Court : Income Tax Appellate Tribunal ITAT Delhi
..... which is sought to be manipulated. the relevant provisions of the act are patterned on the oecd guidelines1995. these provisions are erosion of indian tax base by multi-nationals through a mechanism of what is known as "transfer pricing" . in a modern democratic set up, the governments - local, state or central - are modified ..... with its foreign ae for advertising the brand of the later, which is nothing but an implied transaction. 9.6. he argued that the united nations transfer pricing manual provides for the allocation of such cost of market penetration, marketing expansion and market maintenance strategies between a mne and its subsidiaries ..... goal, the treaty warrants the stability of tax burden, so that its provisions may not be abused by multi-national enterprises (mnes) by fixing prices, terms and conditions of transactions between their controlled enterprises located in different jurisdictions. the treaty requires that such transactions be dealt with as if they are between unrelated .....
Tag this Judgment!Court : Income Tax Appellate Tribunal ITAT Delhi
..... the taxpayer. it is a matter of common knowledge that advertisement carried on t.v and other media have worldwide effect and multi national companies enter into such cross border arrangements.such special circumstances, as would entitle the revenue to disregard and treat the reimbursement as ..... thereafter, functional analysis is carried to identify functions, risk and assets of uncontrolled transactions and comparison is carried with characteristics of the controlled transaction. this is necessary to find whether comparable selected are really comparable and reliable. comparison based on functional analysis include economically significant activities ..... when analyzing the transactions between independent enterprises to the extent they are needed, profits attributable to transactions that are not similar to the controlled transactions under examination should be excluded from the comparison. (oecd guidelines 3.42). this statement is sometimes interpreted as prohibiting the company-wide .....
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