The Information Technology-enabled Services (ITeS) and software development sectors are undertaking the maximum Advance Pricing Agreements (APAs) with tax authorities in India for reducing litigation and operating smoothly while countering tricky transfer pricing cases, officials said.

The Income Tax department has signed 31 such agreements so far with various sectors of the economy.

"The most number of applications (for inking of APA) come from ITeS and software development services as, obviously, the disputes here are maximum. We have welcomed them as we have welcomed all the other sectors of the economy which have either entered into APAs with the tax department or are desirous of doing so," CBDT member (income tax and revenue) Atulesh Jindal told PTI.

The top official refrained, however, from quantifying specifically the number of APAs entered into or applied for by these two prime business sectors out of the total 580 applications that tax authorities have received since the scheme was launched in 2012.

The Central Board of Direct Taxes (CBDT) is the apex policy-making body of the I-T department.

Jindal said that among the other sectors of the economy that have entered into APAs are investment advisory services, engineering design services, marine products, contract research and development and cargo-handling support services.

An Advance Pricing Agreement is signed between a taxpayer and the tax department on an appropriate transfer pricing methodology for determining the value of assets and ensuing taxes on intra-group overseas transactions.

Transfer pricing transactions between separate entities of large MNCs have generated much heat in the last few years, including of large companies like Vodafone, Shell, WNS and Nokia.