| Question And Answer | |
|---|---|
| Subject: | Domestic Transfer Pricing |
| Category: | Income-Tax |
| Querist: | CA Govind Agrawal |
| Answered by: | Advocate Neelam Jadhav |
| Tags: | Domestic Transfer Pricing, Firm, Transfer pricing |
| Date: | September 3, 2023 |
Queries Regarding Domestic Transfer Pricing
Case A
1. A partnership firm(having ‘A’ as Karta of his HUF and ‘B’ his wife as partners) is doing the business of Purchase and Sales of Grains in wholesale and semi-wholesale.
2. Total Turnover during F.Y. 2022-23 is more than Rs.20crore.
3. The assessee firm has also sold goods during the above F.Y. to a concern( in which proprietor is son of Mr. ‘A’)
4. The sales made to above concern during above F.Y. is more than Rs.20crore.
5. Whether provisions of Domestic Transfer Pricing Audit are applicable on the above partnership firm?
Case B
1. A proprietorship concern of Mr. ‘C’ is doing the business of Purchase and Sales of Grains in wholesale and semi-wholesale.
2. Total Turnover during F.Y. 2022-23 is more than Rs.20crore
3. The assessee concern has made purchases of more than Rs. 20crore from the above partnership firm.
4. The assessee concern has sold goods to a concern in which his father is proprietor.
5. The sales made to above concern during above F.Y. is less than Rs.20crore.
6. Whether provisions of Domestic Transfer Pricing Audit are applicable on the above proprietorship concern?
The querist is a partnership firm consisting Husband ‘A’ as Karta and ‘B’ his wife as partners) is doing the business of Purchase and Sales of Grains in wholesale and semi-wholesale. During the year the turnover is more than 20 Crores. However, the Partnership firm is not eligible for domestic transfer pricing audit. As the querist is not fall under Specified Domestic Transaction (SDT).
Specified Domestic Transaction means any of the transactions not being an international transaction, namely:
(1) any transaction referred to in Section 80A;, (2) any transfer of goods or services referred to in Section 80-IA(8);, (3) any business transacted between the assessee and other person as referred to in Section 80-IA(10); (4) any transaction, referred to in any other section under Chapter VI-A or Section 10AA, to which Section 80-IA(8) or Section 80-IA(10) are applicable; (5) any business transacted between the persons referred to in section 115BAB(6); or (6)any other transaction as may be prescribed (nothing prescribed as on date), and where the aggregate of such transactions exceeds a sum of INR 20 crore (Up to assessment year 2015-16, this threshold limit was INR 5 crore).
The provisions of Domestic Transfer Pricing will apply only when the transaction qualifies as a Specified Domestic Transaction ( SDT.)
Hence, whether the goods sold to Son’s concern or father’s concerns, provisions of Domestic Transfer Pricing will not applicable to the Assessee – Partnership Firm.