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substantial amount of services from one or more related parties
during its taxable year. See id.
During the years in issue, petitioner rendered marketing
services to the unrelated otros growers similar to the marketing
services it rendered on behalf of the related Canelos growers;
therefore, the services petitioner rendered on behalf of the
Canelos growers are considered an integral part of petitioner's
business activity. Sec. 1.482-2(b)(7)(i), Income Tax Regs.
Consequently, an arm's-length charge for the marketing services
rendered by petitioner relating to the SCP deal would be an
amount that petitioner charged or would have charged an unrelated
party for the same or similar services in an independent
transaction under similar circumstances, considering all relevant
facts. Sec. 1.482-2(b)(3), Income Tax Regs.
Petitioner contends that the commission rate it charged in
the SCP deal constituted an arm's-length rate. Respondent
contends, however, that a party dealing at arm's length on behalf
of petitioner would not have accepted the SCP deal.
Expert Testimony
In support of their respective positions, each party has
submitted the testimony of an expert witness or expert witnesses
relating to what constitutes an arm's-length charge for the
services petitioner rendered on behalf of the SCP deal.
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