Secondary adjustment for transfer pricing misalignment requires book realignment or a final tax option when excess funds remain offshore.

Secondary adjustment is required when a primary adjustment increases income or reduces loss and results in excess money held by an associated enterprise that is not repatriated within the prescribed time; such excess is treated as an advance from the assessee, necessitating book adjustments to align cash with the arm's length allocation, with prescribed interest or an option to pay an additional income-tax as final tax in lieu of the secondary adjustment.

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