Audit & Assurance | Business Start up & Registration | Business Support | Tax Advisory | Management Consultancy | Visa Documentation | Project Syndication & Feasibility Studies

Wednesday, 31 December 2014

Wish you a Great, Prosperous, Blissful, Healthy,
Bright, Delightful, Energetic and Extremely
Happy New Year.


403, 4th Floor, Shyam Chabra Vihar,
Lane Opp. OBC Bank, S.D. Road

Wednesday, 3 December 2014

Companies (Amendment) Bill, 2014

Companies (Amendment) Bill, 2014
The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, today approved the introduction of the Companies (Amendment) Bill, 2014 in Parliament to make certain amendments in the Companies Act, 2013.
The Companies Act, 2013 (Act) was notified on 29.8.2013. Out of 470 sections in the Act, 283 sections and 22 sets of Rules corresponding to such sections have so far been brought into force. In order to address some issues raised by stakeholders such as Chartered Accountants and professionals, following amendments in the Act have been proposed:
1. Omitting requirement for minimum paid up share capital, and consequential changes. (For ease of doing business)
2.       Making common seal optional, and consequential changes for authorization for execution of documents. (For ease of doing business)
3.       Prescribing specific punishment for deposits accepted under the new Act. This was left out in the Act inadvertently. (To remove an omission)
4.       Prohibiting public inspection of Board resolutions filed in the Registry. (To meet corporate demand)
5.       Including provision for writing off past losses/depreciation before declaring dividend for the year. This was missed in the Act but included in the Rules.
6.       Rectifying the requirement of transferring equity shares for which unclaimed/unpaid dividend has been transferred to the IEPF even though subsequent dividend(s) has been claimed. (To meet corporate demand)

7.        Enabling provisions to prescribe thresholds beyond which fraud shall be reported to the Central Government (below the threshold, it will be reported to the Audit Committee). Disclosures for the latter category also to be made in the Board's Report. (Demand of auditors)
8.        Exemption u/s 185 (Loans to Directors) provided for bans to wholly owned subsidiaries and guarantees/securities on bans taken from banks by subsidiaries. (This was provided under the Rules but being included in the Act as a matter of abundant caution).

9.        Empowering Audit Committee to give omnibus approvals for related party transactions on annual basis. (Align with SEBI policy and increase ease of doing business)
10.       Replacing 'special resolution' with 'ordinary resolution' for approval of related party transactions by non-related shareholders. (Meet problems iaced by large stakeholders who are related parties)
11.       Exempt related party transactions between holding companies and wholly owned subsidiaries from the requirement of approval of non- related shareholders, (corporate demand)
12.       Bail restrictions to apply only for offence relating to fraud u/s 447. (Though earlier provision is mitigated, concession is made to Law Ministry & ED)
13.       Winding Up cases to be heard by 2-member Bench instead of a 3-member Bench. (Removal of an inadvertent error)
14.       Special Courts to try only offences carrying imprisonment of two years or more. (To let magistrate try minor violations).

Saturday, 18 October 2014

Order u/s 119 of the Income Tax Act, 1961, for extension of Due Date of Filing Return of Income for Tax Audit Cases

