Income-tax Act, 1961
(1) Where a primary adjustment to transfer price,— (i) has been made suomotu by the assessee in his return of income; (ii) made by the Assessing Officer has been accepted by the assessee; (iii) is determined by an advance pricing agreement entered into by the assessee under section 92CC; (iv) is made as per the safe harbour rules framed under section 92CB; or (v) is arising as a result of resolution of an assessment by way of the mutual agreement procedure under an agreement entered into under section 90 or section 90A for avoidance of double taxation, the assessee shall make a secondary adjustment: Provided that nothing contained in this section shall apply, if,— (i) the amount of primary adjustment made in any previous year does not exceed one crore rupees; and (ii) the primary adjustment is made in respect of an assessment year commencing on or before the 1st day of April, 2016. (2) Where, as a result of primary adjustment to the transfer price, there is an increase in the total income or reduction in the loss, as the case may be, of the assessee, the excess money which is available with its associated enterprise, if not repatriated to India within the time as may be prescribed, shall be deemed to be an advance made by the assessee to such associated enterprise and the interest on such advance, shall be computed in such manner as may be prescribed. (3) For the purposes of this section,— (i) “associated enterprise” shall have the meaning assigned to it in sub-section (1) and sub-section (2) of section 92A; (ii) “arm’s length price” shall have the meaning assigned to it in clause (ii) of section 92F; (iii) “excess money” means the difference between the arm’s length price determined in primary adjustment and the price at which the international transaction has actually been undertaken; (iv) “primary adjustment” to a transfer price, means the determination of transfer price in accordance with the arm’s length principle resulting in an increase in the total income or reduction in the loss, as the case may be, of the assessee; (v) “secondary adjustment” means an adjustment in the books of account of the assessee and its associated enterprise to reflect that the actual allocation of profits between the assessee and its associated enterprise are consistent with the transfer price determined as a result of primary adjustment, thereby removing the imbalance between cash account and actual profit of the assessee.] 92D. Maintenance and keeping of information and document by persons entering into an [international transaction or specified domestic transaction].— (1) Every person who has entered into an [international transaction or specified domestic transaction] shall keep and maintain such information and document in respect thereof, as may be prescribed. [ Provided thatthe person, being a constituent entity of an international group, shall also keep and maintain such information and document in respect of an international group as may be prescribed. Explanation.—For the purposes of this section,— (A) “constituent entity” shall have the meaning assigned to it in clause (d) of sub-section (9) of section 286; (B) “international group” shall have the meaning assigned to it in clause (g) of sub-section (9) of section 286.] (2) Without prejudice to the provisions contained in sub-section (1), the Board may prescribe the period for which the information and document shall be kept and maintained under that sub-section. (3) The Assessing Officer or the Commissioner (Appeals) may, in the course of any proceeding under this Act, require any person who has entered into an [international transaction or specified domestic transaction] to furnish any information or document in respect thereof, as may be prescribed under sub-section (1), within a period of thirty days from the date of receipt of a notice issued in this regard: Provided that the Assessing Officer or the Commissioner (Appeals) may, on an application made by such person, extend the period of thirty days by a further period not exceeding thirty days. [ (4) Withoutprejudice to the provisions of sub-section (3), the person referred to in the proviso to sub-section (1) shall furnish the information and document referred to in the said proviso to the authority prescribed under sub-section (1) of section 286, in such manner, on or before the date, as may be prescribed.] 92E.Report from an accountant to be furnished by persons entering into [international transaction or specified domestic transaction].—Every person who has entered into an [internationaltransaction or specified domestic transaction] during a previous year shall obtain a report from an accountant and furnish such report on or before the specified date in the prescribed form duly signed and verified in the prescribed manner by such accountant and setting forth such particulars as may be prescribed.