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8. The learned transfer pricing officer noted the above functions of the assessee and noted that the compensation model is based on the arrangement between assessee and its associated enterprises and a shared in the ratio of 50:50. Therefore it means that assessee has entered into some kind of profit split method. However he accepted the transactional net margin method as the most appropriate method as well as also accepted the profit level indicator of OP/OC. However he rejected the use of multiple year Page | 6 data used by the assessee for computation of the comparable margins. The learned transfer pricing officer noted that assessee did not apply proper criteria for application of the filter as well as did not select the domain by applying proper criteria and multiple year data has been used for benchmarking. Therefore the learned assessing officer primarily selected seven comparables and computed the margin. Thereafter after giving the proper show cause notice to the assessee and applying the new filter and using the current year data the learned transfer pricing officer proposed an adjustment of ₹ 87,200,000 of adjustment on account of freight and forwarding segment by selecting following comparable sets.

...5.2. Profit share between the Principal and Agent shall be on a 50/50 basis and it shall be calculated only on the sea freight or airfreight, irrespective of whether freight is prepaid or collect..."

17. Thus, it can be seen that mere use of the word 'agency' is not sufficient to conclude that the Assessee and the AEs do not operate on principal-to-principal basis and nomenclature is not the determinative factor. The above mentioned evidences filed clear show that JAS India has not been impelled by any instructions from AEs/Affiliates and the specific clause to this effect has been mentioned in the agreement. It has also been informed to us that above principle of 50:50 Profit Split are a widely accepted pricing formula prevalent across the global freight-forwarding industry at large. In support, the Ld. Counsel for the Assessee has placed reliance on recent ruling in case of Balmer Lawrie & co. Ltd. [2016] 68 taxmann.com 384 (Kolkata- Trib.), wherein 50:50 profit Page | 18 split method has been upheld. In the said case this issue had come up for, wherein Tribunal vide para 32 has categorically stated that merely the use of the word agency in the agreement does not amount that there exists a relationship of agency. The Tribunal held that: