Import of capital goods Vs. applicability of transfr pricing

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Guest

Guest (Querist)

27 June 2011 Whether the provision of transfer pricing will be applicable on the transaction of import of capital goods(for own project)?

whether answer will remain same if the same are imported @ inflated prices?

If yes then why?

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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27 June 2011 Transfer pricing is applicable when the purchase is from the closely held companies or where under invoicing or over invoicing is done.

Guest

Guest (Querist)

27 June 2011 In my question you can considered that both seller and buyer both are related party.

Further i also learned that the transfer pricing provisions will be applicable only when there is effect on profit or loss of the company.

while capital goods will have effect on the p&l of the company in the form of depreciation only.