CMA Final · Direct Tax Laws and International Taxation · Transfer Pricing
The TPO determines the arm's length price of a similar international transaction of an assessee for a tax year, and the assessee validly exercises the option under section 166(9). For how many consecutive tax years immediately following that year can the same ALP apply?
The ALP determined by the TPO can apply to similar transactions for two consecutive tax years immediately following the year of determination. This needs the assessee to exercise the option in the prescribed manner and the TPO to declare the option valid by written order.
- AOne tax year
- BTwo consecutive tax yearsCorrect
- CThree consecutive tax years
- DFive consecutive tax years
Explanation
Section 166(9) provides that the ALP determined under sub-section (6) applies to similar transactions for the two consecutive tax years immediately following, if the assessee exercises the option in the prescribed form, manner and time, and the TPO declares the option valid. Three or five years are not provided.
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(7) as substituted w.e.f. 1-4-2026, the period of limitation for making an assessment order expires on 31 March of a year. …
- A reference was made to the TPO under section 166(1) and the time limit for the assessment order expires on 31 March of a year. Under sectio…
- During proceedings on a reference under section 166, the Transfer Pricing Officer notices an international transaction not included in the a…
- Under section 166, who is a Transfer Pricing Officer?
- Under section 166 of the Income-tax Act, 2025, an Assessing Officer wants to refer the determination of the arm's length price of an interna…
- During proceedings on a referred transaction, the TPO finds an international transaction that was not included in the assessee's report unde…