(ii) Without prejudice to the answer to (i) above, assuming that transfer pricing provisions are applicable in this case, and the Assessing Officer…

Where the Assessing Officer has made a primary adjustment of 440lakhs to the transfer price and the same has been accepted by Axis Research Solutions, secondary adjustment has to be made in the books of account as per section 92CE, since the primary adjustment made by the Assessing Officer and accepted by Axis Research Solutions exceeds 100lakhs and the primary adjustment is in relation to P.Y.2022-23. The excess money determined based on the primary adjustment has to be repatriated to India within 90 days from the date of order, failing which the same would be deemed as an advance and interest would be computed at the one-year marginal cost of fund lending rate of State Bank of India as on 1.4.2024 + 3.25%, since the international transaction has been denominated in Indian Rupees. In this case, since the excess money has not been repatriated within 90 days, the same would be deemed to be an advance made by Axis Research Solutions to Emerald Inc. and interest would be computed @12.25% (9% + 3.25%) from 1.4.2025, being the date of the order of the Assessing Officer. The interest would amount to 53.90 lakhs (i.e., 12.25% of 440lakhs) for the P.Y.2024-25. Alternatively, Axis Research Solutions can opt to pay additional income tax @20.9664% (tax @18% plus surcharge @12% plus cess @4%) on 440 lakhs, which would amount to 92,25,216. In such a case, secondary adjustment is not required to be made.