| COURT: | ITAT Delhi |
| CORAM: | C. M. Garg (JM), R. S. Syal (AM) |
| SECTION(S): | 56(2)(viib), 92, 92B |
| GENRE: | Transfer Pricing |
| CATCH WORDS: | ALP, share application money, share premium, Transfer Pricing |
| COUNSEL: | H. P. Agarwal |
| DATE: | June 4, 2015 (Date of pronouncement) |
| DATE: | August 18, 2015 (Date of publication) |
| AY: | 2008-09 |
| FILE: | Click here to view full post with file download link |
| CITATION: | |
| Transfer Pricing: The allotment of shares/ receipt of share application money by the assessee from the AE for a price less than the book value of the shares cannot be regarded as a “deemed loan” by the assessee to the AE and notional interest cannot be imputed thereon | |
Though the international transaction on capital account per se cannot call for any addition on account of transfer pricing adjustment because of the absence of any provision under the Act charging income from such transactions, but the transactions flowing out of such original transaction on capital account, having impact on the profitability of the assessee, would be required to pass the mandate of Chapter-X of the Act. In other words, if such offshoot transactions of the original transaction on capital account, such as, interest or depreciation are not at arm’s length price, then it is mandatory to determine their ALP and make addition, if any, on account of transfer pricing adjustment
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