Ambit of Arm’s Length Pricing Principles under the Income Tax Act,1961, Companies Act, 2013 & Securities and Exchange

Note on ambit of Arm’s Length Pricing Principles under the Income Tax Act, 1961, Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘SEBI LODR’).

This has reference to the webinar organised by the Bombay Chamber on Related Party Transactions on 21st August, 2020 in which you had provided SEBI perspective on the subject. During the panel discussion, you had requested Mr. Parikshit Datta, Partner, Ernst & Young LLP to send a note to you on the ALP principles under the Income tax Act and how it can be of relevance for Regulation 23 of the SEBI LODR /Section 188 of the Companies Act, 2013.

Accordingly, the said note prepared by Mr. Parikshit Datta, perused by our President, Mr. Sudhir Kapadia and Mr. Bharat Vasani, Chairman of our Legal Affairs & IPR Committee, is enclosed herewith for your kind reference. Please also find attached the annexures referred in the said note viz. (a) Text of Rules 10A to 10CA of Income tax Rules (b) ICSI Guidance Note which recommends income tax TP methods and (c) ICAI Guidance Note on Transfer Pricing audit under Income tax Act.

May I request you kindly get in touch with us, in case you need any further information or clarifications in this regard.