Computation of income from international transaction having regard to Arms's Length Price - Section 92 of the Income-tax Act - Reference to Transfer Pricing Officer and his role - regarding - Income Tax - 8

Instruction No : 8 Date of Issue : 11.08.2003 Subject : Computation of income from international transaction having regard to Arms's Length Price - Section 92 of the Income-tax Act - Reference to Transfer Pricing Officer and his role - regarding - Instruction No. 2/2003 was issued for picking up of cases for scrutiny and for reference to Transfer Pricing Officers in cases where the assessees had entered into an international transaction whose cumulative value exceeds Rs. 5 crores. However, doubts have been expressed as to whether instructions could be carried out in view of the general restriction on picking of the cases for scrutiny as this work is expected to be carried out though computer software. It is hereby clarified that the picking up of the cases for scrutiny for the purpose of reference to T.P.O. was approved by the CBDT with a specific purpose of ensuring that the transfer pricing regulations are implemented timely and uniformly. This instruction has to be carried out manually till such time a computer software for the same is made available to the assessing officer. Computer software when developed will include these international transactions also as one of the criteria for picking up the cases for scrutiny. Sd/- Devendra Shanker Director (Foreign Tax Tax Research-I)