Bad-Debts Cannot be relevant factor to determine ALP of royalty transaction between licensor & licensee

Bombay High Court Ruling in case of Commissioner of Income Tax – 10 vs. M/s CA Computer Associates India Private Limited [ITA No.20 of 2011 Asst. Year 2006-2007] Gist: Bad-debts cannot be the relevant factor to determine the arm’s length price of the royalty transaction between the licensee and the licensor. Facts: CA Computers India Private Limited (‘the respondent’) had entered into a Software Distribution Agreement with CA Management Inc. (‘CAMI USA’) where under the respondent was appointed as a distributor of the products of CAMI USA in India. Under the agreement, the resp...