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10.6 The Hon'ble DRP has failed to appreciate that the Appellant is in fact the economic owner of the brand with unfettered right to use the brand although Himalaya Global Holdings Ltd., may be legal owner for the purpose of international registration of products.

10.7 Without prejudice to the above, the Hon'ble DRP has failed to appreciate that as the appellant is a manufacturer as well as full-fledged distributor of its own products using its own technology and comprehensive distribution network, the profit split method is not applicable as per internationally accepted guidelines and Indian Transfer Pricing Laws.

10.10 Without prejudice to the above, the Hon'ble DRP is not justified in upholding the action of the learned TPO in arriving at the normal AMP expenditure by dividing the advertisement and selling expenses of the comparable enterprises by the turnover of those companies without making an FAR analysis and without making any suitable adjustment for various qualitative and quantitative differences.

10.11 Without prejudice to the above, the Hon'ble DRP is not justified in upholding the action of the Learned TPO in identifying ₹ 267,87,95,129/- as alleged AMP expenditure and applying the purported profit split method(PSM) though the said sum essentially represents all the expenses debited to profit and loss account below the gross profit level.

10.13 The Hon'ble DRP and Learned TPO are not justified in taking contradictory positions between justification for royalty adjustment and justification for AMP expenditure.

10.14 Without prejudice to other grounds, the Ld. TPO has erred in changing the methodology of computation of ALP of AMP arbitrarily from Bright Line Test followed till AY 2012-13 altogether to purported Residual Profit Split Method, both of which are not notified methods and recognised methods under the Transfer Pricing Regulations, without providing the basis for the change, erred under the principles of consistency, when the facts remained same, failed to appreciate that the Profit split method can be used only for splitting the profit and not an expense. The Hon'ble DRP erred in confirming the same.

(i) Comparable Uncontrolled Price Method;

(ii)    Resale Price Method;
(iii)   Cost Plus Method;
(iv)    Profit Split Method;
(v)     Transactional Net Margin Method;
(vi)    Such other method as may be prescribed by the Board.

Sub-section (2) of section 92C of the Act provides that the MAM referred to in sub-section (1) shall be applied, for determination of the ALP, in the manner as may be prescribed.

Rule 10B of the IT Rules, 1962 provides for the determination of ALP under section 92C of the Act. The TPO in the case on hand has applied CPM as the MAM. Rule 10B(1)(c) deals with the determination of ALP as per CPM and the same is extracted hereunder:--