The Income Tax Appellate Tribunal (ITAT) delivered a ruling dated 10 June 2008 in the case of E-Gain Communication Pvt. Ltd. v. Income Tax Officer (2008-TIOL-282-ITAT-PUNE) on the issue of whether an Indian software company providing services to its US parent at cost-plus 5% was appropriate under the Indian transfer pricing regulations.

(a) Facts. The Taxpayer (i…

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