The Income Tax Appellate Tribunal in Mumbai recently issued its decision on whether a company's equity investment into a subsidiary can be subject to transfer pricing rules and recharacterized as a loan.
The case involved an Indian taxpayer that was part of an affiliated group of an Indian security services provider. During the 2008-09 tax year, the taxpayer acted as the investor for the acquisition of a UK company using funds from an equity investment from the group's holding company. The …