Transfer Pricing Ruling - Dana Corporation

AAR Ruling - transfer of shares of Indian Subsidiaries of an American company without consideration in a scheme approved for bankruptcy proceedings in an American Court would not attract capital gains and consequently, transfer pricing provisions cannot be applied in such transactions [A.A.R. No. 788 of 2008 - Dana Corporation]

Facts:

Dana Corporation ("DC"), a company incorporated in USA filed for bankruptcy. DC owned shares in two US entities namely, Dana World Trade Corporation ("DWTC") and Dana Global Products, Inc. ("DGPI"). DC also had three subsidiaries in India. As part of the bankruptcy proceedings, a reorganization plan was submitted to the Bankruptcy Court in USA. A new holding company ("DHC") and a limited liability company ("DCLLC") were formed as part of the plan. Thereafter, DC transferred the equity shares held by it in two of the Indian Companies to DWTC and the shares of the other wholly owned Indian Company were transferred to DGPI. The transfer