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Showing contexts for: Profit Split Method in Ge Medical Systems India Private ... vs Assessee on 30 June, 2015Matching Fragments
The ruling of the Pune, ITAT in the case of MSS India Pvt. Ltd. (supra) at para 22 of the order is as under :
" The consideration as to which method will be more beneficial to the revenue authorities is certainly not germane to the selection of most appropriate method. While there is no particular order or priority of methods which the assessee must follow, and no method can invariably be considered to be more reliable than others, on a conceptual note, transactional profit methods (i.e. Transactional Net Margin Method and Profit Split Method) are treated as methods of last resort which are pressed into service only when the standard methods, which are also termed as 'traditional methods', (i.e. Comparable Uncontrolled Price Method, Resale Price Method and Cost Plus Method) cannot be reasonably applied. The OECD guidelines also recognize this fact and state that transactional profit methods might be used to 'approximate arm's length conditions when traditional methods cannot be relied / applied alone or exceptionally cannot be applied at all'. The transaction profit methods should be applied only when standard or traditional methods are incapable of being properly applied in the facts of a case. While traditional methods seek to compute the prices at IT(TP)A Nos.332, 333 & 337/Bang/2011 M/s.GE Medical Systems India P.Ltd.
(a) comparable uncontrolled price method;
(b) resale price method;
(c) cost plus method;
(d) profit split method;
(e) transactional net margin method;
(f) such other method as may be prescribed24 by the Board. (2) The most appropriate method referred to in sub-section (1) shall be applied, for determination of arm's length price, in the manner as may be prescribed."
"Rule 10C. (1) For the purposes of sub-section (1) of section 92C, the most appropriate method shall be the method which is best suited to the facts and circumstances of each particular international transaction, and which provides the most reliable measure of an arm's length price in relation to the international transaction.