Deemed Associated Enterprises – Section 92a(2) – Common Individual Control In Two Enterprise

Where one enterprise is controlled by an individual,

the other enterprise is also controlled by

  • such individual, or
  • his relative, or
  • jointly by such individual and relative of such individual.

Facts:

  • Mr. A controls Indian company (ICO), and
  • Foreign Company (FCO) is controlled by
    • A
    • Relative of Mr. A
    • Jointly by Mr. A and relative of Mr. A.

Issue:

  • Whether FCO & ICO will be deemed to be Associated enterprise ?

Solution:

  • Since, FCO is controlled by Mr. A/ Relative of Mr. A/ Jointly by Mr. A and his relative who has 100% voting rights in ICO, hence, both FCO and ICO will be deemed to be the Associated enterprise.
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