F.No.153/53/2014-TPL (Pt.I)
North Block, TPL Division
New Delhi, the 26th September, 2014
Order under section 119 of the Income-tax Act, 1961
Section 44AB of the Income-tax Act, 1961 („the Act‟) read with rule 6G of the Income-tax Rules, 1962 („the Rules‟) requires certain persons to file tax audit report in Form No.3CA/Form No.3CB along with prescribed particulars in Form No.3CD. Vide Notification No. 33/2014 dated 25th July, 2014, the forms for filing tax audit report have been revised. As per section 44AB of the Act, the tax audit report has to be obtained and furnished electronically by 30th November of the Assessment year in case of an assessee who is required to furnish report under section 92E of the Act and 30th September of the Assessment year in case of other assessees.
2. In view of the representations received by the Central Board of Direct Taxes („the Board‟), the due date for obtaining and furnishing of tax audit report under section 44AB of the Act for assessment year 2014-15 in respect of assessees who are not required to furnish report under section 92E of the Act has been extended from 30th September, 2014 to 30th November, 2014 vide Order No.133/24/2014-TPL dated 20th August, 2014 in exercise of power of the Board under section 119 of the Act. It has been further clarified that the tax audit report filed during the period from 01.04.2014 to 24.07.2014 in the pre-revised forms shall be treated as valid tax audit report under section 44AB.
3. After the extension of the due date for obtaining and furnishing of tax audit report under section 44AB of the Act, a number of representations have been received in the Board requesting for extension of due date for furnishing of return of income for the assessees who are required to obtain and furnish tax audit report under section 44AB of the Act and for whom the due date for furnishing return of income under section 139(1) of the Act is 30th September, 2014. Writ petitions have also been filed in various High Courts for directing the Board to extend the due date for furnishing of return of income from 30th September, 2014 to 30th November, 2014 in conformity with the extension of the due date for filing of tax audit report.
Page 2 of 3
4. In the High Court of Delhi, a writ petition No.5990/2014 has been filed on this issue. However, before the pronouncement of judgement, the petitioner withdrew the writ petition on 23rd September, 2014. The High Court of Madras passed interim order on 24.09.2014 in writ petitions No.25443 and 26306 to 26310 of 2014 and directed the Board to consider the request of the assessees in general and consider the extension of time for furnishing the return of income, in tune with the order passed by the Board in F. No.133/24/2014-TPL dated 20.08.2014. It has been reported that the High Court of Judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh disposed the writ petition No.28159 and 28627 of 2014 with a direction to the Board to dispose of the representation of the petitioners. The High Court of Bombay disposed of writ petition No.2492 of 2014 vide order dated 25.09.2014 and directed the Board to look into the practical difficulties of the petitioners and take a just and proper decision in this matter.
5. The Gujarat High Court allowed Special Civil Application No.12656 of 2014 with Special Civil Application No.12571 of 2014 and vide judgement dated 22.09.2014 directed the Board to modify the order under section 119 of the Act dated 20.08.2014 by extending the due date for furnishing the return of income to 30th November, 2014. It has also been further stated in the said order that it would be open for the Board to qualify such relaxation by extending the due date for all purposes, except for the purpose of Explanation 1 to section 234A of the Act.
6. In compliance to the judgement of High Court of Gujarat and after considering the representations made for extension of due date for furnishing of return of income in compliance with the directions of the other High Courts, the Board, in exercise of power conferred by section 119 of the Act, hereby extends, subject to para 7 below, the `due-date‟ for furnishing return of income from 30th September, 2014 to 30th November, 2014 for the assessment year 2014-15 for all purposes of the Act, in case of an assessee, who,
(i) is required to file his return of income by 30th September, 2014 as per clause (a) of Explanation 2 to sub-section (1) of section 139 of the Income-tax Act, 1961; and
(ii) is also required to get his accounts audited under section 44AB of the Act or is a working partner of a firm whose accounts are required to be audited under section 44AB of the Act.
7. There shall be no extension of the “due date” for the purposes of Explanation 1 to section 234A (Interest for defaults in furnishing return) of the Act and the assessees shall remain liable for payment of interest as per the provisions of section 234A of the Act.
Page 3 of 3
8. For removal of doubt, it is clarified that for an assessee (other than working partner of a firm which is required to obtain and furnish tax audit report), who is required to file its return of income by 30th September, 2014 but not required to obtain and furnish tax audit report under section 44AB, the due date for furnishing of return of income for assessment year 2014-15 remains as 30th September, 2014.
(Rajesh Kumar Bhoot)
Director (TPL)
Copy to:-
(i) The Chairman (CBDT), All Members, Central Board of Direct Taxes for information.
(ii) All Cadre Controlling Pr. Chief Commissioners of Income-tax with a request to circulate amongst all officers in their regions/charges.
(iii) The Pr. Director General of Income Tax (Admn.) Mayur Bhawan, New Delhi.
(iv) The Director General of Income Tax (Systems) with a request for uploading it on the Departmental website.
(v) Commissioner of Income Tax (M&TP), CBDT.
(Rajesh Kumar Bhoot)
Director (TPL)

