Transfer pricing comparables and operating income principles applied to software development services, with exclusions, inclusions, and tax credit ver...
Transfer pricing on performance guarantees and overdue receivables deleted where warranty obligations were embedded and working capital adjustment alr...
Where inter-company loans are advanced to subsidiary entities under the assessee's management and control, a higher arm's length interest rate is not justified merely because the loans are unsecured or the subsidiaries have a weaker credit profile. The Tribunal applied the principle noted in Bharti Airtel Limited and held that control over the subsidiary reduces, rather than increases, lending risk. It also found that the earlier accepted interest rates for the USA and Netherlands entities had not been disturbed in prior years and no fresh material showed any change in risk profile. The transfer pricing adjustment to the arm's length price of interest was therefore deleted.
Where inter-company loans are advanced to subsidiary entities under the assessee's management and control, a higher arm's length interest rate is not justified merely because the loans are unsecured or the subsidiaries have a weaker credit profile. The Tribunal applied the principle noted in Bharti Airtel Limited and held that control over the subsidiary reduces, rather than increases, lending risk. It also found that the earlier accepted interest rates for the USA and Netherlands entities had not been disturbed in prior years and no fresh material showed any change in risk profile. The transfer pricing adjustment to the arm's length price of interest was therefore deleted.
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