Comment on the following independent situations, whether X Ltd. and Y Ltd. constitute associated enterprises under the provisions of Section 92A : X Ltd. holds whole of equity share capital of C Ltd. C Ltd. holds 30% equ

X Ltd. and Y Ltd. are Associated Enterprises. As per section 92A of the Income-tax Act, 1961, two enterprises are deemed to be associated enterprises if one enterprise holds, directly or indirectly, shares carrying not less than 26% of voting power in other enterprise. In this case, X Ltd. indirectly (through C Ltd.) holds more than 26% equity shares (i.e. 30%) in Y Ltd. and thus they qualify as associated enterprises.