Sunday, 14 September 2014

Deal with Stress - Relax your way to better health through Meditation

Deal with Stress before it deals with you through Transcendental Meditation
It’s our effort to introduce Meditation to busy Executives, COO& CEO’s of this Corporate World.

Bust the Stress
Fist published study on Meditation, Relaxation Response – Developed by Dr. Herbert Benson, Associate Professor of Medicine of Harward Medical School, in his book “The Relaxation Response” - Relax your way to better health.


  1. Sit in a comfortable position, so there is no undue muscle strain, and choose a quite environment with few distractions.  Avoid lying down; there is a tendency to fall asleep.

  1. Close your eyes.

  1. Deeply relax all your muscles, beginning at your feet and progressing up to your face.  Keep them relaxed.

  1. Breathe through your nose.  Become aware of your breathing.  As you breath out say a word “one” to your self.  For example breathe IN --- OUT, “one”, IN --- OUT, “one” etc.  Breathe easily and naturally.  The repetition of “ONE” helps break the train of distracting thoughts, attention to the normal rhythm of breathing enhances repetition.

  1. Continue for 10 to 20 minutes.  You may open your eyes to check the time, but do not use an alarm.  When you finish, sit quietly for several minutes, at first with your eyes closed and latter with your eyes opened. Do not stand up for a few minutes.

  1. Do not worry about, whether you are successful in achieving a deep level of relaxation.  Maintain a passive “let it happen”, attitude and permit relaxation to occur, at its own pace.  When, distracting thoughts occur, try to ignore them by not dwelling upon them and return to repeating “ONE”.  With practice the response should come with little effort.  Practice the technique once or twice daily, but not within two hours after any meal, since the digestive process seem to interfere with the elicitation of Relaxation Response.

The feelings accompanying the Relaxation Response vary among individuals.  The majority feel calm and relaxed.  A small percentage of people immediately become ecstatic. Others describe feeling of pleasure, refreshment, well being.

A word of caution – Many Meditation Organizations teaches that if a little meditation is good, a lot more is even better.  Our observation, how ever is that, many people who meditate several hours every day for weeks at a time tend to HALLUCINATE. But we have not noted any harmful side effects in people who bring fourth the Relaxation Response once or twice daily for 10 to 20 minutes.  A second word – The benefits of meditation will last only as long as you regularly bring fourth the Response.           

Saturday, 13 September 2014


o                      Basics about Transfer Pricing
o                      Terms and abbreviations used
o                      Objective of the Guidance note
o                      Applicability of the Provisions
o                       New developments like safe harbors & Advance Pricing Agreement



Responsibility of the Enterprises and Accountant

The obligation of an enterprise to keep and maintain records and documents vis-a-vis the duty of revenue authorities to verify about the compliance with the arm’s length principle has been succinctly stated by the OECD in their Transfer Pricing Guidelines:
       “Taxpayers should make reasonable efforts at the time the transfer pricing is established to determine whether the transfer pricing is appropriate for tax purposes in accordance with the arm’s length principle. Tax administrations should have the right to obtain the documentation prepared or referred to in this process as means of verifying compliance with the arm’s length principle. However, the extensiveness of this process should be determined in accordance with the same prudent business management principles that would govern the process of evaluating the business decision of a similar level of complexity and importance. Moreover, the need for the documents should be balanced by the costs and the administrative burdens, particularly where this process suggests the creation of documents that would not other wise be prepared or referred to in the absence of tax considerations. Documentation requirements should not impose on tax payers’ costs and burdens disproportionate to the circumstances, taxpayer should nonetheless recognize that adequate record keeping practices and production of documents facilitates examination and resolution of transfer pricing issues that arise”.



