Novelty Inc. and KAL will be deemed associated enterprises and the transaction between KAL and TVIDIA will also be covered under transfer pricing…

Rule 10C deals with the determination of most appropriate method. Under this Rule, the method which is best suited to the facts and circumstances, and which provides the most reliable measure of an arm's length price in relation to the international transaction will be considered to be the most appropriate method. For the purpose of selecting the most appropriate method, the following factors should be taken into account. (i) The nature and class of the international transaction; (ii) The class, or classes of associated enterprises entering into the transaction and the functions performed by them taking into account assets employed or to be employed and risks assumed by such enterprises; (iii) The availability, coverage and reliability of data necessary for application of the method; (iv) The degree of comparability existing between the international transaction and the uncontrolled transaction and between the enterprises entering into such transactions; (v) The extent to which reliable and accurate adjustments can be made to account for difference, if any, between the international transaction and the comparable uncontrolled transaction or between the enterprises entering into such transactions; (vi) The nature, extent and reliability of assumptions required to be made in application of a method.