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TMI BlogInterpretationX X X X Extracts X X X X X X X X Extracts X X X X ..... able loss, in the hands of another party; or (d) result in prepayment by any other party; (2) "arm's length price" means a price which is applied, or proposed to be applied, in a transaction between persons, enterprises or undertakings, other than associated enterprises, in uncontrolled, unrelated or independent conditions; (3) "arrangement" means any step in, or a part or whole of, any transaction, operation, scheme, agreement or understanding, whether enforceable or not, and includes any of the foregoing involving the alienation of property; (4) "asset" includes property, or right, of any kind; (5) "associated enterprises" means two enterprises which are associated with each other at any time during the financial year, by virtue of - (a) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of which the other enterprise has exclusive rights; (h) two-third, or more, of the raw materials and consumables required for the manufacture, or processing, of goods or articles carried out by one enterprise, being supplied by the other enterprise, or by persons specified by the other enterprise, and the prices and other conditions relating to the supply are influenced by such other enterprise; (i) the goods or articles manufactured, or processed, by one enterprise, being sold to the other enterprise or to persons specified by the other enterprise, and the prices and other conditions relating thereto are influenced by such other enterprise; (j) one enterprise being controlled by an individual, and the other enterprise being als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the business of the person or any relative of such individual; (f) a company, unincorporated body or Hindu undivided family having a substantial interest in the business of the person or any director, participant, or member of the company, body or family, or any relative of such director, participant or member; (g) a company, unincorporated body or Hindu undivided family, whose director, participant, or member have a substantial interest in the business of the person; or family or any relative of such director, participant or member; (h) any other person who carries on a business, if,- (i) the person being an individual, or any relative of such person, has a substantial interest in the business of that other person; or (ii) the person bei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c) any right, or obligation, to receive, or pay, the cash or cash equivalent; (14) "impermissible avoidance arrangement" means a step in, or a part or whole of, an arrangement, whose main purpose is to obtain a tax benefit and it,- (a) creates rights, or obligations, which would not normally be created between persons dealing at arm's length; (b) results, directly or indirectly, in the misuse, or abuse, of the provisions of this Code; (c) lacks commercial substance, in whole or in part; or (d) is entered into, or carried out, by means, or in a manner, which would not normally be employed for bonafide purposes; (15) "international transaction" means,- (a) a transaction between two or more associated enterprises, either or all of whom is a no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... attributable to the tax benefit that would be obtained but for the provisions of section 112; (b) the legal substance, or effect, of the avoidance arrangement as a whole is inconsistent with, or differs significantly from, the legal form of its individual steps; or (c) it includes, or involves,- (i) round trip financing without regard to,- (A) whether or not the round tripped amounts can be traced to funds transferred to, or received by, any party in connection with the avoidance arrangement; (B) the time, or sequence, in which round tripped amounts are transferred or received; or (C) the means by, or manner in, which round tripped amounts are transferred or received. (ii) an accommodating or tax indifferent party; (iii) any element that h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the profits of such business. (22) "tax benefit" means,- (a) a reduction, avoidance or deferral of tax or other amount payable under this Code in the relevant financial year or any other financial year; (b) an increase in a refund of tax or other amount under this Code in the relevant financial year or any other financial year; (c) a reduction, avoidance or dererral of tax or other amount that would be payable under this Code but for a tax treaty, in the relevant financial year or any other financial year; or (d) an increase in a refund of tax or other amount under this Code as a result of a tax treaty, in the relevant financial year or any other financial year; (23)"transaction" in relation to an international transaction shall include an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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