1(1) Any income arising from an international transaction shall be computed having regard to the arm's length price.
Explanation.-For the removal of doubts, it is hereby clarified that the allowance for any expense or interest arising from an international transaction shall also be determined having regard to the arm's length price.
(2) Where in an 2 international transaction or specified domestic transaction, two or more associated enterprises enter into a mutual agreement or arrangement for the allocation or apportionment of, or any contribution to, any cost or expense incurred or to be incurred in connection with a benefit, service or facility provided or to be provided to any one or more of such enterprises, the cost or expense allocated or apportioned to, or, as the case may be, contributed by, any such enterprise shall be determined having regard to the arm's length price of such benefit, service or facility, as the case may be.
3 (2A) 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 having regard to the arm's length price.
(3) The provisions of this section shall not apply in a case where the
computation of income under4 sub-section (1) or sub-section (2A) or the
determination of the allowance for any expense or interest under 5 sub-section
(1) or sub-section (2A), or the determination of any cost or expense allocated
or apportioned, or, as the case may be, contributed under sub-section (2) 3 or
sub-section (2A), has the effect of reducing the income chargeable to tax or
increasing the loss, as the case may be, computed on the basis of entries made
in the books of account in respect of the previous year in which the 2
international transaction or specified domestic transaction was entered into.
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1. Subs. by Act 20 of 2002, s. 39, for section 92 (w.e.f. 1-4-2002).earlier
subs. by Act 14 of 2001, s. 49 (w.e.f. 1-4-2002).
2. Subs. by Act 23 of 2012, s. 34, for "international transaction" (we.f.
1-4-2013).
3. Ins. by s. 34, ibid. (we.f. 1-4-2013).
4. Subs. by s. 34, ibid., for "sub-section (1)" (we.f. 1-4-2013).
5. Subs. by s. 34, ibid., for "that sub-section" (we.f. 1-4-2013).
Section 87 Rebate to be allowed in computing income-tax
Section 87A Rebate of income-tax in case of certain individuals
Section 88 Rebate on life insurance premia, contribution to provident fund, etc
Section 88E Rebate in respect of securities transaction tax
Section 89 Relief when salary, etc., is paid in arrears or in advance
Section 90 Agreement with foreign countries or specified territories
Section 91 Countries with which no agreement exists
Section 92 Computation of income from international transaction having regard to arms length price