XYZ has sold a machine to ABC (associate enterprise) for ₹3 lakh which was sold by ABC to PQR, an unrelated party, on the sale margin of 30% for ₹5,00,000 and has also incurred an amount of ₹10,000 in sending the machine

CS Executive · Tax Laws and Practice · PYQS · December 2015
XYZ has sold a machine to ABC (associate enterprise) for ₹3 lakh which was sold by ABC to PQR, an unrelated party, on the sale margin of 30% for ₹5,00,000 and has also incurred an amount of ₹10,000 in sending the machine to PQR. The arm's length price of this transaction will be
(A) ₹3,40,000
(B) ₹3,50,000
(C) ₹3,00,000
(D) ₹5,00,000.

Answer & Explanation:

Correct Answer: Option (A)

Official answer key: (A).

Topics: Income Tax Act, 1961

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