Rule 235 - Information and documents under section 506

Section 506 information/document furnishing. 235. (1) Every Indian concern referred to in section 506 shall maintain and furnish the information and documents in accordance with this rule. (2) The information shall be furnished in Form No. 163, electronically under digital signature, to the Assessing Officer having jurisdiction over the Indian concern, within ninety days from the end of the financial year in which a transfer of shares of, or interest in, a foreign company or entity referred to in section 9(10)(a) has taken place; where that transaction has the effect of directly or indirectly transferring rights of management or control over the Indian concern, the information shall instead be furnished within ninety days of that transaction. (3) The Indian concern shall maintain (with English translation where required) and produce on request from any income-tax authority: details of the immediate, intermediate, and ultimate holding company or entity; details of other Indian group entities; the shareholding/interest structure before and after transfer; any transfer contract or agreement; financial and accounting statements of the relevant foreign company or entity for the two years before transfer; information on the decision and implementation process of the transfer arrangement; information on the foreign company/entity's business operations, personnel, finance and properties, and internal/external audit or valuation reports underlying the consideration; the asset valuation report and supporting evidence on the location of the transferred share or interest; details of tax paid outside India relating to the transfer; a merchant-banker- or accountant-certified valuation report of the Indian and total assets, with supporting evidence; and documents issued in connection with the transaction under normal accounting practice. (4) Where multiple Indian concerns are constituent entities of the same group, one designated Indian concern may furnish the information on behalf of all others, provided the group has designated it in writing to the Assessing Officer. (5) This rule has no effect if the designated Indian concern fails to furnish the information as required. (6) The Director General of Income-tax (Systems) shall send a copy of Form No. 163 to the Assessing Officer having jurisdiction over the transferor whose income is chargeable under section 9(10). (7) The information and documents under sub-rule (3) shall be kept and maintained for eight years from the end of the relevant tax year. (8) For the purposes of this rule, "constituent entity" and "group" have the meanings assigned in section 511(10)(d) and (e) respectively; "immediate holding company or entity" means one directly maintaining a controlling interest in the Indian concern; "intermediate holding company or entity" means one controlling another company/entity while itself being controlled by, or a subsidiary of, a further entity; and "ultimate holding company or entity" means one having ultimate control of the Indian concern, directly or indirectly, without itself being controlled by, or a subsidiary of, any other entity.