CMA Final · Direct Tax Laws and International Taxation · Business Restructuring

Indian company Veda Ltd sells its entire customer list and customer contracts to its Singapore associated enterprise. For the transfer pricing provisions of the Income-tax Act, 2025, how should these items be viewed?

Customer lists and customer contracts are customer related intangible assets, which fall within intangible property. Their sale to a non-resident associated enterprise is therefore an international transaction, regardless of price relative to book value, and the non-resident status of the buyer is what satisfies the cross-border requirement.

1. AThey are not covered, as only tangible property transfers are international transactions
2. BThey are intangible property, being customer related intangible assets, and their transfer is an international transactionCorrect
3. CThey are covered only if the price is below book value
4. DThey are covered only if the Singapore entity is a resident