Domestic transfer pricing

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This query is : Resolved

Rajkumar (Querist)

17 November 2012 Is capital assets sale and purchase covered or only revenue income or expenditure is currently subjected for DTP

SANJAY TALATI

SANJAY TALATI (Expert)

19 November 2012 Sec. 92BA provides for the applicability of the Transfer Pricing Regulations to certain Domestic Transactions between the related residnt parties for the purpose of computation of income, disallowance of expenses etc.

The provision has been inserted to avoid the practices of claiming the excessive deductions by the unit enjoying the Tax Holiday, by claiming the excess expenditures in respect of the transactions with the related parties etc.

As per the present provisions of Sec. 92BA, it can be concluded that the Specified Domestic Transactions covers only the transactions of income and expenditure and not the assets and liabilities.

CA. Anuj Gupta

CA. Anuj Gupta (Expert)

10 November 2013 There is a lack of clarity on the issue, however my personal feeling is that capital asset purchased on which depreciation is being claimed should be reported in Audit Certificate under Transfer Pricing.

Anuj
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