Rationalisation of transfer pricing provisions for carrying out multi-year arm’s length price determination

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....icing Officer (TPO), for computation of their arm's length price (ALP). Section 92C provides for computation of arm's length price in relation to an international transaction or a specified domestic transaction. 3. The determination of ALP in transfer pricing provisions inter alia proceeds in the following manner - * the Assessing Officer (AO) may, refer the computation of the ALP with the previous approval of the Principal Commissioner or Commissioner, in relation to an international transaction or a specified domestic transaction entered in any previous year, to the TPO; * the TPO determine the ALP in relation to the said transaction in accordance with sub-section (3) of section 92C and sends a copy of his order to the AO and to the ....

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....ubject to the prescribed conditions [new sub-section (3B) in section 92CA]; (III) if the TPO declares that the option exercised by the assessee is valid,- * the ALP determined in relation to an international transaction or a specified domestic transaction for any previous year shall apply to the similar international transaction or the specified domestic transaction for the two consecutive previous years immediately following such previous year [new sub-section (3B) in section 92CA]; * the TPO shall examine and determine the ALP in relation to such similar transaction for such consecutive previous years, in the order referred to in sub-section (3) of section 92CA [new subsection (4A) in section 92CA]; * on receipt of such order from....