Recharge employee cost

Hi All,

I am working in the Indian subsidiary of  a UK based MNC.  Our UK company wants to recruit a person based in India. He will be working for the corporate finance team at UK. The UK office has asked us to recharge his costs to UK.

My question are as follows 

1. Is it legally OK to do this. If yes, will a transfer pricing agreement be enough.

2. Is such arrangement covered under any statute.

Appreciate your input on this as we are doing it for the first time and want to grt it right.

Sivaraman 

7708090010