India: Transfer pricing rules apply if counterparty becomes associated enterprise in same tax year (tribunal decision)

Bengaluru Bench of the Income-tax Appellate Tribunal

Counterparty becomes associated enterprise in same tax year

The Bengaluru Bench of the Income-tax Appellate Tribunal held that a transaction with an unrelated entity is subject to the transfer pricing regulations if the entity becomes an associated enterprise in the same tax year.

The tribunal also held that a transfer of shares on a stock exchange cannot be equated with a transfer of shares involving controlling interest and that the discounted cash flow method used by the tax authority was appropriate for the valuation of listed equity shares.

The case is: Palmer Investment Group Limited

Read a March 2023 report [PDF 310 KB] prepared by the KPMG member firm in India 


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