(1) Where an approved tax exempted entity engages in transactions with any other subsidiary entity thereof 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 subsidiary entity in any income year is less   than the actual income as a result of such transaction,

In that case, the income to which the subsidiary entity has been under-computed shall be treated as income of the allowable tax exempt 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 a subsidiary entity of an approved tax exempted 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) any entity controls, directly or indirectly, shares carrying more than 25% (twenty-five percent) of the voting power of any other 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 an unrelated free market price (a price agreed between two parties);

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