Topic
Related party transactions in Indian law refer to financial dealings between entities with a direct or indirect control relationship, often scrutinized under tax, customs, and corporate insolvency regulations.
The Competition Commission of India closed Case No. 27 of 2025 after finding no contravention of Sections 3 or 4 of the Competition Act, 2002 in DIAL's award of security contracts to RAXA. The ruling clarifies that related-party transactions must still meet arms-length standards to avoid dominance abuse allegations.
ITAT Delhi rules that comparables with related party transactions exceeding 25% of sales fail the arm's length price test under Section 92C, invalidating their selection. This precedent strengthens taxpayer challenges to Transfer Pricing Officer assessments, impacting multinational enterprises and transfer pricing litigation strategies.
The NCLAT has ruled that unregistered profit-sharing agreements, even if historically honored, cannot override the statutory moratorium under IBC to claim possession of corporate debtor assets. This clarifies that only registered leases or lawful tenancies survive CIRP, empowering Resolution Professionals to evict unauthorized occupants without prolonged litigation.
CESTAT Chennai clarifies that mere related-party status does not invalidate transaction value under Rule 9; the revenue must prove actual influence on price through concrete evidence. This ruling empowers manufacturers dealing with group companies to rely on arm’s-length pricing unless proven otherwise, reducing arbitrary reassessments in excise audits.
Bombay High Court dismisses Section 9 petition for interim disclosure, holding that shareholder's prior acquiescence in franchise fee deductions negates urgency for pre-arbitration relief.
The Customs Appellate Tribunal holds that importers must prove transaction value is not influenced by related-party status under Rule 3(b) of Customs Valuation Rules, 2007.