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Which event expressly triggers the secondary-adjustment provision in section 170(1) on the stated facts?

Question and options

Which event expressly triggers the secondary-adjustment provision in section 170(1) on the stated facts?

  1. The assessee makes a ₹20 lakh primary adjustment in its own return

  2. The assessee makes a ₹1.2 crore primary adjustment in its own return

  3. A comparable is identified but no primary adjustment is made

  4. The Assessing Officer proposes an adjustment that the assessee has not accepted

Answer and explanation

Correct answer: B - The assessee makes a ₹1.2 crore primary adjustment in its own return

Section 170(1)(a) of the Income-tax Act, 2025 requires a secondary adjustment where a primary adjustment of ₹1 crore or more is made by the assessee on its own in its return. A ₹20 lakh adjustment is below the threshold, and an adjustment by the Assessing Officer triggers the provision under section 170(1)(b) only once the assessee has accepted it.

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