Applicability of transfer pricing provisions to investment made on capital account

Pr. CIT Vs PMP Auto Components Pvt. Ltd (Bombay High Court) Conclusion: Transfer Pricing provisions on shares purchased at value in excess of FMV was not applicable as the same could only be invoked to bring to tax any income arising from an international transaction. Held: Assessee was investing an amount of Rs.2.67 Crores to acquire shares of its AE (subsidiary company), which had a fair market value of 8.19 lakhs. It was this excess payment of Rs.2.58 Crores, when compared to fair market value of the shares which was sought by Revenue to be brought to tax under the transfer pricing provisio...