Amendment of section 92.
33. In section 92 of the Income-tax Act, with effect from the 1st day of April, 2013,—
(a) in sub-section (2), for the words “international transaction”, the words “international transaction or specified domestic transaction” shall be substituted;
(b) after sub-section (2), the following sub-section shall be inserted, namely:—
“(2A) Any allowance for an expenditure or interest or allocation of any cost or expense or any income in relation to the specified domestic transaction shall be computed having regard to the arm’s length price.”;
(c) in sub-section (3),—
(i) for the words “international transaction”, the words “international transaction or specified domestic transaction” shall be substituted.
(ii) for the word, brackets and figure “sub-section (1)”, the words, brackets, figures and letter “sub-section (1) or sub-section (2A)” shall be substituted;
(iii) for the words “that sub-section”, the words, brackets, figures and letter “sub-section (1) or sub-section (2A)” shall be substituted;
(iv) after the word, brackets and figure “sub-section (2)”, the words, brackets, figure and letter “or sub-section (2A)” shall be inserted.
Notes on Clauses:
Clause 33 of the Bill seeks to amend section 92 of the Income-tax Act relating to computation of income from international transaction having regard to arm’s length price.
The existing provisions of the aforesaid section 92 provide that income arising from an international transaction shall be computed having regard to arm’s length price.
It is proposed to amend the aforesaid section to insert a new sub-section (2A) so as to provide that any allowance for an expenditure or interest or allocation of any cost or expense or any income in relation to the specified domestic transaction shall be computed having regard to the arm’s length price.
It is further proposed to amend sub-sections (2) and (3) of the aforesaid section to substitute the expression “international transaction or specified domestic transaction” in place of “international transaction” so as to include therein the specified domestic transaction and apply the provisions of sub-sections (2) and (3) to specified domestic transactions.
These amendments will take effect from 1st April, 2013 and will, accordingly, apply in relation to assessment year 2013-2014 and subsequent assessment years.
