(1) Where an approved tax holiday entity engages in a transaction with any of its associated entities and if the Deputy Commissioner of Taxes is satisfied that, —

(a) the transaction is not at an open market price; and

(b) the income of any associated entity in any income year is less than the actual income as a result of such transaction, the extent to which the income of associate entity computed lesser shall be treated as income of the allowable tax holiday entity and shall be classified under “Income from other sources” for the said income year.

(2) For the purposes of this section,—

(a) an entity shall be deemed to be an associated enterprise of an approved tax holiday entity, if—

(i) any entity, directly or indirectly, or through one or more intermediaries, participates in the management or control or capital of any other entity; or

(ii) the same person or persons, including spouses and descendants, participate in the management or control or capital of both entities, directly or indirectly, or through one or more intermediaries; or

(iii) an entity, directly or indirectly, controls shares carrying more than 25% (twenty-five percent) of the voting power of another entity; or

(iv) the same person or persons, including spouses or descendants, control shares carrying more than 25% (twenty-five percent) of the voting power in both entities; or

(v) two entities are members of the same group;

(b) “open market price” means the price agreed between two unrelated parties in the open market;

(c) The term “entity” shall include any person.