Computation of income from international transaction having regard to arm's length price—Section 92 of the Income-tax Act—Reference to Transfer Pricing Officer and his role—Regarding

Arm's length price determination governs income computation from international transactions; TPO sets price, AO adjusts income accordingly.

Computation of income from international transactions must follow the arm's length price determined by the Transfer Pricing Officer (TPO) under section 92C/92CA. The AO may refer transaction-specific international dealings with associated enterprises to the TPO using Form No. 2CEB as a prima facie basis, obtain the TPO's speaking order documenting methods, data and reasons, and thereafter compute total income having regard to that price while giving the taxpayer a formal opportunity to be heard.