Judicial Take on Issues Involving Jurisdiction and Interpretation

Transfer pricing legislation is well known for its complexities. Since it is a relatively new legislation, there are several issues that are in need of statutory clarifications. Many a times, Courts have taken up the task of interpreting important concepts that are central to the theory and practice of transfer pricing. In this section, we have identified a few important areas where Courts have interpreted and defined some of these concepts.

Judicial Trends in Computation of Arm’s Length Price

Various Tribunal and High Court decisions have clarified several aspects with regard to ALP computation; how and when adjustments are to be granted, in what manner particular transactions are to be benchmarked, etc. We have identified several such evolving trends, often relied on by taxpayers in their TP analysis.

Transaction-specific & Computational issues: IT Department Approach

Often, a particular transaction by itself entails certain issues in computation of its arm’s length, regardless of the industry it belongs to. In this section, we have covered nine such issues, specific to particular transactions and relating to computation, as identified by TPOs.

Industry-specific issues: Revenue’s Perspective

While conducting transfer pricing audits tax department officials have come across a few issues that are specific to certain industries, owing to the nature and manner of trading that goes on within them. In this section, we have covered 6 such industries and addressed issues peculiar to them, as identified by revenue officials.

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