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Transfer-pricing adjustments were properly confined to...
Transfer-pricing adjustments must be confined to international associated-enterprise transactions, while functionally dissimilar comparables remain excluded from benchmarking.
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Transfer-pricing adjustments were properly confined to international transactions involving import of raw materials from associated enterprises, as the arm's-length price mechanism applies to those transactions; the restriction was upheld. Functional differences in products, manufacturing activities and raw materials justified exclusion of a proposed comparable, and the High Court declined to reappraise that factual finding under section 260-A. Working-capital adjustment was remitted for verification because supporting particulars had not initially been furnished, with no final determination of entitlement or amount. The foreign-exchange revenue filter was also remitted for reconsideration under a consistent approach after giving the assessee an opportunity. Revenue appeals were dismissed.
Transfer-pricing adjustments were properly confined to international transactions involving import of raw materials from associated enterprises, as the arm's-length price mechanism applies to those transactions; the restriction was upheld. Functional differences in products, manufacturing activities and raw materials justified exclusion of a proposed comparable, and the High Court declined to reappraise that factual finding under section 260-A. Working-capital adjustment was remitted for verification because supporting particulars had not initially been furnished, with no final determination of entitlement or amount. The foreign-exchange revenue filter was also remitted for reconsideration under a consistent approach after giving the assessee an opportunity. Revenue appeals were dismissed.
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