Computation of Income from International Transaction having regard to Arm’s Length Price - Section 92 - International Taxation - Income Tax

Computation of Income from International Transaction having regard to Arm s Length Price - Section 92 Any income arising from an international transaction shall be as per arm's length price. Not only the income even the allowance for any expense or interest arising from an international transaction shall be determined as per the arm s length price. [ Section 92(1) ] Mutual agreement or arrangement for the allocation of any contribution, cost or expense:- If in an international transaction two or more associated enterprises enter into an agreement for allocation of cost/expense in connection with a benefit, service or facility provided, to any one or more of such enterprises, then the allocation of cost/expense shall be on the basis of arm s length price. [ Section 92(2) ] Any allowance for an expenditure or interest or allocation of any cost or expense or any income in relation to the specified domestic transaction shall be computed as per arm's length price. [ Section 92(2A) ] Provisions of ALP not to apply if these result into reduction of income or increase of loss:- The provisions of this section relating to determination of ALP shall not apply where the computation of income has the effect of reducing the income chargeable to tax or increasing the loss, computed on the basis of entries made in the books of account. [ Section 92(3) ]