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97. Safe harbour for eligible specified domestic transaction.—

 

(1) The transfer price declared by an eligible assessee in respect of an eligible specified domestic transaction for a tax year shall be accepted by the income-tax authorities, if, —

(a) the option exercised by the said assessee is treated to be validly exercised under rule 98; and

b) it is in accordance with the circumstances as specified in sub-rule (2).

 

(2) The circumstances referred to in sub-rule (1) in respect of the eligible specified domestic transaction specified in column B of the following Table shall be as specified in column C thereof:

Table

Sl. No.

Eligible specified domestic Transaction

Circumstances

A

B

 C

1.

Supply of electricity, transmission of electricity, wheeling of electricity, as the case may be.

The tariff in respect of supply of electricity, transmission of electricity, wheeling of electricity, as the case may be, is determined or the methodology for determination of the tariff is approved by the Appropriate Commission in accordance with the provisions of the Electricity Act, 2003 (36 of 2003).

2.

Purchase of milk or milk products.

 

The price of milk or milk products is determined at a rate which is fixed on the basis of the quality of milk, namely, fat content and Solid Not Fat (SNF) content of milk and —

 

(a) the said rate is irrespective of —

 

(i) the quantity of milk procured; or

 

(ii) the percentage of shares held by

the members in the cooperative society; or

 

(iii) the voting power held by the members in the society; and

 

(b) such rates are routinely declared by the co-operative society in a transparent manner and are available in public domain.

 

(3) No comparability adjustment and allowance under section 165(3)(a)(ii) shall be made to the transfer price declared by the eligible assessee and accepted under sub-rule (1).

 

(4) The provisions of sections 171 and 172 in respect of a specified domestic transaction shall apply irrespective of the fact that the assessee exercises his option for safe harbour in respect of such transaction.