Arm's length price rules: prescribed selection of method and AO power to determine adjustments to taxable income. Determination of the arm's length price is by specified methods with the most appropriate method chosen based on transaction character and prescribed factors; a single method result governs subject to a notified tolerance, while multiple results are resolved as prescribed. The Assessing Officer may determine the arm's length price during assessment if records are missing, unreliable, or prescribed methods were not applied, but must issue a show cause notice before doing so; the Officer may then recompute total income and certain deductions are disallowed on income enhanced by such recomputation.
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Arm's length price rules: prescribed selection of method and AO power to determine adjustments to taxable income.
Determination of the arm's length price is by specified methods with the most appropriate method chosen based on transaction character and prescribed factors; a single method result governs subject to a notified tolerance, while multiple results are resolved as prescribed. The Assessing Officer may determine the arm's length price during assessment if records are missing, unreliable, or prescribed methods were not applied, but must issue a show cause notice before doing so; the Officer may then recompute total income and certain deductions are disallowed on income enhanced by such recomputation.
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