notification no.86/2015/f.no.500/1/2014 apa ii/so 2942 e section 92c of the income tax act 1961 transfer pricing computation of arm s length price notified tolerance limit under third proviso to sub section 2 of section 92c

2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(ii)] MINISTRY OF FINANCE (Department of Revenue) NOTIFICATION New Delhi, the 29th October, 2015 S.O. 2942(E).— In exercise of the powers conferred by the third proviso to sub-section (2) of section 92C of the Income-tax Act, 1961 (43 of 1961) read with proviso to sub-rule (7) of rule 10CA of the Income-tax Rules, 1962, the Central Government hereby notifies that where the variation between the arm’s length price determined under section 92C and the price at which the international transaction or specified domestic transaction has actually been undertaken does not exceed one percent. of the latter in respect of wholesale trading and three percent. of the latter in all other cases, the price at which the international transaction or specified domestic transaction has actually been undertaken shall be deemed to be the arm’s length price for Assessment Year 2015-2016. Explanation.- For the purposes of this notification, “wholesale trading” means an international transaction or specified domestic transaction of trading in goods, which fulfils the following conditions, namely:- (i) purchase cost of finished goods is eighty percent. or more of the total cost pertaining to such trading activities; and (ii) average monthly closing inventory of such goods is ten percent. or less of sales pertaining to such trading activities. [Notification No. 86 /2015/F. No. 500/1/2014-APA-II] ANCHAL KHANDELWAL, Under Secy. Printed by the Manager, Government of India Press, Ring Road, Mayapuri, New Delhi-110064 and Published by the Controller of Publications, Delhi-110054.