Section 92A of the Income-tax Act, 1961 defines the term 'associated enterprise' for the purposes of transfer pricing regulations. This section is crucial as it determines the scope of entities whose transactions are subject to transfer pricing rules. An enterprise is considered an associated enterprise if there is direct or indirect participation in the management, control, or capital of another enterprise, or if both enterprises are under common control. The significance of this section lies in its impact on international transactions and the requirement for such transactions to be conducted at arm's length prices. The statutory test involves examining the relationship between enterprises to determine if they qualify as associated enterprises. The burden of proof typically lies with the taxpayer to demonstrate that the transactions with associated enterprises are at arm's length. In practice, this section is significant for multinational corporations as it affects how they report and justify their cross-border transactions to avoid tax avoidance through transfer pricing.