State with reasons, whether Jackson LLC., (incorporated in Japan) and Vijayshree Ltd. a domestic company, are/can be deemed to be associated enterprises for the transfer pricing regulations in the following independent s

As per Section 92A(2)(d) of the Income Tax Act, 1961, two enterprises are deemed to be associated enterprises if one enterprise is dependent on the other enterprise for the supply of raw materials or consumables required for the manufacture or processing of goods or articles or for the work carried out by the first enterprise, and such supplies are 90% or more of the total raw materials or consumables required by the first enterprise. In this situation, Jackson LLC supplies ₹740 crores of raw materials and consumables to Vijayshree Ltd., out of a total requirement of ₹800 crores. This amounts to (₹740 crores / ₹800 crores) * 100 = 92.5%. Since the supply of raw materials by Jackson LLC constitutes 92.5% of Vijayshree Ltd.'s total requirement, which is more than the specified threshold limit of 90%, Jackson LLC and Vijayshree Ltd. are deemed to be associated enterprises for the purpose of transfer pricing regulations under Section 92A(2)(d) of the Income Tax Act, 1961. The fact that prices are mutually agreed upon based on market conditions does not override the deeming provisions of Section 92A(2).