International Taxation

[LALIT MUNOYAT]

Sec 9292A92F etc.

An Individual holds 95% of the share capital of a company in the UK. He has given an interest free loan to it without interest. Whether Transfer pricing adjustment on account of interest will be made to the income of the individual. The loan has been given out of the savings of the individual without borrowing any sum from the market.? Whether the Individual who is not engaged in any other business in India except as a MD of a company wherein also he holds 95% of the equity, be treated as 'enterprise' so as to be covered in the definition of 'Associated Enterprises. . The sources of his income are: Salary as MD, Income from House Property, Dividend etc. (No business Income)

AI Summary

Interest-Free Loan by Major Shareholder: Are Transfer Pricing Adjustments Applicable Without Business Income? An individual, holding 95% of a UK company's share capital, provided an interest-free loan to the company from personal savings. The query seeks to determine if transfer pricing adjustments on account of interest will apply to the individual's income, considering he is not engaged in any other business in India apart from being a Managing Director of another company where he also holds 95% equity. The individual's income sources include salary, house property income, and dividends, with no business income. Responses differ: one suggests transfer pricing adjustments are applicable, while another argues they are not due to the absence of business income.