Definition
In
this method, price charged in an uncontrolled deal between comparable entities
is recognized and evaluate with the verified entity price to determine the
Arm’s Length Principle.
The
CUP method offer the finest evidence of ALP. A arm’s length price may arise
where:
Tax
payer or another member of the associate group sells the product, in comparable
sizes and in the comparable terms to ALP in similar promote markets (internal
comparable).
An
ALP party sells the similar product, in similar size of quantity and in the
comparable conditions to other arm’s length party in similar markets (an
external comparable).
The
taxpayer of the entities buys the similar quantities, in comparable quantities
and in the similar terms from the associate parties in the comparable markets
(internal comparable).
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An
ALP party buys the particular goods, in comparable quantities and in the
similar terms from the other arm’s length associate party in similar markets
(external comparable).
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