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TMI BlogDraft scheme of the proposed rules for computation of Arm’s Length Price (ALP) of an International Transaction or Specified Domestic Transaction undertaken on or after 01.04.2014X X X X Extracts X X X X X X X X Extracts X X X X ..... t scheme of the proposed rules for computation of Arm's Length Price (ALP) of an International Transaction or Specified Domestic Transaction undertaken on or after 01.04.2014. Section 92C of the Income Tax Act, 1961 (the "Act") provides for computation of Arm's Length Price (ALP) of an international transaction or specified domestic transaction. 2. The Finance Minister in his Budget speech, whil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... escribed. 3. Therefore, the manner of computation of ALP is proposed to be provided through the amendment of Income-tax Rules. The proposed mechanism and conditions under which the multiple year data and 'range' concept would be used for determination of ALP shall be as under: - A. Adoption of the Range Concept i. The 'Range' concept shall be used only in case the method used for determination ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld be aggregated for all the years for every comparable entity and the margin would be computed thereafter; and d) The data points lying within the 40th to 60th percentile of the data set of series would constitute the range. iii. If the transfer price of the tested party falls outside the range as constructed above, the median of the range would be taken as ALP and adjustment to transfer pric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me by taxpayers; * A comparable may fail to clear a quantitative filter in any one out of the three years; and * A comparable may have commenced operations only in the last two years or may have closed down operations during the current year. the use of data of two out of relevant three years shall be permitted. iv. The data of the current year, however, can be used during the transfer pric ..... X X X X Extracts X X X X X X X X Extracts X X X X
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