Section 92C(2) of the Income Tax Act

Income-tax Act, 2025: s.165

Section 92C(2) falls under section 92C of the Income-tax Act, 1961, which corresponds to section 165 (Determination of arm’s length price) of the Income-tax Act, 2025.

Read section 165 of the 2025 Act

Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.

The decision most relied on for Section 92C(2) is Aztec Software & Technologies Services Ltd. v. Asstt. CIT (107 ITD 141), cited in 90 of the 356 judgments on BharatTax that turn on this section.

Leading authorities on Section 92C(2)

Aztec Software & Technologies Services Ltd. v. Asstt. CIT
107 ITD 141 · 2007 · ITAT
90
citing judgments

OECD Transfer Pricing Guidelines can be referred to for resolving transfer pricing disputes in India, even though India is not an OECD member, provided they are consistent with Indian statutory regulations. Availability of exemption under Section 10A does not bar the applicability of Section 92C and 92CA.

Pr.CIT v. B.C. Management Services (P.) Ltd.
89 Taxmann.com 68 · 2018 · High Court
56
citing judgments

Notional interest on delayed payments received from an Associated Enterprise (AE) cannot be treated as part of the income for tax purposes, thereby no question of law arises regarding such adjustments by the TPO/AO.

CIT v. Thyssen Krupp Industries Pvt. Ltd.
381 ITR 413 · 2016 · High Court
47
citing judgments

Transfer pricing adjustments must be restricted to international transactions with associated enterprises and cannot be made at the entity level or in respect of transactions with unrelated parties.

Smt. Neena Syal v. ACIT
70 ITD 62 · 1999 · ITAT
39
citing judgments

Disallowance of expenses cannot be made if their genuineness is not challenged. For unexplained money, possession of gold jewellery by married ladies up to 500 grams is considered explained.

LI and Fung India Pvt. Ltd. v. CIT
361 ITR 85 · 2014 · High Court
32
citing judgments

The cost base for applying the operating profit over total cost margin in transfer pricing cannot be broadened to include costs not incurred by the assessee. Tax authorities cannot impute costs incurred by third parties or associated enterprises for computing the assessee's net profit margin.

CIT Vs. Thyssen Krupp Industries Pvt. Ltd. (2016) 381 ITR 413 (Bom.) and CIT v. Tara Jewels Exports (P). Ltd.
381 ITR 404 · 2016 · High Court
28
citing judgments

The Transfer Pricing Officer (TPO) cannot make adjustments to the entire segment of manufacturing activity. Adjustments can only be made to the extent of international transactions and only to the extent of arm's length price.

10, 12 and 17 of Bechtel India (P) Ltd. v. ACIT, Circle 4(2), New Delhi
85 Taxmann.com 121 · 2017 · High Court
23
citing judgments

Interest on outstanding receivables from associated enterprises is considered an international transaction under Section 92B, requiring separate benchmarking, and is not automatically covered by working capital adjustments.

Gujarat Alkalies & Chemicals Ltd. v. CIT
350 ITR 94 · 2013 · High Court
20
citing judgments

A new undertaking is not deprived of its status as a separate and distinct entity merely because it is to a certain extent dependent on an existing unit, if the nature of the technology and mechanism of production warrants it.

Schefenacker Motherson Ltd. v. ITO
123 TTJ 509 · 2009 · ITAT
19
citing judgments

The Transactional Net Margin Method (TNMM) requires the use of net operating profit, not cash profit, for determining Arm's Length Price (ALP), in line with Section 92C and Rule 10B(1) of the Income-tax Act.

West Cost Paper Mills (P.)\nLtd v. CIT
52 Taxmann.com 268 · 2014 · ITAT
19
citing judgments

The ITAT Mumbai, in the case of West Coast Paper Mills (P.) Ltd. v. CIT, concurred with the findings of the CIT(A) concerning deductions under Section 80IA.

Judgments on Section 92C(2)

Tetra Pak India Private Ltd., Pune vs. Dy.CIT, Cir.7, Pune

The appeal of the assessee is partly allowed for statistical purposes

ITA 111/PUN/2011[2006-07]Status: DisposedITAT Pune27 Aug 2019AY 2006-07

Bench: Shri D. Karunakara Rao, Am & Shri Vikas Awasthy, Jm आयकर अपील सं. / Ita No.111/Pun/2011 िनधा"रण वष" / Assessment Year : 2006-07 Tetra Pak India Private Ltd., Mayfair Towers, Wakdewadi, Shivajinagar, Pune-411005. .......अपीलाथ" / Appellant Pan : Aaact3467B बनाम / V/S. Dcit, Circle-7, ……""यथ" / Respondent Pune. Assessee By : Shri Nikhil Pathak Revenue By : Shri S. B. Prasad सुनवाई क" तारीख / Date Of Hearing : 02.07.2019 घोषणा क" तारीख / Date Of Pronouncement : 27.08.2019 आदेश / Order Per D. Karunakara Rao, Am: This Appeal Is Filed By The Assessee Against The Orders Of Assessing Officer/Tpo/Drp For The Assessment Year 2006-07. 2. The Grounds Raised By The Assessee Are As Under :- “Based On The Facts & Circumstances Of The Case, Tetra Pak India Private Limited (Hereinafter Referred To As ‘The Appellant’) Respectfully Craves Leave To Prefer An Appeal Under Section 253(1)(D) Of The Income- Tax Act, 1961 (Hereinafter Referred To As ‘Act’), Against The Order Dated 25 November 2010 Passed By The Deputy Commissioner Of Income Tax- Circle 7 (Hereinafter Referred To As ‘The Assessing Officer’) Under Section 143(3) Read With Section 144C(13) Of The Act In Pursuance Of The Directions Dated 20 September 2010 Issued By The Honorable Dispute Resolution Panel (Hereinafter Referred To As ‘The Honorable Drp’), On The Following Grounds: On The Facts & In The Circumstances Of The Case & In Law, The Honorable Drp & Consequentially The Learned Ao Have: I Grounds Of Objections In Respect Of Transfer Pricing Adjustment

For Appellant: Shri Nikhil PathakFor Respondent: Shri S. B. Prasad
Section 143(3)Section 144C(13)Section 253(1)(d)