Transfer Pricing adjustment sustained for unilateral loan write off, while R&D costs allowed as ordinary business expenditure.

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....The article analyses an appellate tribunal decision rejecting a unilateral loan write off to a wholly owned subsidiary as a deductible bad debt or business loss, applying transfer pricing principles and surrounding circumstance tests to sustain a transfer pricing adjustment and disallow the write off for lack of commercial substance. It finds weighted R&D deduction unavailable for want of mandatory administrative concurrence, but accepts the same expenditures as ordinary business expenditure. An ad hoc apportionment denying an industrial undertaking deduction was deleted under the consistency principle. Imputed interest on interest free advances was deleted on proof of interest free funds.....