What moved in transfer pricing
and international tax today

The Income Tax Appellate Tribunal (ITAT) Delhi rejected a transfer pricing adjustment on Bacardi's Advertising, Marketing, and Promotion (AMP) expenses, ruling they do not constitute an international transaction without an Associated Enterprise (AE) arrangement. This significant decision clarifies the scope of transfer pricing applicability to AMP expenditures and related brand intangibles in India.

The Indian Income Tax Appellate Tribunal (ITAT) ruled that the Berry Ratio was inapplicable for a jewellery manufacturer, leading to the deletion of Rs. 105.06 Crore in transfer pricing adjustments. This decision highlights the importance of selecting appropriate transfer pricing methods based on the specific industry and functional profile of the taxpayer.

The Income Tax Appellate Tribunal (ITAT) Bangalore ruled to exclude high-turnover companies as comparables for software transfer pricing, directing a fresh examination of margins and working capital adjustments. This decision underscores the critical importance of functional and turnover comparability in selecting appropriate benchmarks for transfer pricing analysis in India.

The Income Tax Appellate Tribunal (ITAT) Bangalore excluded six transfer pricing comparables for ITeS companies and remanded two others for re-evaluation. The ruling emphasizes the necessity of rigorous comparability analysis in determining arm's length pricing for services in India.

The Income Tax Appellate Tribunal (ITAT) Pune excluded SPI Technologies, AGS Health, and Infosys BPO as comparables in a ₹2.09 Crore transfer pricing dispute for AY 2015-16. The exclusions were based on factors like merger activity, related party transactions (RPTs), and turnover differences, reinforcing strict comparability criteria in India.

The Income Tax Appellate Tribunal (ITAT) Pune remanded a transfer pricing adjustment for Raymond Fasteners, permitting the application of the gross-margin method under Rule 10AB. This ruling provides guidance on the selection of appropriate transfer pricing methods under Indian tax regulations and limits adjustments to arm's length transactions.

The Income Tax Appellate Tribunal (ITAT) Delhi directed a transfer pricing recalculation for Organica Water, mandating the use of audited segmental accounts and excluding four diversified engineering comparables. This decision underscores the importance of precise financial segmentation and strict comparability in Indian transfer pricing assessments.

The Income Tax Appellate Tribunal (ITAT) Bangalore ruled that functionally comparable companies should not be excluded from transfer pricing analysis solely due to the absence of data in databases. This decision highlights the paramount importance of functional comparability over data availability for software comparables in India, while also addressing delayed receivables interest for AY 2021-22.

The Income Tax Appellate Tribunal (ITAT) Mumbai granted relief to Asus India regarding dealer discounts and transfer pricing adjustments. This ruling addresses the non-liability of dealer rebates on principal-to-principal sales to TDS and remands the issue of defective-product rebates.

The Income Tax Appellate Tribunal (ITAT) Mumbai deleted TDS disallowances on Asus India's dealer discounts and also deleted a ₹56.33 lakh transfer pricing adjustment. The ruling affirmed that dealer discounts are not liable to TDS under Section 194H, while remanding the issue of defective-product rebates.

The Income Tax Appellate Tribunal (ITAT) Mumbai deleted transfer pricing adjustments for Rabobank, ruling that bank guarantee rates require functional comparability before any adjustment can be made. This decision underscores the importance of a detailed functional analysis when benchmarking intra-group financial guarantees in India.

The Income Tax Appellate Tribunal (ITAT) Bangalore deleted a notional interest adjustment for Dotgo, finding that AE advances used to settle receivables did not warrant such an adjustment. The ruling also touched upon marketing costs, bank charges, and software comparables, providing multifaceted guidance on intra-group transactions in India for AY 2021-22.

A former IRS Director, Mr. Wall, has joined DLA Piper's international tax team, enhancing their expertise in global tax matters. This move signifies increased focus on international tax advisory services, including potential transfer pricing implications, for the firm's clients.

This article discusses the evolving landscape of transfer pricing in China, suggesting that what was once a market premium may now be a discount. It analyzes the implications for multinational corporations and their intra-group transaction valuations within the Chinese jurisdiction.