Case Law Details
Summary of Findings:-
• The OECD guidelines are not of binding nature and even the Proviso to Rule 10B (4) provides that any subsequent year data cannot be considered. The contemporaneous data of relevant financial year is to be used for making the comparable analysis for arriving at the ALP unless it is proved otherwise
• For arriving at the net margin of operating income, only operating income and operating expenses for the relevant business activity of the assessee are to be taken into consideration.
• Other income, such as dividend income, profit on sale of assets, donations as well as non-operating expenses which are included in the operating incomes of other comparable companies should be excluded as it effects the net margin of the operating profits of the comparable. Working capital adjustments also have to be considered while arriving at the operating net margins.
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