A sold a machine to B (associated enterprise) and in turn B sold the same machinery to C (an independent party) at sale margin of 30% for ₹4,00,000 but B has incurred ₹4,000 in sending the machine to C. From the above da
CS Executive · Tax Laws and Practice · PYQS · December 2014
A sold a machine to B (associated enterprise) and in turn B sold the same machinery to C (an independent party) at sale margin of 30% for ₹4,00,000 but B has incurred ₹4,000 in sending the machine to C. From the above data, determine arm's length price —
Answer & Explanation:
Correct Answer: Option (A)
Correct answer: (A) ₹2,76,000. Resale-price method: 4,00,000−30%×4,00,000−4,000 = 2,76,000. This answer applies to the historical law and assessment-year context of this December 2014 paper; later amendments may differ.
Topics: International Taxation
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