Section 163 — Meaning of international transaction. [S. 92B of the 1961 Act]

(1) For the purposes of this Chapter, the expression “international
transaction” means a transaction between two or more associated enterprises,
one of which is necessarily a non-resident, and includes—
( a) the purchase, sale, transfer, lease or use of tangible property, including
building, transportation vehicle, machinery, equipment, tools, plant,
furniture, commodity or any other article, product or thing;
( b) the purchase, sale, transfer, lease or use of intangible property, including
the transfer of ownership or the provision of use of rights regarding land
use, copyrights, patents, trademarks, licences, franchises, customer list,
marketing channel, brand, commercial secret, know-how, industrial
property right, exterior design or practical and new design or any other
business or commercial rights of similar nature;
( c) capital financing, lending or borrowing of money, including,—
( i) any type of long-term or short-term borrowing, lending or guarantee;
or
( ii) purchase or sale of marketable securities; or
( iii) any type of advance, payments or deferred payment or receivable
or any other debt arising during the course of business;
( d) provision of services, including provision of market research, market
development, marketing management, administration, technical ser -
vice, repairs, design, consultation, agency, scientific research, legal or
accounting service;
( e) a transaction of business restructuring or reorganisation, entered into
by an enterprise with an associated enterprise, irrespective of the fact
that it has any bearing on the profit, income, losses or assets of such
enterprises at the time of the transaction or at any future date;
( f) a mutual agreement or arrangement between two or more associated
enterprises for the allocation or apportionment of, or any contribution
19. Substituted by the Finance Act, 2026, w.e.f. 1-4-2026. Prior to its substitution, clause (c) read
as under :
“( c) other units, undertakings, enterprises or business of such assessee, or other person
referred to in section 140(13) in respect of a transaction referred to in section 144 or
the transactions referred to in Chapter VIII to which the provisions of section 140(9)
or (13) of this Act or section 80-IA(8) or (10) of the Income-tax Act, 1961 (43 of 1961)
are applicable.”
to, any cost or expense incurred or to be incurred in connection with a
benefit, service or facility provided or to be provided to any one or more
of such enterprises;
( g) any other transaction having a bearing on the profits, income, losses or
assets of such enterprises.
(2) A transaction entered into by an enterprise with a person other than an associ-
ated enterprise (“other person”) shall, for sub-section (1), be deemed to be an
international transaction entered into between two associated enterprises, if—
( a) there exists a prior agreement in relation to the relevant transaction
between such other person and the associated enterprise; or
( b) the terms of the relevant transaction are determined, in substance,
between such other person and the associated enterprise,
and the enterprise or the associated enterprise or both of them are non-residents,
irrespective of whether the other person is a non-resident or not.
(3) The expression “intangible property” shall include:—
( a) marketing related intangible assets, such as, trademarks, trade names,
brand names, logos;
( b) technology related intangible assets, such as, process patents, patent
applications, technical documentation such as laboratory notebooks,
technical know-how;
( c) artistic related intangible assets, such as, literary works and copyrights,
musical compositions, copyrights, maps, engravings;
( d) data processing related intangible assets, such as, proprietary computer
software, software copyrights, automated databases, and integrated
circuit masks and masters;
( e) engineering related intangible assets, such as, industrial design, product
patents, trade secrets, engineering drawing and schematics, blueprints,
proprietary documentation;
( f) customer related intangible assets, such as, customer lists, customer
contracts, customer relationship, open purchase orders;
( g) contract related intangible assets, such as, favourable supplier, contracts,
licence agreements, franchise agreements, non-compete agreements;
( h) human capital related intangible assets, such as, trained and organised
work force, employment agreements, union contracts;
( i) location related intangible assets, such as, leasehold interest, mineral
exploitation rights, easements, air rights, water rights;
( j) goodwill related intangible assets, such as, institutional goodwill, pro -
fessional practice goodwill, personal goodwill of professional, celebrity
goodwill, general business going concern value;
( k) methods, programmes, systems, procedures, campaigns, surveys, studies,
forecasts, estimates, customer lists, or technical data;
( l) any other similar item that derives its value from its intellectual content
rather than its physical attributes.