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TMI BlogClarification on provisions governing transfer price in an international transactionX X X X Extracts X X X X X X X X Extracts X X X X ..... 92 of the Income-tax Act by new sections 92 and 92A to 92F. These new provisions lay down that income arising from an international transaction between associated enterprises shall be computed having regard to the arms length price. The term associated enterprise has been defined in section 92A. Section 92B defines an international transaction between two or more associated enterprises. The provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Income-tax Rules, 1962, giving the manner and the circumstances in which different methods would be applied in determining arms length price and the factors governing the selection of the most appropriate method. The form of the report of the accountant and the documents and information required to be maintained by the assessees have also been prescribed. The aforesaid provisions have been ena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i ) The Assessing Officer shall not make any adjustment to the arms length price determined by the taxpayer, if such price is up to 5 per cent. less or up to 5 per cent. more than the price determined by the Assessing Officer. In such cases the price declared by the taxpayer may be accepted. ( ii ) The provisions of sections 92 and 92A to 92F come into force with effect from 1st April, 2002, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here an international transaction has been put to a scrutiny, the Assessing Officer can have recourse to sub-section (3) of section 92C only under the circumstances enumerated in clauses ( a ) to ( d ) of that sub-section and in the event of material information or documents in his possession on the basis of which an opinion can be formed that any such circumstances exists. In all other cases, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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