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Provision of roll back

(Guest)

If someone can please explain with example the provision of roll back in Advance pricing agreement u/s 92cc of income tax act 1961. Thank you.

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Saurabh Maheshwari (B.com,ACA) (5923 Points)
Replied 07 October 2015

Hi Neha,

Roll back provisions means that the Advance pricing agreement(APA) entered can be adopted as basis for arriving transfer pricing in repsect of previous 4 Assessment Years.

(#An APA is an agreement b/w taxpayer and department prescribing the method of determining transfer price for the taxpayer's international transactions.)

For Eg. Wipro Ltd. entered into APA for a period of 3 years (AY 16-17 to AY 18-19) , in that case the method of arriving transfer price in this APA can be applied to last 4 AYs in arriving transfer price.

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(Guest)

Hi Saurabh Does it mean that transfer price determined by department under APA in that period (A.Y 16-17 to 18-19) would be taken for determining ALP for last previous A.Y (i.e A.Y 11-12 to A.Y 15-16). If thats the case then what is the time limit for completing assessment ?

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