 Associated Enterprises

Examples are given of each point covered under the section 92A which is not given under the Income tax act, 1961.



International Transaction

a. Tangible Property defined in detailed manner (Transfer pricing regulation +OECD guidelines)
Tangible property has an existence in physical form. Any property other than tangible is intangible property. OECD guidelines include right to use industrial assets such as patents, trademarks, names, designs or models as intangible properties. It also includes literary and artistic property. OECD guidelines focus on “business rights” associated with commercial activities including marketing activities.
b. Intangible Property defined in detailed manner (Transfer pricing regulation +OECD guidelines)
o        Marketing related – Trademark, trade names, brand names, logos
o       Technology related- Process patents, patents applications, technical documentation such as   laboratory notebooks , technical know-how
o         artistic   related   intangible   assets,   such   as,   literary   works   and copyrights, musical compositions, copyrights, maps, engravings
o       data   processing  related   intangible  assets,   such   as   proprietary computer software, software copyrights, automated databases, and integrated circuit masks and masters
o   engineering  related  intangible  assets,  such  as  industrial  design, product patents, trade secrets, engineering drawing and schema-tics, blueprints, proprietary documentation
o     customer related intangible assets, such as, customer lists, customer contracts, customer relationship, open purchase orders
o     contract  related  intangible  assets,  such  as,  favorable  supplier, contracts, license agreements, franchise agreements, non-compete agreements
o    human  capital  related  intangible  assets,  such  as,   trained  and organized workforce, employment agreements, union contracts;
o  location related intangible assets, such as leasehold interest, mineral exploration rights, easements, air rights, water rights
o    goodwill  related  intangible  assets,  such  as,  institutional  goodwill, professional practice goodwill, personal goodwill of professional, celebrity goodwill, general business going concern value
o  methods,  programmes,  systems,  procedures,  campaigns,  surveys, studies, forecasts, estimates, customer lists, or technical data
o      any  other  similar  item  that  derives  its  value  from  its  intellectual content rather than its
physical attributes
c. Service, finance cost etc
d. Cross Border transactions with examples



Specified Domestic Transactions

a. The threshold limit for SDT can be computed either on net basis (i.e. without including indirect tax levies like service tax, VAT, etc.)  If the assessee is availing credit of those indirect taxes or on gross basis if the assessee is not availing credit, depending upon the method of accounting regularly followed.  An  useful  reference  may  be  made  to  the  paragraph relating to Sales, Turnover, Gross Receipts under Guidance Note on Tax Audit u/s. 44AB issued by the Institute for the purpose of determining the threshold limit.
b. The provisions of Section 40Aoperates only on the expenditure side and would not have any impact in the hands of the recipients of such payments. Thus only the  persons/entities incurring  such  expenditure would  be  subject  to  SDT under  this  provision  and  would  be  required  to  comply  with  the  relevant transfer pricing compliances
c. The persons/entities receiving such income will not be subject to SDT under this provision and would not be required to comply with the relevant transfer pricing compliances.
d. These provisions are applicable to expenditures claimed as deduction under ‘income from other sources’ head on account of specific direction in section 58(2) which states that provisions of section 40A are also applicable for computation of taxable income under “income from other sources”.
e. Provisions of Section 40A are also applicable to the expenditures which are  capital in nature and fully claimed as a deduction under other sections like Sec 35(2AB), 35 or 35AD) since any expenditure is covered under the scope of  sec 40A (2)(b). I.e. we have to comply with theTransfer pricing provisions in case Research and development. (Important to note that R&D is also covered under OECD guidelines and United Nations Guidelines)
f. The transactions included in the ambit of this section would include expenditure transactions like (illustrative only):
•  Expenditure on buying goods
•  Expenditure on procurement of services
•  Expenditure on interest payments
•  Expenditure on salary, training services, marketing expenses
•  Expenditure on purchase of tangible and intangible property
•  Director’s remuneration, commission, sitting fees
•  Group charges
•  Reimbursement expenditure
•  Guarantee fee expenditure
g. Relationship chart is given to explain the persons who are covered under section 40A.
h. Transactions in other provisions to which section 80-IA (8)/ (10) apply
Specified domestic transactions as defined in section 92BA also refer to any transaction, referred to in any other section under Chapter VI-A or section 10AA, to which provisions of section 80-IA(8) and section 80-IA(10) are applicable.
The following profit linked incentive provisions under Chapter VI-A are also governed by provisions of section 80-IA(8) and section 80-IA(10) and hence will be subject to Domestic TP:-
o                      Section 80-IAB, Section 80-IB, Section 80-IC, Section 80-ID, Section 80-IE



