notification on range and multiple year data- flowchart

[The views/facts expresses are totally personal] By: Ajit Kumar Jain

Notification on Range – Applicable after 1 April 2014

I. Use of data

No

Yes

No

Yes

No

Yes

RPM or CPM or

TNMM Methods

Old provision for

use of data

Current year data

is available

Data to be used for

immediately two financial

years. Current year data can

be added at the time of

assessment

Current year data

is comparable to

preceding two

financial years

Comparable to be

excluded

Arm’s length computation for

the current year based on the

methods (CPM or RMP or

TMM) considered in preceding

two financial years

[The views/facts expresses are totally personal] By: Ajit Kumar Jain

II. Applicability of Range

No

Yes

No

No

RPM or CPM or

TNMM Methods

No range

applicability. 3%

benefit

Comparable

companies > 6

No range

applicability. 3%

benefit

Computation of range

based on 35th to 65th

percentile of data set

Transaction pricing

falling with the range

Median of

dataset is ALP

The transaction price

is at ALP

[The views/facts expresses are totally personal] By: Ajit Kumar Jain

III. At the time of Assessment

No

Yes

Yes

No

No

Yes

No

Current year data

already available

in TP study

Current year data

is available in

public domain

TP study

comparable > 6

Refer to old

provision

New provisions

benefit of range

Continue with

preceding two

years data

Current year data

passes

quantitative and

qualitative filter

Comparable

rejected

Comparable to be

added in set