CA, CS, CMA : Learn about transfer pricing, its importance, methods, documentation, penalties for non-compliance, and advanced pricing agreement...
Income Tax : Understand the UAE's transfer pricing framework and benchmarks for managerial compensation under the new corporate tax law. Ensure...
Income Tax : Explore the complexities of international taxation and transfer pricing, crucial for multinational enterprises. Learn about associ...
Income Tax : Discover key insights on Global Anti-Base Erosion Model Rules (GloBE) for M&A strategies. Learn about Income Inclusion and Underta...
Income Tax : Delve into the complexities of digital taxation, exploring its evolution, significance, and global responses. Learn about fair ta...
Income Tax : What is the procedure to approve Form 3CEB? Form uploaded by CA shall be available under For your action tab in Taxpayer’s Workl...
Income Tax : ICAI Releases Exposure Draft Guidance Note On Report Under Section 92E Of Income-Tax Act, 1961 (Transfer Pricing) Based on the la...
Income Tax : Association for Corporate Advisers and Executives (ACAE) made a Request for Extension of Due Dates for filing Tax Audit and Transf...
Income Tax : Voice Of CA has made a Request for Extension of specified date of filing Tax Audit Report and other forms falling due on or before...
Income Tax : Chamber of Tax Consultants has made a Request for Extension of Due Dates for filing Tax Audit and Transfer Pricing Reports to Smt....
Income Tax : Learn how ITAT Bangalore ruled in favor of Herbalife India on technical service payments, clarifying FTS under India-USA DTAA. Det...
Income Tax : Explore the ITAT Hyderabad's decision on interest as an international transaction in Clinasia Labs Pvt Ltd vs ITO case. Detailed a...
Income Tax : ITAT Delhi rules RPM as the best method for benchmarking solar goods purchases in the D Light Energy P. Ltd. vs Assessing Officer ...
Income Tax : Tribunal upholds CIT(A) decisions in DCIT Vs Astral Limited case, offering key insights on TP adjustments, ESOP expenses, and Sect...
Income Tax : Delhi High Court quashes reassessment notices by DCIT after TPO settles arm's length remuneration issue. Detailed analysis of Prog...
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...
Income Tax : Notification No. 46/2023-Income-Tax Dated: 26th June, 2023 regarding deemed arm's length price for assessment year 2023-2024. Le...
Income Tax : In exercise of the powers conferred by the third proviso to sub-section (2) of section 92C of the Income-tax Act, 1961 (43 of 1961...
Income Tax : Safe Harbour rules for AY 2022 2023 | Income tax Act, 1961 | Notification No. 66/2022-Income-Tax | Dated: 17th June, 2022 | CBDT...
The fact of approval of the payment by the RBI has been succinctly recorded by the TPO in his order as well. He still chose to propose adjustment in respect of full payment. In our considered opinion, when the rate of royalty payment and fee for drawings etc. has been approved or deemed to have been approved by the RBI, then such payment has to be considered at ALP.
In our opinion, the assessee himself having taken these two non-related parties as comparables in its TP study, it cannot now turn back and say that one of the parties is not comparable without giving any cogent or convincing reason. The only reason given by the assessee in this regard is that the use of technology availed from Dupont has restricted application. It is, however, observed from the relevant figures that the domestic sales generated by the assessee using the technology of Dupont is quite comparable with the domestic sales generated from the use of technology of its AE Kansai Japan. There is thus no merit in the stand of the assessee that Depont is not a comparable case with Kansai Japan.
We further note that in this case the loan agreement was for fixed rate of interest. The LIBOR has been accepted in decision referred above as the most suitable bench mark for judging Arms’ length price in case for foreign currency loan. Hence, adjustment as made by the TPO is not warranted.
Insofar as question (b) is concerned, it becomes academic as if the eight comparables selected by the TPO are found not to be functionally comparable then the difference between the operating margin of the respondent at 15.05% as against the 18.97% of comparable companies being within the range of +/ – 5% the amounts received by the respondent – assessee is within the statutory limits. Therefore, we see no reason to entertain question (b).
Government Approves Issue of Circulars on Identification of Contract R&D Service Provider With Insignificant Risk and on Application of Profit Split Method Based on Recommendation of the Rangachary Committee; These Circulars Will Help in Providing Certainty to the Taxpayer on Issues Relating to Transfer Pricing of Development Centre
As regards the data used by the TPO while determining the ALP, we find that it is to be as per the provisions of section 92D of the Act that every person who has entered into international transactions is required to maintain information and documentation thereof. Rule 10B(4) provides that the information and documents as specified under Rule 10B(1) and 10B(2) should as far as possible be contemporaneous and should exist latest by the “specified date” referred to in section 92F(4) which has the same meaning as ‘due date’ in Explanation 2 to section 139(1) of the Act. In the assessee’s case, this would be ’30th day of September’ as it is a company.
In the present case, as we have noted earlier, it is only on account of the manufacturing activity that the activity of commissioning and installation of the equipment arises and pertinently all the aforesaid activities are negotiated and contracted for at one instance.
(d) Companies having super normal profit may have to be examined further to determine the reason for the extra ordinary profits. (e) Companies whose employee or directors are involved in fraud should not be accepted as the financial results are not reliable. (f) Companies having the turnover of less than Rs. one crore or more than Rs.200 crores should not be taken as comparables.
Transfer pricing adjustment in relation to advertisement, marketing and sales promotion expenses incurred by the assessee for creating or improving the marketing intangible for and on behalf of the foreign Associated Enterprises is permissible.
It is seen that the assessee has itself accepted that TNMM is similar to CPM excepting that CPM is based on gross margins whereas TNMM is based on net margins. The assessee has also accepted that if proper selection criteria are adhered to application of TNMM would also result in the fact that the price at which the assessee has undertaken the international transactions are at arm’s length.