Arm’s Length Price

a. The steps involved in the determination of the arm’s length price can be summarized as follows:
(i)       Identification of the “international transaction” or specified domestic transaction;
(ii)       Identification of an “uncontrolled transaction” – Rule 10A (a);
(iii)      Identification and comparison of specific characteristics embodied in international transactions or specified domestic transactions and uncontrolled transactions – Rule 10B (2);
(iv)     finding   out   whether   uncontrolled   transactions   and   international transactions or specified domestic transactions can be compared by reconciling/resolving differences, if any – Rule 10B (3);
(v)      ascertaining the most appropriate method by applying the tests laid down – Rule 10C;
(vi)     determination  of  the  arm’s  length  price  by  applying  the  method chosen – Rule 10B (1)

b. The factors given under Rule 10C are to be applied cumulatively in selecting the most appropriate method. The reference therein to the terms ‘best suited’ and ‘most reliable measure’ indicates that the most appropriate method will have to be selected after a meticulous appraisal of the facts and circumstances of the international transaction or specified domestic transaction. Further, the selection of the most appropriate method shall be for each particular international transaction or specified domestic transaction. The term ‘transaction’ itself is defined in rule 10A (d) to include a number of closely linked transactions. Therefore, though the reference is to apply the most appropriate method to each particular transaction, keeping in view, the definition of the term ‘transaction’, the most appropriate method may be chosen for a group of closely linked transactions. Two or more transactions can be said to be linked when these transactions emanate from a common source being an order or a contract or an agreement or an arrangement and the nature, characteristics and terms of these transactions are substantially flowing from the said common source. For example, a master purchase order is issued stating the various terms and conditions and subsequently, individuals orders are released for specific quantities. The various purchase transactions are closely linked transactions.
c.  Examples are given where variation of 3% in TP is explained.
d. The following are some of the characteristics to be assessed vis-à-vis the property transferred or service provided:
•           Quality of product/services;
•           Quantity and value of the transactions;
•           Presence of intangibles like brand name, trademarks etc.;
•           Material/physical features.

e. Analysis of functions performed like design & development of product, manufacturing, warehousing, sales and distribution, technical services, conceptualization and specification of services performed etc

f.  Analysis of Assets employed like whether assets are owned or leased, whether activity is capital or labour intensive Presence or absence of intangibles

g. Analysis of Market Conditions like geographical location and size, regulatory laws, govt orders, cost of labour, cost of capital, Nature of Market, level of Competition

h. Examination of Important contractual terms like Terms of Delivery, FOB, CIF, terms of payment, discount, rebate, taxes etc

i. Analysis of Risk Assumed
Nature of risks
1.Financial risk
a.      Capital contribution
b.      Method of funding
c.      Funding of losses
d.      Bad debts
2.Product risk
a.      Design and development of product
b.      Up-gradation of product
c.      After Sales Service
d.      Risks associated with R & D
e.      Product liability risk f
.       Intellectual property risk if any
3.Market risk
a.      Development of market including advertisement and product promotion etc.
b.      Business volume risk
c.      Assured sales risk
d.     Fluctuations in demand and prices.
e.      Credit and collection risk

j. It is important to note that the transactions entered into by associated enterprises with unrelated party (“internal comparables”) would provide more reliable and accurate data as compared to transactions by and between third parties (“external comparables”). OECD’s Guidelines on Transfer Pricing recognize the fact that external comparables are difficult to obtain and, also, it may be incomplete and difficult to interpret.  Hence for these reasons, internal comparables are preferred to external comparables.

