Transfer Pricing

allocotion of cost in relotion of

lncome, expenditure, interest & tronsoction shall br
Sec 92 :Any domestic
or specihed
internotional transoction
price
computedhaving regord to Arm's length's
price, foir price.
ALP means - Correct morket
the income or increosing the losses ther
reduction in
If due to ALP there is
transferpricing provision shall not Apply.

Transactions.
Sec 92B: International
between two or more Associated Enterpr ses (A E
It means - (o) Transaction
Resident (NR)
(b) ot least one mnust be Non

purchase, sale, lease, provision of service, lending, Borroksing.

Note:1. Tronsoction moy
etc.
NR Is
If both AE's ore NR, then TP shall only apply if income of one of the
2.
taxoble under IT Act, 1961.
t C
enterprise & unrelated person shall be deem:
er 45
- 3. Tronsoction between
internotionol trOnsoction, if:
&unreloted person
a) there exist prior ogreement betneen AE
b) terms of transaction are determined by A.E.

shares
(A.E)
more s Ltd.
26%
or | Peior aQrcertet btnee
y Ltd & ALtd.
(A.E)
x Ltd.
Deemed to unrelated Person

be unternational ALtd.
transaction (resident / NR)

324 CABHAMwR BORO

 nternotional transaction b , t 4 t i i t tetmttthte
related to trarscction beteon yItd &Altd& term: tt detersr scd ty h r
tronsaction betweenX Ltd gAitd 1z treated os dcemcd to benteest ore
transaction.

Sec 92A :Associated

Enterprise
TO enterprise shall be treated os AE
1fotehet ha
One enterprise hold at least
b
2heCvoting pobier) ofe
Anu person holds at leost 26% thcnt
One enterprise appoints mare thar
ofrehtes
t he boor
Directorof other enterprise.
Anu person appoints more than half of the B0b or one orrec
of eaci of sucih cnterprise
Aloan given by one enterprise to other enterprise, ot least
of other enterprise.
Sh-aJha
One enterprise guarantees ot leost 109% of the Total s of the other
enterprise.
The Business of one enterprise is oholly dependert on kntirte pater
cntete of other enterprise.
507 or more of row moterial reGuired by one enterprise s suppled by otner
enterprise.
Goods manufoctured by one enterprise are sold to other enterprise & p
ConditiOn ore niuenced by other enterprise.
One enterprise is controlled by individual & other enterprise s
19nduei or his relative or jointly bå individual & relative
One enterprise is controlled by HUF & other enterprise is controllea by mem
iotive ofmemher or jointls by member & relative
enterpr se e
One enterprise has ot least 109% mterest m arother
o, AOP, BOI

325 CA BHANR 8ORowA