Section 92CC(5)

Section 92CC(5) — the law in short

What the courts have decided on section 92CC(5), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• 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.
• s.92CC(4) — the five-year APA term and the year outside it CBDT Circulars & InstructionsCuts both ways
  My advance pricing agreement covers five years. What about the year just outside it - can the agreed margin be held against me, or held to my benefit, for that year?
  Section 92CC(4) caps the agreement at such period not exceeding five consecutive previous years as may be specified in it, and s.92CC(3) gives the agreement its force only "in respect of which the advance pricing agreement has been entered into". Sub-section (9A) extends that backwards, but only so far: an agreement may, subject to prescribed conditions, determine the arm's length price or the attributable income for any period not exceeding four previous years preceding the first of the years covered by sub-section (4), and rule 10F(ha) calls those the rollback years. A year outside the five plus four is outside the agreement, and the Pune Bench has held in Tetra Pak India that the window works against the department too: the TPO may not benchmark an uncovered year against the margin agreed in the APA.

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.