Section 53

Subject to subsection (3) where a chargeable person in the basis period for a year of assessment enters into a transaction with another person for that year for the acquisition or supply of property or services, then, for all purposes of this act, that chargeable person shall determine and apply the arm’s length price for such acquisition or supply.

Where the Director general has reason to believe that any property or services referred to in subsection (2) is acquired or supplied at a price which is either less than or greater than the price which it might have been expected to

Undang-Undang Malaysia 34

fetch if the parties to the transaction had been independent persons dealing at arm’s length, he may in determination of the gross income, adjusted income or adjusted loss, statutory income, assessable income or chargeable income of the chargeable person, substitute the price in respect of the transaction to reflect an arm’s length price for the transaction.

Where the Director general, having regard to the circumstances of the case, is of the opinion that in the basis period for a year of assessment the value or aggregate of all financial assistance granted by a person to a chargeable person who is a resident, is excessive in relation to the fixed capital of such chargeable person, any interest, finance charge, other consideration payable for or losses suffered in respect of the financial assistance shall, to the extent to which it relates to the amount which is excessive, be disallowed as a deduction for the purposes of this act.

The transactions or the financial assistance referred to in subsection (2) or (4) respectively, shall be construed as transactions or financial assistance between—

In this section, “transaction” has the same meaning assigned to it in subsection 72(7).”.

Pindaan seksyen 83