Section 92C(4)

Section 92C(4) — the law in short

What the courts have decided on section 92C(4), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• PCIT (IT)-2 Mumbai v Gemological Institute of America Inc High CourtHelps taxpayerNo later treatment found
  An APA between your Indian company and the CBDT fixes the royalty. The officer says the second proviso to s.92C(4) still stops the foreign parent, who did not sign the APA, from being taxed on the reduced figure. Does it?
  No, on this Bench's reasoning. Where an APA has been entered into between the Indian associated enterprise and the CBDT, that agreement governs the determination of the arm's length price for every year it covers, and the price falls to be determined solely on the basis of the APA. The second proviso to s.92C(4) is confined to the case where the Assessing Officer determines the arm's length price under s.92C(3); it does not reach a variation made pursuant to an APA.
• PCIT-2 v EYGBS (India) Pvt Ltd High CourtHelps taxpayer
  Your client offered a transfer pricing adjustment itself because its APA required it. The officer says s.92C(4) bars the s.10AA exemption on that extra income. Is he right?
  No. Where the assessee computes the arm's length price itself pursuant to an APA entered into with the CBDT, none of the conditions in s.92C(3) is attracted, and s.92C(4) therefore never comes into operation at all. The bar in s.92C(4) is aimed at income by which the Assessing Officer enhances the declared total income, not at figures the assessee has itself declared in conformity with its APA. The Revenue's appeals were dismissed.
• Dell International Services India Pvt Ltd v DCIT ITATHelps taxpayerNo later treatment found
  You offered extra income to give effect to a MAP resolution. The officer says the proviso denying a Chapter III deduction on enhanced income applies. Does it?
  No, on this Bench's view. The proviso applies only to a transfer pricing adjustment made by the Assessing Officer. It does not reach income enhanced under a mutual agreement procedure resolution, which is one of several distinct modes by which an arm's length price can come to be determined, and where the assessee actually invoices its associated enterprise and brings the foreign exchange in.
• Dar Al Handasah Consultants (Shair & Partners) India Pvt Ltd v DCIT ITATHelps taxpayerNo later treatment found
  I signed an APA with rollback and filed a modified return under s.92CD offering additional income. The officer says the proviso to s.92C(4) bars any Chapter III deduction on that extra income. Is he right?
  He is not. The proviso to s.92C(4) bars a s.10A deduction on income by which the total income is ENHANCED by a transfer pricing addition made by the authorities; income the assessee itself offers in a modified return under the APA is not such an addition. Section 92CD(2) then supplies the positive answer: save as otherwise provided in that section, all other provisions of the Act apply as if the modified return were a return under s.139, so any deduction otherwise available applies to the income offered in the modified return.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.