosen by the TPO, on the basis of turnover and size. Following it , we uphold the DRP order in excluding the above 6 companies, from the list of comparables chosen by the TPO, on the basis of turnover and size. ...

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Section 92CE- Introduction of secondary adjustment- Suggestions

The Finance Bill, 2017 has introduced the concept of secondary adjustment on Transfer Pricing (TP) adjustments. A taxpayer is required to make a secondary adjustment, where the primary adjustment to transfer price has been made in the following situations...

Read More
Posted Under: Income Tax |

Understanding Secondary Transfer Pricing Adjustments

Formal Transfer pricing regulation has been present in India for more than twelve years. Section 92 of income tax act, 1961 warrants that international transactions between the associated enterprises shall be computed having regard to the Arm’s Length Price (ALP). ...

Read More
Posted Under: Income Tax |

Transfer Pricing adjustment has to be done only in respect of International Transactions with Associated Enterprises

CIT Vs ALSTOM Projects India Limited (Bombay High Court)

We also note that the Delhi High Court in Commissioner of Income Tax Vs. Keihin Panalfa Ltd. (ITA No.11 of 2015) decided on 9th September, 2015 has while dealing with transfer pricing adjustment in the absence of segmental accounts held that adjustments have to be restricted only to transactions with Associated Enterprises. It further hel...

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