Transfer Pricing-

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CA Chandresh Agrawal (Querist)

28 February 2011
Kindly help me to ascertain status as associate enterprise under section 92A(2)(b) of income tax act 1961.

As per above mentioned section if any person holds or enterprise holds, directly of INDIRECTLY, shares carrying not less than 26% of the voting power in each of the enterprise then both the enterprise will be associate enteprise for transfer pricing.

So my confusion is whether word Indiretly includes shares held by relative

CA. Anuj Gupta

CA. Anuj Gupta (Expert)

01 March 2011 I assume you are checking out the applicability section 92A(2)(b) of income tax act 1961, for a international transaction.

Here the word used is "person" so it has to Mr.A in your case, if he holds directly or indirectly(ONLY if it is proved that he is beneficial owner of his brother's shares)than the provisions of TP shall apply otherwise NOT.

CA Chandresh Agrawal

CA Chandresh Agrawal (Querist)

02 March 2011 Thanks Mr. Anuj Gupta for your reply.

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