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Transfer pricing deals: Compulsory scrutiny limit tripled to Rs 15 cr.

The CBDT vide instruction no. 10/2013 dated August 5, 2013, have further relaxed the monetary limit for selection of TP cases for compulsory scrutiny. Under the new instructions, the following categories of cases/returns shall be compulsorily scrutinised:

– Cases where value of international transaction as defined u/s 92B of Income-tax Act exceeds Rs 15 crore.

– Cases involving addition in an earlier assessment year on the issue of TP in excess of Rs 10 crore which is confirmed in appeal or is pending before an appellate authority.

It may be clarified here that the limit of Rs 15 crore for selection of TP cases for scrutiny was prevailing earlier also. But the said limit was only by way of internal instructions.

The above relaxation made by the government will certainly help a large number of tax payers who are involved in international transactions. In this context CBDT is also requested to find an appropriate mechanism so as to reduce the element of time in settling TP disputes. It will be recalled that creation of Dispute Resolution Panel (DRP) for expeditious disposal of TP cases has not fulfilled its objective.