k. All above analysis given under Rule 10 d – information and documents to be kept but examples are not mentioned in income tax rule, examples covered by ICAI guidelines (above)




Methods of Arm’s Length Price



a. Comparable uncontrolled transaction Method
Price Charged in a comparable uncontrolled  transaction + Adjustment which could materially affect the price in open market
OECD Guidelines
Typical transactions in which CUP Method May be used
o                      Transfer of Goods
o                      Provision of Services
o                      Intangibles
o                      Interest on Loans
The OECD in its Transfer Pricing Guidelines observes as under:
“The CUP method is a particularly reliable method where an independent enterprise sells the same product as is sold between two associated enterprises.”
“The CUP method compares the price charged for property or services transferred in a controlled transaction to the price charged for property or services transferred in a comparable uncontrolled transaction in comparable circumstances. If there is any difference between the two prices, this may indicate that the conditions of the commercial and financial relations of the associated enterprises are not arm’s length, and that the price in the uncontrolled transaction may need to be substituted for the price in the controlled transaction.”
  The steps involved in the application of this method are:
 (i)  Identify  the   price   charged  or   paid  in   comparable  uncontrolled transactions;
(ii)  The  above  price  should  be  adjusted  for  transaction  level  the differences on  the  basis  of  functions performed, assets  used  and risks taken (FAR) analysis and enterprise level differences if any;
   (iii)The adjusted price is the arm’s length price

b. Collective Materiality and Open Market
Only differences that would materially affect the price in the open market are required to be adjusted. Two points may be noted. Firstly, materiality would have to be judged in the light of various circumstances. If there are numerous adjustments, which are individually not material but collectively material, the necessary adjustments are required to be made.
Secondly, the term ‘open market’, though not defined, would mean a transaction between a knowledgeable and a willing purchaser and a knowledgeable and willing seller where neither of them is influenced or compelled to act in a particular manner.
Explanation to the section 80IA not defined the term open market.

c. Resale Price Method
Typical transactions where the resale price method may be adopted are distribution of goods involving little or no value addition
OECD guideline:-
An Appropriate resale price Margin is easiest to determine where the reseller does not add substantially to the value of the product.
It may be more difficult to use the RSM to arrive at an arm’s length price where before re-sale the goods are further processed or incorporated in more complicated product so that their identity is lost or transformed.
A resale price margin is more accurate where it is realized within a short time of the reseller’s purchase of the goods. The more time that elapses between the original purchase and resale the more likely it is that other factors – changes in the market, in rates of exchange, in costs, etc. – will need to be taken into account in any comparison.”

d. Cost plus Method
Cost plus Method includes Direct plus indirect costs
Typical transactions in which Cost plus Method May be used
o                      Joint facility arrangements
o                      Provision of Services
o                      Transfer of Semi-finished goods
o                      Long term buying & selling arrangements
The OECD in its Transfer Pricing Guidelines states as follows:
“This method probably is most useful where semi finished goods are sold between associated parties, where associated parties have concluded joint facility agreements or long-term buy-and-supply arrangements, or where the controlled transaction is the provision of services.”

e. Profit Split Method
Rule 10B(1) profit  split  method,  which  may  be  applicable mainly in international transactions involving transfer of unique intangibles or in multiple international transactions which are so inter- related that they cannot be evaluated separately for the purpose of determining the arm’s length price of any one transaction, by which…….

