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 taxmann.com 197, has provided some significant and positive guidance on transfer pricing issue arising from business restructuring.