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Querist : Anonymous

Querist : Anonymous (Querist)

29 April 2013 if x is group of companies and y is one private co under group of co.can be x sold goods to y and y purchased goods from x.

Dr. Rashid Mehmood, CPA, Ph.D

Dr. Rashid Mehmood, CPA, Ph.D (Expert)

30 April 2013 Yes, this is normal practice and nothing wrong in it. only the thing you have to consider that every transaction among the subsidiaries or associated companies should be on arm's length i.e. the seller should treat the buyer as normal customer and no hidden benefit should be available to buyer. if the seller company is selling the goods and services to the buyer within the group the price of the goods and services should be offered in similar manner as to the other customers in the open market. the buyer should also behave in the same way as it is dealing with the other suppliers.

Querist : Anonymous

Querist : Anonymous (Querist)

30 April 2013 thank you for reply.it is help to both copmany of tax benefit and easy profit sharing

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

C A S.S.Agarwal, M.Com.,LL.B, (Expert)

12 June 2013 Yes I agree with the expert. In Income Tax you can sale and ourchase of anything at any rate with any group company but this restricion has been brought in by the finance act 2013 and if any false of transaction below the market rate is entered into then the problem will arise and the domestic transfer pricing will be applicable.

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