f. Transactional Net margin Method
Typical transactions where the transactional net margin method may be adopted are:
(a)      Provision of services;
(b)      Distribution of finished products where resale price method cannot be applied;
(c)      Transfer of semi finished goods where cost plus method cannot be applied;
(d)      Transactions involving intangibles where profit split method cannot be applied

g. Other Method is used in case of International Transactions.
Very High
Price Benchmarking
(Very important for us )
Where goods or service under consideration is sold widely among unrelated parties. Transfer of Tangibles, Intangibles, Royalty, Loans
GP based Price Benchmarking
Raw materials or semi- finished goods are sold; where joint facility agreements or long-term buy-and-supply arrangements, or the provision of services are involved;
GP based Price Benchmarking
Manufacturer / Service
It is applied when a property purchased or services obtained from associated enterprises are resold to unrelated parties.
NP based Price Benchmarking
Manufacturer / Service
where the transactions involve provision of integrated services by more than one enterprise
NP based Price Benchmarking
Manufacturer / Service
Universally applied but used as a method of last resort, where RPM cannot be used.
(Rule 10AB)
New method according to Situation but the applicability according to our understanding in case of Director’s remuneration, cost allocations , allocations between group entities, Intangibles etc.



Documentation and Verification

a. Following is the illustrative checklist to carry out business analysis of the assessee:
(a)      year of establishment/incorporation;
(b)      Name and residence of the parent company (holding company);
(c)      details  of  the  place/s  (units)  from  where  services  are  rendered
(Including area occupied, infrastructure, etc.);
(d)      Activity in brief (if there is more than one unit, details of activities in each unit);
(e)      stake-holding of the parent company;
 (f)      Legal environment of the industry;
(g)      Key value drivers of the industry;
(h)      Major players in the industry;
(i)       share of business in the industry;
(j)       Trends in profitability, turnover, market share etc.
b. A similar description of the business of the associated enterprises with whom the  assessee  has  undertaken  international  transactions,  is  also  to  be prepared by the assessee. The accountant shall verify if such description is also maintained.
c. A record of the actual working carried out for determining the arm’s  length  price,  including  details  of  the  comparable  data  and financial information used  in  applying the  most  appropriate  method, and adjustments, if any, which were made to account for differences between the international transaction and the comparable uncontrolled transactions,
d. The   regulations   require   the   assessee   to   maintain   information regarding the shareholding pattern
e. Ownership interest held by enterprises in the assessee enterprise, directly or indirectly through intermediaries, also needs to be maintained by the assessee.
f. Summarized global financials and other details such as capital invested, assets employed, turnovers achieved, incomes earned, profits made / losses incurred, etc.
g. Sometimes, the establishment of ownership linkages between the assessee and other associated enterprises is a problem for the reason that sufficient reportable information is not available. In such cases, the assessee will have to provide only the information that is available with him.
h. Remark of OECD: - “Tax   administrators   further   should   not   require   taxpayers   to   produce documents that are not in the actual possession or control of the taxpayer or otherwise reasonably available, e.g., information that cannot be legally obtained, or that is not actually available to the taxpayer because it is confidential to the taxpayer’s competitor or because it is unpublished and cannot be obtained by normal enquiry or market data.”
i. The assessee is not required to maintain this information in respect of other associated enterprises i.e. enterprises that are not its group entities but are deemed to be associated enterprises by virtue of provisions of clauses (c) to (m) of section 92A(2).

Indian Regulation Vs OECD Regulations
Indian Regulation
OECD Regulation
Associated Enterprises
Very wide definition
Restricted to controlled entities
Comparable range
(FY 2013)Allows 3% range band on avg. results of comparables
Allows for range of Comparable Data
Multiple year data
Only allows data for current year (and earlier 2 years under limited circumstances)
Foreign comparables
Not permitted in practice
Priority of methods
Most appropriate method rule
Originally preference for Traditional Methods
Use of unspecified method
Now specified
Prudent business principle
definition vague and unclear No guidelines
Defined & described but progress still not full achieved.