Amendment of section 92CA.
41. After section 92CA of the Income-tax Act, the following section shall be inserted, namely:—
Insertion of new section 92CB.
Power of Board to make safe harbour rules.
'92CB. (1) The determination of arm's length price under section 92C or section 92CA shall be subject to safe harbour rules.
(2) The Board may, for the purposes of sub-section (1), make rules for safe harbour.
Explanation.— For the purposes of this section, "safe harbour" means circumstances in which the income-tax authorities shall accept the transfer price declared by the assessee.'.
Notes on Clauses:
Clause 41 of the Bill seeks to insert a new section 92CB in the Income-tax Act, relating to power of Board to make 'safe harbour rules'.
The proposed new section seeks to provide that the determination of arm's length price under section 92C or section 92CA shall be subject to safe harbour rules.
It is also proposed that the Board may, for the purposes of subsection (1), make rules for 'safe harbour'.
It is also proposed to insert an Explanation to provide that 'safe harbour' means circumstances in which the income tax authorities shall accept the transfer price declared by the assessee.
This amendment will take effect retrospectively from 1st April, 2009.