Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
Popular Search: empanelment :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: articles on VAT and GST in India :: due date for vat payment :: ACCOUNTING STANDARDS :: VAT Audit :: form 3cd :: cpt :: ACCOUNTING STANDARD :: Central Excise rule to resale the machines to a new company :: VAT RATES :: ARTICLES ON INPUT TAX CREDIT IN VAT :: TAX RATES - GOODS TAXABLE @ 4% :: list of goods taxed at 4% :: TDS
News Headlines »
 CBDT releases Income Tax Return statistics for last two fiscals
 CBDT issues second round of Certificates of Appreciation to tax payers for their contribution towards Nation building
 FinMin looks at cut in corporation tax
 Draft Rules for prescribing the method of valuation of fair market value in respect of the trust or the institution-Chapter XII-EB of the Income-tax Act, 1961- reg.
 India is moving towards a flawed GST
 ICAI to organise two-day international conference in Hyderabad
 Here's how to calculate tax payable on your capital gains
 Income Tax calculations for the financial year 2016-17
 CPE Events 17 October - 22 October 2016
 High Court raps I-T Department for wrong tax demand
  CBDT signs 5 advance pricing pacts with Indian taxpayers

Delhi HC does a balancing act with transfer pricing order
November, 04th 2006

Can a court order resolving a tax dispute leave both the taxpayer and the tax authorities feeling vindicated? A recent ruling by the Delhi High Court has nearly managed this impossible task.

The high court has upheld the constitutional validity of an instruction issued by the Central Board of Direct Taxes (CBDT) that allows assessing officers to refer all cross-border transactions valued at over Rs 5 crore to a transfer pricing officer (TPO). Simply put, these instructions are neither arbitrary nor unreasonable, according to the HC order.

At the same time, the court has held that the transfer pricing officers findings are not binding on the assessing officer (AO) and that the taxpayer whose claims have been disputed has the right to present other relevant material before the AO for his consideration even after the TPO has given his opinion.

Transfer pricing refers to the price charged by an MNC to an associated enterprise for supply of goods and services. Since transfer prices can be used to shift profits out of India and hence avoid taxes, the tax department has regulations in place since 01 to check violations.

The law mandates MNCs to price their transactions with associated enterprises according to the arms length principle. A fairly detailed scheme to compute the arms length price has been set out in the income tax law. MNCs basically need to apply prices that independent enterprises would charge in identical transactions in the market place.

Practically speaking, in the recently concluded assessments, the AO is not disturbing the prices determined by the TPO, though an opportunity is given. The experience so far is that opportunity though given, not much consideration is made to the submissions made by the tax payer to the AO against the order of the TPO says Samir Gandhi, Tax Partner, Deloitte Haskins & Sells. The HC ruling will have wide ramifications while interpreting transfer pricing laws in India, reckon tax experts. 

Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
E-catalogue online catalogue E-brochure online brochure online product catalogue online product catalogue e-catalogue Indi

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions