Comment on the following independent situations, whether P.C. Ltd. (domestic company) and R.D. Ltd. (incorporated in UK) constitute "associated enterprises" under the provisions of section 92A of Income Tax Act, 1961: (v

(v) P.C. Ltd and R.D. Ltd. are associated enterprises: Under section 92A of the Income tax Act, 1961, two enterprises are deemed to be associated enterprises if any person or enterprise holds, directly or indirectly, share carrying not less than 26% of the voting power in each of such enterprises. In this situation, since Gulgulia Ltd. directly holds 40% shareholding in P.C Ltd. and 30% shareholding in RD Ltd., hence P.C. Ltd and R.D. Ltd. are associated enterprises.