Transfer adjustment of Investment in no-par value shares

In the US, investments can be made in no par value shares / stock. These shares apparently have no value or rights and are not at par with other shares of the company.

What are these investments treated for Transfer Pricing? What should be the Arms-length price for these shares? What method can one choose to determine and justify the Arms-length price?

The Transfer Pricing officer is of the opinion that since these shares have no par value / rights, the Arms Length Price of these shares is “Zero” or “Nil” and therefore wants to add / make a Transfer Pricing adjustment of the entire amount of the investment to the income of the Assessee. What are your views on such an asjustment? What is your experience with respect to no par value shares / stocks? Are they really worth nothing?

We would like to hear from members and conduct research on the subject?

With warm regards,

Ashish Bairagra
M L Bhuwania & Co., Chartered Accountants
Mumbai, INDIA.