TMI BlogDraft scheme of the proposed rules for computation of Arm’s Length Price (ALP) of an International Transaction or Specified Domestic Transaction undertaken on or after 01.04.2014X X X X Extracts X X X X X X X X Extracts X X X X ..... 21 st May, 2015 Subject: - Draft scheme of the proposed rules for computation of Arm s Length Price (ALP) of an International Transaction or Specified Domestic Transaction undertaken on or after 01.04.2014. Section 92C of the Income Tax Act, 1961 (the Act ) provides for computation of Arm s Length Price (ALP) of an international transaction or specified domestic transaction. 2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ril, 2014 shall be computed in such manner as may be prescribed. 3. Therefore, the manner of computation of ALP is proposed to be provided through the amendment of Income-tax Rules. The proposed mechanism and conditions under which the multiple year data and range concept would be used for determination of ALP shall be as under: - A. Adoption of the Range Concept i. The Range con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erator and denominator of the chosen Profit Level Indicator (PLI) would be aggregated for all the years for every comparable entity and the margin would be computed thereafter; and d) The data points lying within the 40th to 60th percentile of the data set of series would constitute the range. iii. If the transfer price of the tested party falls outside the range as constructed above, the me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es may not be available on the databases at the time of filing of returns of income by taxpayers; A comparable may fail to clear a quantitative filter in any one out of the three years; and A comparable may have commenced operations only in the last two years or may have closed down operations during the current year. the use of data of two out of relevant three years shall be permitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stakeholders and general public on the above draft scheme are invited. The comments and suggestions may be submitted by 31 st May, 2015 at the email address ( dirtpl1@nic.in or by post at the following address with Comments on draft transfer pricing rules written on the envelop: Director (Tax Policy Legislation)-I Central Board of Direct Taxes, Room No. 147-D, North Bloc ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
