Secondary Adjustments in Certain Cases :
CLAUSE(S) OF FINANCE BILL, 2017 |
PARTICUL ARS OF AMENDME NTS | SECTION | AMENDMENT / NEWLY INSERTED |
APPLICABLE W.E.F. |
BRIEF OF AMENDMENT |
42 | Secondary Adjustments in Certain Cases |
92CE | Newly Inserted | 01/04/2018 (A.Y. 2018-19) |
“Secondary adjustment” means an adjustment in the books of accounts of the assessee and its associated enterprise to reflect that the actual allocation of profits between the assessee and its associated enterprise are consistent with the transfer price determined as a result of primary adjustment thereby removing the imbalance between cash account and actual profit of the assessee. It can be form of constructive dividends, constructive equity contributions, or constructive loans.
1. Applicable where primary adjustment to transfer price, has been made suomotu by the assessee or made by AO accepted by the assesse or is determined by an advance pricing agreement entered into by the assessee under section 92CC; or is made as per the safe harbour rules framed under section 92CB; or is arising as a result of resolution of an assessment by way of the mutual agreement procedure under an agreement entered intounder section 90 or 90A. 2. In case of primary adjustment to the transfer price, there is an increase in the total income or reduction in the loss, the excess money which is available with its associated enterprise, if not repatriated to India within the time as may be prescribed, shall be deemed to be an advance made by the assesse to such associated enterprise and the interest on such advance, shall be computed as the income of the assessee, in the manner as may be prescribed. 3. Also proposed to provide that such secondary adjustment shall not be carried out if, the amount of primary adjustment made in the case of an assessee in any previous year does not exceed one crore rupees and the primary adjustment is made in respect of an assessment year commencing on or before 1st April,2016. |