Recently, the Delhi Bench of the Income-tax Appellate Tribunal (the Tribunal) in case of: Ranbaxy Laboratories Ltd. v. ACIT (ITA No. 196/Del/2013), held that overseas Associated Enterprises (AEs) being least complex entities in the transaction, must be selected as tested parties for the purpose of determining arm’s length nature of international transactions.
While doing so, the tribunal gave due consideration to a prior advance pricing agreement (APA) reached between the taxpayer and the Central Board of Direct Taxes under which the facts were similar to the year under consideration.
