Transfer Pricing

Thin Capitalization – Part I

Income Tax - Thin capitalization refers to ratio of debt to equity. Where entity is heavily capitalized by debt, it consider to be thinly capitalized. In other word, it referred to a situation where an entity is highly geared. That is proportion of debt capital is much higher as compared to equity capital of an entity. Interest payment […]...

Responsibility of an Enterprise Under Transfer Pricing

Income Tax - Section 92D provides that every person who has entered into an international transaction or specified domestic transaction, during a previous year, shall keep and maintain such information and documents, prescribed by the Board, as will assist the Assessing Officer/ Transfer Pricing Officer to compute the income arising from that transact...

Penalties Under Transfer Pricing

Income Tax - Article explains Transfer Pricing Penalties which includes Penalty for under reporting and misreporting of income, Penalty for failure to keep and maintain information and documents in respect of international transaction or specified domestic transaction, Penalty for failure to furnish report under section 92E, Penalty for failure to fur...

Transfer Pricing Compliance Chart for Financial Year 2019-20

Income Tax - Transfer Pricing Compliance Chart for Financial Year 2019-20 which includes Transfer Pricing Audit, Transfer Pricing Study- Documentation, Return of Income (Having applicability of Transfer Pricing Provisions), Master File, Intimation by a designated Constituent Entity, Intimation by Designated Constituent Entity and CbCR. Activity Sect...

India Budget 2020 – Key transfer pricing amendments

Income Tax - The Hon’ble Finance Minister, Ms. Nirmala Sitharaman, presented the Union Budget on 1 February 2020, introducing measures aimed at, inter-alia, reducing litigation, improving effectiveness of tax administration, providing tax certainty and simplifying compliance with the overall objective of enhancing the ease of doing business in India...

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Income tax Authority before whom particulars of parent entity and alternate reporting entity to file CbC Report

Income Tax - Income Tax Department designates Income tax Authority before whom particulars of parent entity and alternate reporting entity to file Country-by-Country Report would be notified...

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

Income Tax - Following is the Exposure Draft of the Guidance Note on Report under section 92E of the Income-tax Act, 1961 (Transfer Pricing), issued by the Committee on International Taxation of ICAI for comments. Changes have been made to the extent of amendments made by the Finance Act, 2017....

Introduce threshold limit of Rs. 25 crore for SDT documentation requirements: ICAI

Income Tax - The Finance Act 2012 has introduced DTP in spite of existing provisions under the Act which empower the Assessing Officer (AO) to re-compute the income of assessees availing profit-linked deductions if there are transactions with related parties or other undertakings of the same assessee...

Acceptance of Transfer Pricing MAP and bilateral APA – Reg.

Income Tax - Clarification of India’s position on the acceptance of MAP and bilateral APA in cases of countries where Article 9(2) of OECD Model Tax Commentary is absent...

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

Income Tax - ICAI has released the 6th Edition (November 2017) of the Guidance Note on Report Under Section 92E of the Income Tax Act, 1961 (Transfer Pricing). This Guidance Note was previously revised in February, 2013 , August 2013 and October 2016. The ICAI has revised Guidance note on Report under Section 92E of the Income Tax […]...

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Two enterprises can be treated as associated enterprises when criterion specified in Section 92A(2) is satisfied

Kaybee Pvt Ltd Vs ITO (ITAT Mumbai) - Kaybee Pvt Ltd Vs ITO (ITAT Mumbai) Section 92A(2) governs the operation of Section 92A(1) by controlling the definition of participation in management or capital or control by one of the enterprise in the other enterprise. If a form of participation in management, capital or control is not recogniz...

No penalty for bonafide different perspective in ALP calculation

ITO Vs Tianjin Tianshi India Pvt. Ltd. (ITAT Delhi) - The assessee is one of the group companies of China based TIENS Group of Companies. The business of the assessee, is Trading/Distribution of Food Supplements and Health Care Equipments. The products dealt with by the Company are basically products manufactured at China or other places by Group conce...

No addition If ALP principle is satisfied qua relevant transaction

Celltick Technologies Ltd Vs DCIT (ITAT Mumbai) - Celltick Technologies Ltd Vs DCIT (ITAT Mumbai) If the arms length principle is satisfied qua the relevant transaction between the assessee and its Indian subsidiary, no further profits can be attributed to the assessee in India even if it was to be held that the latter had a PE in India e find that...

Ad hoc determination of ALP de-hors Section 92C & not sustainable

Hathway Cable and Datacom Ltd. Vs DCIT (ITAT Mumbai) - ITATheld that the ad hoc determination of ALP de-hors Section 92C of the Act cannot be sustained, rendering the entire transfer pricing adjustment unsustainable in law....

AO must establish existence of international transaction before undertaking benchmarking of AMP expenses

Acer India Pvt. Ltd. Vs. DCIT (ITAT Bangalore) - In the instant case, we notice that the TPO has entertained the belief on the basis of presumptions that the assessee’s AMP expenses have promoted the brand value of its AE, i.e., no material has been brought on record to show the existence of International transaction. Before us, the Ld A.R place...

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CBDT Amends Income Tax Rule 10CB

Notification No. 76/2019-Income-tax [G.S.R. 701(E)] - (30/09/2019) - CBDT Amends Income Tax Rule 10CB -Computation of interest income pursuant to secondary adjustments vide Notification No. 76/2019-Income-tax dated 30th September, 2019. MINISTRY OF FINANCE (Department of Revenue) (CENTRAL BOARD OF DIRECT TAXES) New Delhi, the 30th September, 2019 Notification No. 76/...

CBDT notifies tolerance range for wholesale trading & for other cases

Notification No. 64/2019- Income Tax [S.O. 3272(E).] - (13/09/2019) - Notification No. 64/2019- Income Tax provides for tolerance range of one per cent. for wholesale trading and three per cent. in all other cases for assessment year 2019-20. It is certified that none will be adversely affected by the retrospective effect being given to the notification. MINISTRY OF F...

Govt notifies Multilateral Convention to implement Measures to Prevent BEPS

Notification No. 57/2019-Income Tax [S.O. 2887(E)] - (09/08/2019) - Whereas the Multilateral Convention to Implement Tax Treaty related Measures to Prevent Base Erosion and Profit Shifting (hereinafter referred to as the “the said Convention”) was signed by India at Paris, France on the 7th day of June, 2017;...

Draft Amendment To Transfer Pricing Rule 10CB related to Computation of Interest Income U/s 92CE

F. No. 370142/12/2017-TPL - (19/06/2018) - Amendment in Rule 10CB of Income-tax Rules, 1962 in respect of computation of interest income pursuant to secondary adjustment made under section 92CE of Income-tax Act, 1961 – Comments and suggestions ...

Draft notification proposing amendment to rule 44E, Form 34C, 34D & 34DA

F.No.370142/34/2016-TPL (Part) - (10/04/2018) - Draft notification proposing an amendment to rule 44E, Form 34C, 34D and 34DA as per BEPS action item 5, for improving transparency in relation to tax rulings– comments and suggestions...

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