Abhirami Retheev, SLS Pune
ABSTRACT
Transfer pricing is the setting of the price for goods and services sold between controlled or related entities within an enterprise.1 Section 92A to 92F of the Income Tax Act, 1961 deals with transfer pricing. Income arising from international transaction, i.e., a transaction between two or more associated enterprises, either or both of whom are non-residents, is a pre-condition for the application of these provisions.2 Thus, it is necessary to clearly identify “associated enterprises” in international transactions. This article discusses the concept of associated enterprise under section 92A, the interplay between clauses (1) and (2) with supporting case laws and illustrations.
