72. Most appropriate method

72. Most appropriate method.-

(1) For the purposes of sub-section (1) of section 107C, the most appropriate method for determining the arm’s length price of an international transaction shall be the method that, under the facts and circumstances, provides the most reliable measure of an arm’s length price in relation to the international transaction.

(2) In selecting the most appropriate method as specified in sub-rule (1), the following factors shall be considered, namely:—

(a) the nature and class of the international transaction, and of enterprises entering into the international transaction;

(b) the comparability factors (industry, functions, risks, contractual terms, market level) that are materially significant in determining the price or margin in relation to the international transaction;

(c) the quality (availability, coverage, validity and reliability) of relevant data;

(d) the reliability of assumptions in the method;

(e) the sensitivity of results in the deficiency in data and assumptions;

(f) the extent to which the reliable and accurate adjustments can be made to eliminate the differences, if any, between the international transaction and the comparable uncontrolled transaction or between the enterprises entering into such transactions.]^{Added F. A. 2012}

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Nowshad Amin Chowdhury