TMI BlogDetermination of arms length price under section 92CX X X X Extracts X X X X X X X X Extracts X X X X ..... o account for differences, if any, between 3 [the international transaction or the specified domestic transaction] and the comparable uncontrolled transactions or between the enterprises entering into such transactions, which could materially affect the price in the open market; ( iii ) the adjusted price arrived at under sub-clause ( ii ) is taken to be an arms length price in respect of the property transferred or services provided in 3 [the international transaction or the specified domestic transaction]; ( b ) resale price method, by which,- ( i ) the price at which property purchased or services obtained by the enterprise from an associated enterprise is resold or are provided to an unrelated enterprise, is identified; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ising from the transfer or provision of the same or similar property or services by the enterprise, or by an unrelated enterprise, in a comparable uncontrolled transaction, or a number of such transactions, is determined; ( iii ) the normal gross profit mark-up referred to in sub-clause ( ii ) is adjusted to take into account the functional and other differences, if any, between 3 [the international transaction or the specified domestic transaction] and the comparable uncontrolled transactions, or between the enterprises entering into such transactions, which could materially affect such profit mark-up in the open market; ( iv ) the costs referred to in sub-clause ( i ) are increased by the adjusted profit mark-up arrived at under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to 3 [the international transaction or the specified domestic transaction]: Provided that the combined net profit referred to in sub-clause ( i ) may, in the first instance, be partially allocated to each enterprise so as to provide it with a basic return appropriate for the 5 [type of international transaction or specified domestic transaction] in which it is engaged, with reference to market returns achieved for similar types of transactions by independent enterprises, and thereafter, the residual net profit remaining after such allocation may be split amongst the enterprises in proportion to their relative contribution in the manner specified under sub-clauses ( ii ) and ( iii ), and in such a case the aggregate of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ofit margin referred to in sub-clause ( iii ); ( v ) the net profit margin thus established is then taken into account to arrive at an arms length price in relation to 3 [the international transaction or the specified domestic transaction]. 1 [ (f) Any other method as provided in rule 10AB. ] (2) For the purposes of sub-rule (1), the comparability of 2 [an international transaction or a specified domestic transaction] with an uncontrolled transaction shall be judged with reference to the following, namely:- ( a ) the specific characteristics of the property transferred or services provided in either transaction; ( b ) the functions performed, taking into account assets employed or to be employed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 CA referred to as the 'current year')] in which 3 [the international transaction or the specified domestic transaction] has been entered into : Provided that data relating to a period not being more than two years prior to 7 [the current year] may also be considered if such data reveals facts which could have an influence on the determination of transfer prices in relation to the transactions being compared. 8 [ Provided further that the first proviso shall not apply while analysing the comparability of an uncontrolled transaction with an international transaction or a specified domestic transaction, entered into on or after the 1st day of April, 2014.] 9 [(5) In a case where the most appropriate method for deter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore it was read as an international transaction . 3. Substituted vide Notification No. 41/2013 dated 10-06-2013 before it was read as the international transaction 4. Substituted vide Notification No. 41/2013 dated 10-06-2013 before it was read as international transactions 5. Substituted vide Notification No. 41/2013 dated 10-06-2013 before it was read as type of international transaction 6. Inserted vide Not.83/2015 - Dated 19-10-2015 7. Substituted vide Not.83/2015 - Dated 19-10-2015 before it was read as, such financial year 8. Inserted vide Not.83/2015 - Dated 19-10-2015 9. Inserted vide Not.83/2015 - Dated 19-10-2015 - - statute, statutory provisions legislation, law, enactment, Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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