Section - 92CE - Secondary adjustments in certain
It is a new provision sought to
be inserted for the purpose of aligning the transfer pricing provisions with
the OECD guidelines. Where transfer pricing adjustment has been made which
results in increase in the total income or reduction in loss and such
adjustment is either made by the assesse suo moto or accepted by him or
determined as per advance pricing agreement or safe harbour rule or arises as a
result of resolution under mutual agreement procedure, the assessee and the
associated enterprise can make secondary adjustment in their books. The
increase in profit will be taken as an advance to the associated enterprise and
in case the same is not repatriated to India, the notional interest will be
computed in the prescribed manner.
The provision will not apply if
the amount of adjustment does not exceed Rs.1 Crore and the same is made in
respect of assessment year 2016-17 or earlier years.
The amendment takes effect from 1st
April 2018 relevant to assessment year 2018-19.