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An Indian company accepts a primary transfer-pricing adjustment on a sale to its associated enterprise in Indonesia. It also has an associated enterprise in Germany, and neither enterprise is…

Question and options

An Indian company accepts a primary transfer-pricing adjustment on a sale to its associated enterprise in Indonesia. It also has an associated enterprise in Germany, and neither enterprise is resident in India. Can the excess money be repatriated to India by the German enterprise under section 170 of the Income-tax Act, 2025?

  1. No, as it must come from the Indonesian party to the transaction

  2. Yes, as it may come from any non-resident associated enterprise

  3. Yes, but only with the approval of the Assessing Officer

  4. No, as repatriation by another enterprise is a fresh transaction

Answer and explanation

Correct answer: B - Yes, as it may come from any non-resident associated enterprise

Section 170(3) of the Income-tax Act, 2025 allows excess money to be repatriated from any associated enterprise of the assessee that is not resident in India, so it need not come from the enterprise that was party to the adjusted transaction. No approval of the Assessing Officer is required for this choice.

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