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Transfer PricingArticle·21 April 2026

Bright Line Test rejected

By J the App

Executive Summary

This decision is a reaffirmation, not innovation, but an important one.

The ITAT decisively reiterates that:

• BLT has no statutory backing

• It stands rejected by jurisdictional High Courts 

• Revenue cannot continue applying it merely because appeals are pending 

Further, the ruling underscores that AMP expenditure cannot be presumed as an international transaction absent demonstrable arrangement with AE.

Issues for Determination

1. Whether AMP expenditure constitutes an “international transaction” under Chapter X. ...

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