Tax avoidance through foreign branches prompts transfer pricing scrutiny and mandatory reporting to tax authorities. Commissioners of Income tax must investigate Indian companies' foreign branches, liaison offices, or subsidiaries to detect escapement of income, obtain up to date lists from the Reserve Bank of India where necessary, and apply transfer pricing scrutiny when computing income arising from transactions between residents and non residents; findings of escapement and detailed factual reports on modus operandi and tax effect are to be reported to the Board for review.
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Provisions expressly mentioned in the judgment/order text.
Tax avoidance through foreign branches prompts transfer pricing scrutiny and mandatory reporting to tax authorities.
Commissioners of Income tax must investigate Indian companies' foreign branches, liaison offices, or subsidiaries to detect escapement of income, obtain up to date lists from the Reserve Bank of India where necessary, and apply transfer pricing scrutiny when computing income arising from transactions between residents and non residents; findings of escapement and detailed factual reports on modus operandi and tax effect are to be reported to the Board for review.
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