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BARRING the physically challenged, there are those blessed few who are not required to do many commonplace ordeals such as carrying a briefcase, driving the car, attending to personal mobile, rearing one's child, tending to own spouse or even taking food to the mouth. When the ICAI tells its members that they are "not required to ensure that the method used by an assessee for determining arm's length price is the most appropriate method", I wonder whether to look at the profession as being `challenged' or `lucky'. CAs are also not required to suggest to their clients the most appropriate method for determining the arm's length price of an international transaction. A double sundae, on the face of it, to be lapped up with both arms?

Arm's length is usually the unit of measure for local flower vendors, but in business transactions, it refers to situations where the parties are not `related', and where the price is determined by commercial considerations rather than being skewed. Since `transfer pricing' was exploited to the disadvantage of the taxman by many MNCs — by manipulating prices charged for global deals with their off-shore companies — the tax law was amended to require the pricing in such cases to be computed using the arm's length principle. When the change came about, it was acclaimed in professional circles as a fresh avenue for CAs.

Now, with wings clipped, a CA is only required to ensure that the method stated as being used to determine the arm's length price by the assesses has actually been used. Computation of the price and selection of the most appropriate method are the assessee's headache and the CA is to have no part of it. The auditor has to only ensure that the workings are in accordance with the accounts and records.

The CA's job would then be no different from a guided tour where one is kept off from the unpleasant things. He is only a dignified guest, to be treated well, pampered and seen off. A nuisance that law imposes on companies. Somebody to be kept at pole's length so that you get on with your job.

D. Murali

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