Comment on the following independent situations, whether Jack Ltd. and Jill Inc. constitute associated enterprises under the provisions of Section 92A of the Income Tax Act, 1961: (iii) Jill Inc. has the power to appoint

As per section 92A of the Income-tax Act, 1961, two enterprises would be deemed to be associated enterprises, if at any time during the previous year, more than half of the board of directors of one enterprise are appointed by the other enterprise. In this case, since Jill Inc. has the power to appoint exactly half (and not more than half) of the directors of Jack Ltd., therefore they do not qualify as Associated Enterprises. Therefore, Jack Ltd. and Jill Inc. are not Associated Enterprises.