An amount paid for investment in share capital of subsidiaries outside India is not in the nature of an “international transaction” as defined in s. 92-B. Transfer pricing provisions are not applicable to transactions where there is no income (Circular No. 14, dated 22/11/2011, Dana Corporation 321 ITR 178 (AAR) & Amiantit International 322 ITR 678 (AAR) referred)

S. 40(a)(i) does not impose an absolute disallowance for failure to deduct TDS. It provides that the deduction shall be allowed in the year of deduction of the TDS. As the assessee had in fact deducted TDS in the immediately succeeding year, it had substantially complied with the provision. Also, as the fact that TDS was not deducted was stated in the tax audit report which was filed with the return, it could not be said that the assessee has not disclosed the correct particulars of income