What the courts have decided on section 92CE(2), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.
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Tech Mahindra Ltd v DCIT — two independent answers to a secondary adjustment: the assessment year commenced before 1 April 2016, so the first proviso to s.92CE(1) shuts the section out; and there was no surviving primary adjustment for a consequential adjustment to attach to
ITATHelps taxpayerValidity unconfirmed
The TPO has re-characterised a payment to my associated enterprise as an interest-free loan and imputed notional interest on it, calling it a consequential adjustment. My year is well before 2016 and the underlying adjustment was itself deleted. Can he do that?
No, on either of two grounds, and the ITAT Mumbai gave both on 24 August 2026 for assessment year 2008-09. First, there was nothing left for the imputed interest to attach to: the primary adjustment of Rs 440.12 crores on the exclusivity payment "was not ultimately made in the final assessment, pursuant to the directions of the Ld. DRP and after verification by the Ld.AO", and "Consequently, there was no surviving primary adjustment to which a consequential adjustment on account of notional interest could attach". Second, and independently, the year was out of range: "A.Y. 2008-09 is an assessment year commencing prior to 01/04/2016. Consequently, in view of proviso (ii) to section 92CE(1) of the Act, the provisions relating to secondary adjustment were not applicable to the transaction under consideration." The Tribunal deleted the notional-interest adjustment of Rs 72.34 lakhs on the exclusivity payment and the adjustment of Rs 69.82 crores on the upfront discount of Rs 524.93 crores carried forward from assessment year 2007-08, and applied the same reasoning mutatis mutandis to the transition fee. The appeal was partly allowed.
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DCIT v Kantar GDC India Private Limited
ITATHelps departmentValidity unconfirmed
The TPO is charging notional interest on my overdue receivables from my associated enterprise. Can I argue for a 90-day credit period by analogy to the secondary adjustment repatriation window in s.92CE and Rule 10CB?
No, on this Tribunal's view. Section 92CE read with Rule 10CB operates only where a primary adjustment has been made in one of the specific situations the section lists, and the 90-day repatriation window attaches to that specific machinery; it cannot be borrowed as a general benchmark for the credit period allowable on outstanding receivables. The Tribunal instead directed the officer to adopt the credit period the TPO himself had adopted in the assessee's own case for the immediately preceding year that had reached the Tribunal.
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Statutory position — s.92CE(2A) to (2D): the one-time option to pay eighteen per cent additional income-tax instead of repatriating, and the three doors it closes — no deduction, no credit, no refund
CBDT Circulars & InstructionsCuts both ways
My associated enterprise will not send the money back. Can I simply pay tax on it and be done, and if I do, what do I give up?
Yes. Section 92CE(2A) gives the assessee an option, "without prejudice to the provisions of sub-section (2)", where the excess money or part of it has not been repatriated within the prescribed time, to "pay additional income-tax at the rate of eighteen per cent on such excess money or part thereof". The price of that option is stated in the next three sub-sections and it is absolute. Sub-section (2B) makes the payment "the final payment of tax in respect of the excess money or part thereof not repatriated" and provides that "no further credit therefor shall be claimed by the assessee or by any other person in respect of the amount of tax so paid". Sub-section (2C) provides that "No deduction under any other provision of this Act shall be allowed to the assessee in respect of the amount on which tax has been paid in accordance with the provisions of sub-section (2A)". Sub-section (2D) then closes the loop in the taxpayer's favour: once the additional income-tax is paid "he shall not be required to make secondary adjustment under sub-section (1) and compute interest under sub-section (2) from the date of payment of such tax". These four sub-sections were inserted by Act No. 23 of 2019 with effect from 1 September 2019.
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Statutory position — s.92CE(1): the FIVE gateways into a secondary adjustment, the one crore threshold, the AY 2016-17 cut-off, and the word "and" that was retrospectively replaced by "or"
CBDT Circulars & InstructionsCuts both ways
The TPO's order says I must now make a secondary adjustment. Which primary adjustments actually trigger s.92CE, and is there any threshold or year below which the section simply does not apply to me?
Section 92CE(1) is triggered by a primary adjustment to transfer price arising in any one of FIVE ways — made suo motu by the assessee in his return; made by the Assessing Officer and accepted by the assessee; determined by an advance pricing agreement entered into under s.92CC on or after 1 April 2017; made under the safe harbour rules framed under s.92CB; or arising from a resolution under the mutual agreement procedure under an agreement entered into under s.90 or s.90A. In any of those cases "the assessee shall make a secondary adjustment". The first proviso then takes the case out of the section altogether if EITHER (i) the amount of primary adjustment made in any previous year does not exceed one crore rupees, OR (ii) the primary adjustment is made in respect of an assessment year commencing on or before 1 April 2016. The word joining those two limbs was originally "and"; it was substituted by "or" by Act No. 23 of 2019 with retrospective effect from 1 April 2018, and that single word is what makes the exclusions workable.
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Statutory position — Rule 10CB: the five different starting points for the ninety-day repatriation clock, and the two SEPARATE interest rate bases — SBI one-year MCLR plus 325 basis points for a rupee transaction, six-month LIBOR plus 300 basis points for a foreign-currency one
CBDT Circulars & InstructionsCuts both waysValidity unconfirmed
My primary adjustment stands and the money is still with my overseas associated enterprise. When exactly do my ninety days start, and at what rate is the deemed advance to be charged interest?
Rule 10CB(1) gives the repatriation window as "on or before ninety days" from a starting point that differs with the source of the primary adjustment: from the s.139(1) due date where the adjustment was made suo motu in the return; from the date of the order of the Assessing Officer or the appellate authority where the adjustment in that order was accepted; where the adjustment is determined by an APA, from the date of filing the s.139(1) return if the APA was entered into on or before the due date, and from the END OF THE MONTH in which the APA was entered into if it came later; from the s.139(1) due date where the safe harbour option was exercised; and from the date the Assessing Officer gives effect under rule 44H to a mutual agreement procedure resolution. Rule 10CB(2) then fixes two different rate bases, and they are not interchangeable: for a transaction denominated in INDIAN RUPEES the imputed per annum interest is "at the one year marginal cost of fund lending rate of State Bank of India as on 1st of April of the relevant previous year plus three hundred twenty five basis points"; for a transaction denominated in FOREIGN CURRENCY it is "at six month London Interbank Offered Rate as on 30th September of the relevant previous year plus three hundred basis points". Clause (ii) still names LIBOR. LIBOR settings have been permanently discontinued and no replacement benchmark has been substituted into this rule, so for recent previous years the foreign-currency limb prescribes a rate that may not exist for 30 September of the relevant year.
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.