CMA Final · Direct Tax Laws and International Taxation · Transfer Pricing
During proceedings on a referred transaction, the TPO finds an international transaction that was not included in the assessee's report under section 172 and was not referred to him. What does section 166 of the Income-tax Act, 2025 provide?
The TPO can deal with it. Under section 166(5), a transaction that was not referred, or was omitted from the section 172 report, and comes to his notice during proceedings is treated as though it had been referred to him, so he may determine its arm's length price.
- AThe provisions apply as if that transaction had been referred to the TPO under sub-section (1)Correct
- BThe TPO must ignore it until the Assessing Officer makes a fresh reference
- CThe transaction is deemed at arm's length because it was not referred
- DThe TPO must send it to the Board for guidelines under sub-section (15)
Explanation
Section 166(5) says a transaction that comes to the TPO's notice during proceedings, and either was not referred or was not reported under section 172, is treated as if referred under sub-section (1). He therefore may determine its arm's length price. No fresh reference or presumption of arm's length applies.
Did you get it right without looking?
One question tells you little. A timed set on Transfer Pricing shows your real accuracy, how long you take and where you lose marks.
More Transfer Pricing questions
- Under section 166 of the Income-tax Act, 2025, an Assessing Officer may refer the determination of the arm's length price of an internationa…
- During proceedings on a referred transaction, the TPO finds another international transaction that the assessee did not include in its repor…
- The TPO determines the arm's length price of a similar international transaction of an assessee for a tax year, and the assessee validly exe…
- The TPO determined the arm's length price of a transaction for tax year 2026-27 under section 166(6). The assessee wants to apply the same p…
- The TPO determined the arm's length price for a tax year under section 166(6). Under section 166(9), the assessee may opt to have that price…
- The Transfer Pricing Officer determined the arm's length price of an international transaction for tax year 2026-27 under section 166(6). Th…