For the purposes of this Chapter-

(1) “Arm’s Length Price” means a transaction price the terms of which (such as price, margin or profit sharing) do not differ from those prevailing in a in-comparable unrestricted transaction conducted between independent entities under comparable circumstances;

(2) “Associate Organization” means an organization which is directly or indirectly or through one or more intermediate entities related to another organization by management or control or participation in capital, and is bound by the following relationship with any other organization, namely:-

(a) the same person or class of persons including his/her wife/husband,s spouse, successors or predecessors), directly or indirectly or through one) or more intermediate entities, participates in the management or control or capital of both establishments;

(b) an establishment directly or indirectly holds shares of another establishment having more than 25% (twenty-five percent) voting power;

(c) the same person or class of persons [including his/her wife/husband, spouse, successors or predecessors having more than 25% (twenty-five percent) voting power of the company], directly or indirectly holds both the shares;

(d) more than half of the total members of the Board of Directors or Governing Board of an establishment are appointed by another establishment;

(e)any executive director or executive member of the governing board of an establishment appointed by the other establishment or in the case of both establishment is the same person;

(f) more than half of the total members of the Board of Directors or Governing Board of both establishment are appointed by the same person or group of persons;

(g) the executive directors or executive members of both establishment are appointed by the same person or persons,

(h) an establishment has effective power to control the decisions of another establishment;

(i) both establishments are members, subsidiaries or concerns of the same parent company or group;

(j) Both establishments are related on the basis of a relationship of mutual interest as defined by the rules;

(k) the cumulative deposit amount from one establishment to another exceeds 50% (fifty percent) of the book value of the total assets of the lending institution; or

(l) the accumulated aggregate amount of guarantee given by one establishment on behalf of another establishment exceeds 10% (ten percent) of the total debt book value of the other establishment;

(3) “Establishment” means any person or undertaking of any kind (including a permanent establishment of such person or undertaking);

(4) “Independent Establishment” means such establishment not being a subsidiary establishment;

(5) “International Transaction” shall means any transaction between any subsidiary company, one or both of which involves the purchase, sale or lease of non-resident, tangible or intangible property or the exchange of services, or the lending or borrowing of money, or the profits, income of such companies; any other transaction relating to losses, assets, financial position or economic value, and shall include any transaction of “B” of “C”. If “A” has authority over said transaction, in which case-

(a) subsidiaries of “B” and “A”; and

(b) “C” is not a subsidiary of “B”;

(6) “Property” means any product, article, material or item, patent, invention, formula, process, design, pattern, experience, copyright, trademark, trade name, brand name, literature, musical or artistic composition, franchise, license or shall include any contract, method, program, software, database, system, procedure, campaign, survey, investication, forecast, estimate, customer list, technical data, any vision or advertising or marketing, any item having actual value or any intangible property;

(7) “Record” means information, documents and records held by electronic means

(8) “Transfer Pricing Officer” means any income-tax authority empowered by the Board as a transfer pricing officer;

(9) “Transaction” shall include any understanding, agreement or undertaking between two or more parties, whether formal or in writing or not, or intended to be enforceable by any legal proceeding or not;

(10) “Uncontrolled Transaction” means any transaction made with an entity other than a Subsidiary.