Monday, March 7, 2011

Transfer Pricing impact of business restructuring-Analysis of recent ruling of Bangalore Tribunal

In this highly competitive world, Multinational Enterprises (MNE’s) regularly restructure their business to improve efficiency and profitability. Such restructuring within MNE group results in number of tax and transfer pricing issues. Indian Transfer Pricing Regulation in its present form does not contain any specific provision dealing with transfer pricing impact of business restructuring. The resent ruling of Bangalore Tribunal in the case of Intel Asia Electronics Inc. v. Asstt. DIT[2011]9 197, has provided some significant and positive guidance on transfer pricing issue arising from business restructuring.

Tuesday, March 1, 2011

POA theory is less than circumstantial-Hersh W. Chadha Case

In the recent case of Hersh W. Chadha v. Dy. DIT [2011] 43 SOT 544, the Delhi Tribunal has held that where it is hard to unearth direct evidence or demonstrative proof, circumstantial evidence and its appreciation thereof would acquire importance. The Tribunal adopted this method of circumstantial evidence in order to curb out the tax dogging and making tax dodgers answerable and accountable. The same decision has been taken up for discussion here.