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2021 (2) TMI 135 - HC - Income TaxTP Adjustment - associated enterprise or not - participation of one or more persons in the management or control or capital - TPO treated the expenditure incurred on the advertisement and marketing and product promotion as an international transaction and determined the arms length price by applying bright line method - HELD THAT:- From perusal of the Memorandum of Finance Bill, 2002, it is evident that sub Section (2) of Section 92A was amended with effect from 01.04.2002 to clarify that mere fact of participation by one enterprise in the management or control or capital of the other enterprise, or the participation of one or more persons in the management or control or capital of both the enterprises shall not make them associated enterprises, unless the criteria specified in sub-Section (2) are fulfilled. From perusal of the aforesaid provisions, it is evident that sub-Sections (1) and (2) of Section 92A of the Act are interlinked and have to be read together. In case the provisions of sub-Sections (1) and (2) are read independently, we are afraid that one of the provisions would be rendered otiose which is impermissible in law in view of the well settled rule of statutory limitation. Therefore, the requirement contained in sub-Sections (1) and (2) of Section 92A of the Act has to be complied with. It is also pertinent to mention here that the finding recorded by the Tribunal that the assessee has not complied with the provisions of sub Section (1) of Section 92A of the Act, has not been assailed by the revenue. - Decided in favour of assessee.
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