Aztec Software case
The court held that though there are no guidelines as to what threshold should be used for inquiring into comparables and related party transactions but the court tried and interpreted the act itself to find a solution. The definition of associated enterprise as in Section 92 A (2) (b) which prescribes that in case a company owns 26% of the shares of a company it would be deemed to be an associated enterprise, also Section 40 A(2)(b) states that any person who carries more than 20% of the voting power of the company is defined as a person having a substantial interest in the company. Therefore interpreting the two provisions harmoniously the court said that 25% would a good estimated limit to check whether a certain comparable have related party transaction should be rejected.
1 comments:
Transfer pricing is a great way to move goods from one company division or department to another without generating a lot of postings on the Accounts Receivable and Accounts Payable books.One party transfer to another goods or services that price is known as transfer price.
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