Determination of arm's length price in certain cases

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....uncontrolled transaction, in either or both of the two financial years immediately preceding the current year, then, - (i) the price in respect of such transaction in such year (or years) shall be determined by applying the most appropriate method in the similar manner as applied in the current year; and (ii) the weighted average of such prices, as computed under sub-rule (5), shall be included in the dataset under sub-rule (2) instead of price referred to in sub-rule (1); (b) the financial year immediately preceding the current year (if the data relating to current tax year is not available at the time of furnishing return of income for that year), and the said enterprise has undertaken the same or similar comparable uncontrolled transaction in the financial year immediately preceding the two financial years, then- (i) the price in respect of such transaction shall be determined by applying the most appropriate method in the similar manner as it was applied in the financial year immediately preceding the current year; and (ii) the weighted average of such prices, as computed under sub-rule (5), shall be included in the dataset under sub....

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....e price at which such transaction has actually been undertaken, if the variation between the arm's length price so determined and the price at which the international transaction or the specified domestic transaction has actually been undertaken does not exceed such percentage, not exceeding 3% of the latter, as may be notified in this behalf by the Central Government. (8) For the purposes of this rule, - (a) "median" of the dataset, having values arranged in an ascending order, shall be - (i) the lowest value in the dataset where at least 50% of the values are less than or equal to it; or (ii) the arithmetic mean of such lowest value and the value immediately succeeding it in the dataset, if the number of all values that are equal to or less that the aforesaid value is a whole number; (b) (i) "35th percentile" of a dataset, having values arranged in an ascending order, shall be - (A) the lowest value in the dataset such that at least 35% of the values included in the dataset are equal to or less than such value; or (B) the arithmetic mean of such lowest value and the value immediately succeeding it in the dataset, if the number of all v....

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.... Total OP = 8   6. F OE = 160 OE= 120 OE = 140 Total OE = 420 OP/OE = 11.9% OP = 21 OP = 14 OP = 15 Total OP = 50   7. G OE = 150 OE = 130 OE = 155 Total OE = 435 OP/OE = 10.57% OP = 21 OP = 12 OP = 13 Total OP = 46   From the above, the dataset will be constructed by arranging the weighted average values of PLI in an ascending order as follows: Sl. No. 1 2 3 4 5 6 7 Values 2.2% 6% 8.2% 9% 10.57% 11.9% 12% For deriving the arm's length range, the data place of 35th and 65th percentile shall be computed in the following manner: Total number of data points in dataset x (35/100) Total number of data points in dataset x (65/100) Thus, the data place of the 35th percentile = 7 x 0.35 = 2.45. Since this is not a whole number, the next higher data place, that is, the value at the 3rd place would have at least 35% of the values below it. The 35th percentile, is therefore, value at the 3rd place, that is, 8.2%. The data place of the 65th percentile is = 7 x 0.65 = 4.55. Since this is not a ....

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.... of non- associated enterprise Year 1 Year 2 Year 3 [Tax Year] Aggregation of OE and OP Weighted Average PLI 1 2 3 4 5 6 7 1 A OE = 100 OE = 150 OE = 225 Total OE = 475 OP/OE = 12% OP = 12 OP = 10 OP = 35 Total OP = 57   2 B OE = 80 OE = 125 Data not available Total OE = 205 OP/OE= 7.31% OP = 10 OP = 5   Total OP = 15   3 C OE = 250 OE = 230 OE = 250 Total OE = 730 OP/OE = 9% OP = 22 OP = 26 OP = 18 Total OP = 66   4 D Data not available OE = 220 Data not available Total OE = 220 OP/OE = 10%   OP = 22   Total OP = 22   5 E Data not available Data not available OE = 125 Total OE = 125 OP/OE = (-) 4%     OP = (-) 5 Total OP = (-)5   6 F OE = 160 OE = 120 OE = 140 Total OE = 420 OP/OE = 11.9% OP = 21 OP = 14 OP = 15 Total OP = 50   7 G OE = 150 OE = 130 OE = 155 Total OE = 435 OP/OE= 10.57% OP = 21 OP = 12 OE = 13 Total OP = 46   From the a....