TaxTMI 
TaxTMI 
TaxTMI 
Income-tax (16th Amendment), Rules, 2015
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....ely:- "Provided further that the first proviso shall not apply while analysing the comparability of an uncontrolled transaction with an international transaction or a specified domestic transaction, entered into on or after the 1st day of April, 2014."; (ii) after sub-rule (4), the following sub-rule shall be inserted, namely:- "(5) In a case where the most appropriate method for determination of the arm's length price of an international transaction or a specified domestic transaction, entered into on or after the 1st day of April, 2014, is the method specified in clause (b), clause (c) or clause (e) of sub-section (1) of section 92 C , then, notwithstanding anything contained in sub-rule (4), the data to be used for analysing the comparability of an uncontrolled transaction with an international transaction or a specified domestic transaction shall be,- (i) the data relating to the current year; or (ii) the data relating to the financial year immediately preceding the current year, if the data relating to the current year is not available at the time of furnishing the return of income by the assessee , for the assessment year relevant to the current y....
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....period preceding it shall be included in the dataset instead of the price referred to in sub-rule (1): Provided further that in a case referred to in clause (ii) of sub-rule (5) of rule 10B, where the comparable uncontrolled transaction has been identified on the basis of the data relating to the financial year immediately preceding the current year and the enterprise undertaking the said uncontrolled transaction, [not being the enterprise undertaking the international transaction or the specified domestic transaction referred to in sub-rule (1)], has in the financial year immediately preceding the said financial year undertaken the same or similar comparable uncontrolled transaction then, - (i) the price in respect of such uncontrolled transaction shall be determined by applying the most appropriate method in a similar manner as it was applied to determine the price of the comparable uncontrolled transaction undertaken in the financial year immediately preceding the current year; and (ii) the weighted average of the prices, computed in accordance with the manner provided in sub-rule (3) , of the comparable uncontrolled transactions undertaken in the aforesaid period of two y....
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....;s length range beginning from the thirty-fifth percentile of the dataset and ending on the sixty-fifth percentile of the dataset shall be constructed and the arm's length price shall be computed in accordance with sub-rule(5) and sub-rule (6). (5) If the price at which the international transaction or the specified domestic transaction has actually been undertaken is within the range referred to in sub-rule (4), then, the price at which such international transaction or the specified domestic transaction has actually been undertaken shall be deemed to be the arm's length price. (6) If the price at which the international transaction or the specified domestic transaction has actually been undertaken is outside the arm's length range referred to in sub-rule (4), the arm's length price shall be taken to be the median of the dataset. (7) In a case where the provisions of sub-rule (4) are not applicable, the arm's length price shall be the arithmetical mean of all the values included in the dataset: Provided that, if the variation between the arm's length price so determined and price at which the international transaction or specified domestic transacti....
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....ator (PLI) used in applying the most appropriate method is operating profit as compared to operating cost (OP/OC). The weighted average shall be based upon the weight of OC as computed below: Sl. No. Name Year 1 Year 2 Year 3 [Current Year] Aggregation of OC and OP Weighted Average 1 2 3 4 5 6 7 1 A OC = 100 OP = 12 OC = 150 OP = 10 OC = 225 OP = 35 Total OC = 475 Total OP = 57 OP/OC = 12% 2 B OC = 80 OP = 10 OC = 125 OP = 5 OC = 100 OP = 10 Total OC = 305 Total OP = 25 OP/OC = 8.2% 3 C OC = 250 OP = 22 OC = 230 OP = 26 OC = 250 OP = 18 Total OC = 730 Total OP = 66 OP/OC = 9% 4 D OC = 180 OP = (-)9 OC = 220 OP = 22 OC = 150 OP = 20 Total OC = 550 Total OP = 33 OP/OC = 6% 5 E OC = 140 OP = 21 OC = 100 OP = (-) 8 OC = 125 OP = (-) 5 Total OC = 365 Total OP = 8 OP/OC = 2.2% 6 F OC = 160 OP = 21 OC = 120 OP = 14 OC = 140 OP = 15 Total OC = 420 Total OP = 50 OP/OC = 11.9 % 7 G OC = 150 OP = 21 OC = 130 OP = 12 OC = 155 OP = 13 Total OC = 435 Total OP = 46 OP/OC = 10.57 From the above, the dataset will be constructed as follows: S.I. No. 1 2 3 4 5 6 7 Values 2.....
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....omparable uncontrolled transactions in earlier years as detailed in the table, the weighted average and dataset shall be computed as below: Sl. No. Name Year 1 Year 2 Year 3 [Current Year] Aggregation of OC and OP Weighted Average 1 2 3 4 5 6 7 1 A OC = 100 OP = 12 OC = 150 OP = 10 OC = 225 OP = 35 Total OC = 475 Total OP = 57 OP/OC = 12% 2 B OC = 80 OP = 10 OC = 125 OP = 5 Total OC = 205 Total OP = 15 OP/OC = 7.31% 3 C OC = 250 OP = 22 OC = 230 OP = 26 OC = 250 OP = 18 Total OC = 730 Total OP = 66 OP/OC = 9% 4 D OC = 220 OP = 22 Total OC = 220 Total OP = 22 OP/OC = 10% 5 E OC = 100 OP = (-) 5 Total OC = 100 Total OP = (-)5 OP/OC = (-)5% 6 F OC = 160 OP = 21 OC = 120 OP = 14 OC = 140 OP = 15 Total OC = 420 Total OP = 50 OP/OC = 11.9 % 7 G OC = 150 OP = 21 OC = 130 OP = 12 OC = 155 OP = 13 Total OC = 435 Total OP = 46 OP/OC = 10.57% From the above, the dataset will be constructed as follows: S.I. No. 1 2 3 4 5 6 7 Values (-)5% 7.31% 9% 10% 10.57% 11.9% 12% If during the course of assessment proceedings, the data of the current year is available and the use of su....