Dear Readers, We are pleased to present the second fortnightly TransPrice edition for the period 15th - 31st January 2016. The newsletter provides a round-up of key transfer pricing developments in India. Further, the newsletter gives snapshot of the significant case laws pronounced and its implications and also provides information on the latest happenings in India. We hope you find this newsletter both timely and useful, and we look forward to your feedback and suggestions to improve it further. You can write to us at akshaykenkre@transprice.in Happy Reading!!!

1. TransPrice Times
Edition: 15th
- 31st
January 2016
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Pan India Network Infravest Pvt
Ltd - ITAT - Mumbai
Outcome: In favour of taxpayer
Category: Notional Interest adjustment
It is held that the transaction of share application
money given to Associated Enterprise (AE) by the
taxpayer cannot be characterised as loan
transaction and no notional interest is chargeable
on such amount. Reference was placed on the
decision of Bharti Airtel Limited, which was
decided on similar lines.
Johnson & Johnson Limited - ITAT
- Mumbai
Outcome: In favour of taxpayer
Category: Marketing Intangible
The Tax Court held that the ‘Bright Line Test’ (BLT)
has no statutory mandate and therefore it cannot
be used as most appropriate method to
benchmark the transaction of Advertisement,
Marketing and Promotion.
Accordingly, the Tax Court remanded the issue
back to the file of TPO and directed TPO to apply
all the principles as laid down in Delhi HC ruling in
Maruti Suzuki India.
Johnson Controls (India) Pvt Ltd -
ITAT - Mumbai
Outcome: In favour of taxpayer
Category: Indenting transactions
With respect to benchmarking of commission
income for provision of indenting services to its AE,
it is held that Comparable Uncontrolled Price
method is the most appropriate method.
Further, with regards to the rate of commission to
be treated as Arm’s Length Price (ALP), it is held
that 3.63 per cent is the appropriate rate to be
considered as ALP.
Recent News:
Central Board Direct Tax finalizes first 2 bilateral
APAs with UK with regards to brand royalty and
management charges
Updated UN Transfer Pricing Manual expected in
October 2016; Indicates consistency with Base
Erosion and Profit Shifting (BEPS) outcome
IT Simplification Committee
propounds “Income Computation
and Disclosure Standards” (ICDS)
deferral
IT Simplification Committee releases 78 pages
report (part-1) containing draft recommendations
for various stakeholders; keeping in view the
complexity of law and mandate of the Committee.
The Simplification Committee recommends
deferment of ICDS in order to provide more time
to taxpayers grappling with regulatory changes.
Indo-US Framework Agreement
paves way for 100+ Mutual
Agreement Procedures (MAP)
closures
Over 100 MAP cases resolved in last one year
pursuant to landmark Framework Agreement
between India and USA under the MAP provisions
of India- USA DTAA.
30+ countries to sign multilateral
agreement
More than 30 countries to sign Multilateral
Agreement which will facilitate automatic
exchange of Country -by- Country reporting.