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India - The Bombay High Court Decides Whether the CUP Method Can Be Applied to Customized Goods

Country:
India
Author:
V.T. Patel; S. Dhoot
Issue:
International Transfer Pricing Journal, 2018 (Volume 25), No 4
Published:
2 July 2018
In its ruling in Amphenol Interconnect India (P.) Ltd., the Bombay High Court affirms the action of the Pune Income-Tax Appellate Tribunal that the transaction net margin method is the most appropriate method for determining the arm’s length price relating to the transactions of export/import of goods and payment of commission by the taxpayer with its associated enterprises. The comparable uncontrolled price method applied by the transfer pricing officer had been rejected because the goods are customized and differences due to e.g. geographical location, order volume and different market conditions exist. The High Court thus dismissed the appeal of the revenue authorities.
 
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