ALP

Advance pricing agreements – a fresh start in India?

Income Tax - In India, the underlying idea behind the scheme of APA is to make tax administration better and efficient by encouraging taxpayers to provide all the data essential for a comprehensive transfer pricing analysis and to motivate them towards engaging a mutual agreement....

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Two pillar solution to tax challenges for digital economy – Part 2

Income Tax - Implementation plan for the two-pillar solution to address tax challenges of a digital economy Background In my earlier article dated July 19, 2021, I have given a brief overview of the Statement on a two‑pillar solution to address the tax challenges arising from the digitalisation of the economy (the Statement) that was agreed by 130 [...

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Two pillar solution to tax challenges for digital economy- Part 1

Income Tax - Two-pillar solution for Tax challenges arising from Digitalisation of Economy and consensus of majority of OECD/ G20 member countries (including India)  Executive summary Certainty is one of the basic cannons of taxation. With the globalisation of economy when Multi National Enterprises (MNEs) starting setting up businesses across the gl...

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Calculation of Arm’s Length Price-Section 92C of Income Tax Act, 1961

Income Tax - A transaction in which the buyers and sellers of a product act independently and have no relationship to each other. The concept of an arm's length transaction is to ensure that both parties in the deal are acting in their own self interest and are not subject to any pressure or duress from the other party...

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Are Safe Harbor margins attractive?

Income Tax - Under Transfer Pricing regulation, Safe Harbor rules means binding rules laid down under law which mandates income tax authorities to accept the transfer price declared by the assesse, if opted for. Further section 92CB provides methods for determination of arm’s length price....

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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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No TP adjustment for loan & advance for investment in equity or for benefit in business

Lambda Therapeutic Research Ltd. Vs D.C.I.T (ITAT Ahmedabad) - Lambda Therapeutic Research Ltd. Vs DCIT (ITAT Ahmedabad) We find that the assessee has not demonstrated any benefit derived from its associated enterprises namely Lambda USA whereas it has advanced interest free loan of EURO 49,999/-. Thus, the question arises whether there is a need to make any ad...

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ALP determinable for international transaction of Corporate Guarantee

Sami – Sabinsa Group Ltd. Vs DCIT (ITAT Bangalore) - ALP of corporate guarantee has to be determined as it falls within scope and ambit of an international transaction after retrospective amendment to section 92B and 0.5% corporate guarantee is held to be appropriate....

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CCD cannot be treated as ECB/loan for ALP determination

Praxair India Private Limited Vs DCIT (ITAT Bangalore) - The TPO and DRP erred in treating CCDs as ECBs and benchmarked the interest rate against LIBOR rate. The CCDs is a hybrid instrument and cannot be per se treated as ECB / loan....

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No further income attributable to a PE in India, if PE been remunerated at ALP

Mobileum Inc Vs DCIT (ITAT Mumbai) - Mobileum Inc Vs DCIT (ITAT Mumbai) since transactions between the assessee and its AE have been found at arm’s length prices no further income chargeable to tax in India can be said to be attributable for the PE of the assessee. FULL TEXT OF THE ORDER OF ITAT MUMBAI This appeal by the Assessee is ...

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ITAT upheld determination of ALP as nil for duplicative services

DCIT Vs Teradata India Pvt. Ltd. (ITAT Delhi) - The issue under consideration is whether the TPO is correct in considering subvention fee in the BPO segment instead of distribution segment?...

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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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Recent Posts in "ALP"

No TP adjustment for loan & advance for investment in equity or for benefit in business

Lambda Therapeutic Research Ltd. Vs D.C.I.T (ITAT Ahmedabad)

Lambda Therapeutic Research Ltd. Vs DCIT (ITAT Ahmedabad) We find that the assessee has not demonstrated any benefit derived from its associated enterprises namely Lambda USA whereas it has advanced interest free loan of EURO 49,999/-. Thus, the question arises whether there is a need to make any adjustment on account of notional interest...

Read More

Advance pricing agreements – a fresh start in India?

In India, the underlying idea behind the scheme of APA is to make tax administration better and efficient by encouraging taxpayers to provide all the data essential for a comprehensive transfer pricing analysis and to motivate them towards engaging a mutual agreement....

Read More
Posted Under: Income Tax |

ALP determinable for international transaction of Corporate Guarantee

Sami – Sabinsa Group Ltd. Vs DCIT (ITAT Bangalore)

ALP of corporate guarantee has to be determined as it falls within scope and ambit of an international transaction after retrospective amendment to section 92B and 0.5% corporate guarantee is held to be appropriate....

Read More

CCD cannot be treated as ECB/loan for ALP determination

Praxair India Private Limited Vs DCIT (ITAT Bangalore)

The TPO and DRP erred in treating CCDs as ECBs and benchmarked the interest rate against LIBOR rate. The CCDs is a hybrid instrument and cannot be per se treated as ECB / loan....

Read More

Two pillar solution to tax challenges for digital economy – Part 2

Implementation plan for the two-pillar solution to address tax challenges of a digital economy Background In my earlier article dated July 19, 2021, I have given a brief overview of the Statement on a two‑pillar solution to address the tax challenges arising from the digitalisation of the economy (the Statement) that was agreed by 130 [...

Read More
Posted Under: Income Tax |

No further income attributable to a PE in India, if PE been remunerated at ALP

Mobileum Inc Vs DCIT (ITAT Mumbai)

Mobileum Inc Vs DCIT (ITAT Mumbai) since transactions between the assessee and its AE have been found at arm’s length prices no further income chargeable to tax in India can be said to be attributable for the PE of the assessee. FULL TEXT OF THE ORDER OF ITAT MUMBAI This appeal by the Assessee is […]...

Read More

Two pillar solution to tax challenges for digital economy- Part 1

Two-pillar solution for Tax challenges arising from Digitalisation of Economy and consensus of majority of OECD/ G20 member countries (including India)  Executive summary Certainty is one of the basic cannons of taxation. With the globalisation of economy when Multi National Enterprises (MNEs) starting setting up businesses across the gl...

Read More
Posted Under: Income Tax |

Calculation of Arm’s Length Price-Section 92C of Income Tax Act, 1961

A transaction in which the buyers and sellers of a product act independently and have no relationship to each other. The concept of an arm's length transaction is to ensure that both parties in the deal are acting in their own self interest and are not subject to any pressure or duress from the other party...

Read More
Posted Under: Income Tax |

ITAT upheld determination of ALP as nil for duplicative services

DCIT Vs Teradata India Pvt. Ltd. (ITAT Delhi)

The issue under consideration is whether the TPO is correct in considering subvention fee in the BPO segment instead of distribution segment?...

Read More

Company with huge asset base cannot be compared with company having insignificant assets

Evalueserve.com Pvt. Ltd. Vs DCIT (ITAT Delhi)

If a company is having huge asset base, brand value, goodwill and presence in global market with significant R & D, then it cannot be compared with a company which is purely captive service provider in ITeS/BPO, having low risk and insignificant assets....

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