Transfer pricing treatment of idle capacity, comparables,...

Transfer pricing treatment of idle capacity, comparables, segmental results and customs duty requires fresh examination using cost-audit data, customer agreements, available comparability material and supporting evidence. Provision write-backs and miscellaneous receipts may remain operating items where the original provisions were operating expenses, subject to verification; where business support income is non-operating, corresponding costs must also be excluded from margins. Exchange loss on borrowings for domestic capital assets after the asset is put to use is revenue in character, as section 43A applies to assets acquired outside India. Software applications qualify for computer-rate depreciation, and secondment reimbursements of actual salary costs are not fees for technical services where employees work under the recipient's control and salary tax is deducted.