Computation of income from international transaction having regard to arm's length price
105. (1) The amount of any income, or expense, arising from an international transaction shall be determined having regard to the arm's length price.
(2) The allocation or apportionment of, or any contribution to, any cost or expense incurred in connection with a benefit, service or facility provided to any associated enterprise shall be determined having regard to the arm's length price of such benefit, service or facility, as the case may be, if -
(a) two or more associated enterprises have entered into a mutual agreement or arrangement for the allocation or apportionment of, or any contribution to, such cost or expense; and
(b) the benefit, service or facility provided to any one or more associated enterprises involves an international transaction.
(3) The provisions of this section shall not apply in a case, if the determination under sub-section (1), or sub-section (2), has the effect of reducing the income chargeable to tax, or increasing the loss computed, on the basis of entries made in the books of account in respect of the financial year in which the international tax transaction was entered.
