Transfer pricing for insurance business can apply alongside section 44, but arm's length pricing must follow the prescribed method.

Section 44, which governs computation of insurance business income under the First Schedule, does not exclude transfer pricing provisions not expressly overridden; section 92 therefore operates separately where an international transaction exists. The text also notes that arm's length pricing must be benchmarked by a method that strictly conforms to rule 10B. In the illustrated dispute, the assessee's CUP benchmark was treated as unreliable because the comparables and assumptions were flawed, while the TPO's TNMM computation was also found methodologically unsound. The result was restoration for fresh determination of arm's length price rather than final acceptance of either approach.

---

---

Issues: (i) Whether the transfer pricing provisions in section 92 of the Income-tax Act, 1961 apply to an assessee carrying on insurance business whose income is computed under section 44 read with the First Schedule; (ii) whether the assessee's international transaction was correctly benchmarked under the CUP method and whether the TPO's TNMM-based adjustment was sustainable.

Issue (i): Whether the transfer pricing provisions in section 92 of the Income-tax Act, 1961 apply to an assessee carrying on insurance business whose income is computed under section 44 read with the First Schedule.

Analysis: Section 44 overrides the computational provisions specifically mentioned in that section and requires insurance business profits to be computed under the First Schedule, but it does not exclude other provisions of the Act not expressly covered by the non obstante clause. Section 92 creates a separate and additional computation for income arising from an international transaction by reference to arm's length price. The statutory scheme contemplates two computations: first, normal computation of business income under section 44 and the First Schedule, and second, transfer pricing computation under section 92 where an international transaction exists.

Conclusion: Section 92 applies to an assessee carrying on insurance business, and the objection based on section 44 was rejected.

Issue (ii): Whether the assessee's international transaction was correctly benchmarked under the CUP method and whether the TPO's TNMM-based adjustment was sustainable.

Analysis: The service arrangement showed deployment of NYLI personnel for advising and assisting the assessee in devising training programmes, and the material did not support the finding of pure consultancy services as accepted by the CIT(A). The CUP analysis adopted by the assessee rested on assumptions, mismatched comparables, and rates from dissimilar service providers operating in different fields. At the same time, the TPO's TNMM exercise did not conform to the method prescribed under rule 10B(1)(e), because the chosen benchmark and computation did not properly reflect the statutory method. Since both approaches were unsatisfactory, the addition could not be finally sustained on the existing record.

Conclusion: The CUP method adopted by the assessee was not accepted, the TPO's TNMM computation was also not approved, and the matter was restored for fresh determination of arm's length price.

Final Conclusion: The transfer pricing issue was not finally decided on merits and was sent back for fresh adjudication, while the legal position that section 92 can operate alongside section 44 in insurance business was affirmed.

Ratio Decidendi: A non obstante computation provision governing insurance business does not exclude transfer pricing adjustment under section 92 unless that provision is expressly overridden, and an arm's length price determination must be made only by a method that strictly conforms to the statutory rule.

---