Income Tax : The update outlines revised compliance forms, timelines, and penalties under the new rules. It highlights a structured transition ...
Corporate Law : The issue was identifying the correct transfer pricing method for intercompany transactions. The conclusion holds that TNMM is app...
Income Tax : The Tribunal held that the Indian entity was only a distributor and not a technology or content owner. It rejected the Revenue’s...
Income Tax : This explains the new block assessment mechanism allowing ALP to apply across multiple years. It emphasizes reduced disputes and s...
Income Tax : The issue concerns replacement of Form 3CEB with a new reporting framework. The reform mandates structured reporting with enhanced...
Income Tax : CBDT signed a record number of APAs to provide clarity on transfer pricing and reduce disputes. The framework ensures advance dete...
CA, CS, CMA : KSCAA urged CBDT to extend due dates for assessees under Section 92E, citing an omission in Circular No. 15/2025 that created inco...
CA, CS, CMA : Chartered Accountants Association, Ahmedabad requests extension of ITR and audit due dates for AY 2025-26 citing compressed timeli...
Income Tax : CBDT sets transfer pricing tolerance range at 1% for wholesale trading and 3% for other transactions for AY 2024-25, providing cla...
Income Tax : From April 2025, TPOs can determine ALP for SDTs not initially referred or reported. This ensures accurate adjustments and complia...
Income Tax : The issue was whether high-turnover companies can be compared with a smaller software service provider. The Tribunal held that com...
Income Tax : The Tribunal held that transfer pricing adjustment cannot survive without a final assessment order post-DRP directions. Repeating ...
Income Tax : The Tribunal held that subscription to preference shares cannot be re-characterized as loans in absence of evidence showing sham t...
Income Tax : The tribunal held that the safe harbour limit applies to valuation determined by the DVO, not just stamp duty value. It ruled in f...
Income Tax : The Court held that Tribunal remand is not a fresh reference under transfer pricing law. Hence, limitation expired earlier, entitl...
Income Tax : Notification 157/2025 sets 1% tolerance for wholesale trading and 3% for all other cases for Arm's Length Price variation for AY 2...
Income Tax : CBDT notifies Income Tax (Sixth Amendment) Rules, 2025, introducing safe harbour rules for assessment year 2025-26. Full details o...
Income Tax : CBDT sets 1% tolerance for wholesale trading and 3% for other cases under Section 92C for FY 2024-25. No adverse effects from retr...
Income Tax : Stay informed on the latest Income Tax Rule changes with Notification No. 104/2023 by the Ministry of Finance. Learn about amendme...
Income Tax : Read how CBDT's Notification No. 58/2023 amends Income-tax Rules, extending Safe Harbour rules to AY 2023-24. Insights from Minist...
The taxpayer, a manufacturer and exporter of chemicals had more than 97.5 percent of its sales to its associated enterprise (“AE”). It benchmarked the sales to AEs under the Comparable Uncontrolled Price (“CUP”) method based on the average price charged by the AEs to the customers. The Revenue observed that the non-AEs who purchased the chemicals paid a higher price and adopted the price charged to the non-AEs as the CUP. The taxpayer stated that the AEs operated in the insulation industry and that the non-AEs were in the aerospace sector, which also resulted in the difference in pricing. It also contended that the AE came into existence for the reason that its ultimate customers required long term warranties on the product and were more comfortable dealing with an American firm than directly with the taxpayer. It was also pointed out that the ALP determined by the Revenue turned out to be higher than even the price ultimately charged to the buyers by the AEs. It also stated that the sale to non-AEs were in small quantities and non-recurrent, which cannot be compared directly with the sales to the AEs. However, the Revenue rejected taxpayer’s contentions after considering various aspects concerning the comparability of sales to non-AEs including differences in turnover, quantity, customer profiles and geography. On appeal, the Tribunal accepted the contentions of the taxpayer and ruled that there was no case for the Revenue in making the adjustments and accordingly, the sales to the AEs were held to be at arm’s length.
The Mumbai Bench of the Income Tax Appellate Tribunal (‘the Tribunal’), in the case of ITO v. Zydus Altana Healthcare Pvt. Ltd. [2010-TI I-29-ITAT–MUM-TP], while deciding the case in favour of the assessee, ruled that the determination of arm’s length price should be based on the functional and asset profile of a company and profit margins earned by comparable companies should be adjusted for functional differences between the tested party and the comparables. The Tribunal also ruled that in case an assessee’s income is exempt from tax (and taxable in the overseas jurisdiction), this factor should be considered by the revenue authorities while undertaking a tax assessment since in such a situation, there is no benefit to the assessee in charging its associated enterprise a lower mark-up.
Supreme Court has asked the finance ministry and Central Board of Direct Taxes (CBDT), the apex body in charge of administering India’s taxation system, to amend transfer pricing, or TP, laws if it wishes to bring domestic transactions under their ambit.
The Hon’ble Supreme Court (Supreme Court), on 1st October 2010, in the case of Maruti Suzuki India Ltd. has directed the Transfer Pricing Officer (TPO) to complete the transfer pricing assessment proceedings without being influenced by the judgment passed by the Delhi High Court. The Delhi High Court had clarified crucial transfer pricing dimensions related to marketing intangibles and provided guidance for ascertaining the arm’s length price under the provisions of Section 92 of the Income Tax Act, 1961 (the Act)
Delhi High Court Ruling: Transfer Pricing – Sec 92 – An important ruling by the Hon’ble High Court wherein it has been held that the methodology to be adopted by the Revenue Authorities for making an adjustment should be equitable and fair, and has ruled on the payment for the use of intangible assets and attributing arm’s length consideration for activities carried out by the licensee, etc. [Maruti Suzuki India Limited – W.P. 6876/2008]
A General Anti-Avoidance Rule (GAAR) was proposed in the Indian tax legislation for the first time in DTC 2009, apart from Specific Anti-avoidance Rules (SAARs) like transfer pricing (TP) provisions, dividend stripping transactions in securities, dis
With the advent of MNCs(Multi National Concerns) a trend has also been adopted by the MNCs to structure their investments and business strategy in such a way that profits are maximized in such jurisdictions where tax rates are low, which give rise to the emerging problem of transfer pricing all over the world.
ITAT Ruling: Transfer Pricing – Sec 92 – While benchmarking a controlled transaction, mere selling of an identical product to unrelated party is not sufficient for applying Comparable Uncontrolled Price (CUP) as the most appropriate method unless reasonable and accurate adjustments on account of economic and market differences can be arrived to determine the arm’s length price. [M/s Intervet India Private Limited – 2010-TIOL-240- ITAT-MUM].
The US and Indian competent tax authorities have reached a negotiated settlement on transfer pricing dispute in respect of certain captive software development units for the financial year 2004-05. The settlement has been reached through the mutual agreement procedure (MAP) mechanism provided in the Indo-US Double Taxation Avoidance Agreement (DTAA), sources said.
The Finance Act, 2001 substituted section 92 with a new section and introduced new sections 92A to 92F in the Income-tax Act, relating to computation of income from an international transaction in order to facilitate the computation of reasonable, fair and equitable profits and tax in India in the case of businesses carried on by multinational companies. The transfer pricing provisions are in line with those stipulated by OECD. However there is a difference that the Indian legislation does not permit the use of unspecified method to compute arms length price as permitted in OECD guidelines.
