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Showing contexts for: Profit Split Method in Jcit, (Osd), Cir-4(1), Kolkata, ... vs M/S M. K. Shah Exports Ltd., Kolkata on 17 August, 2018Matching Fragments
Rev enu e -IT A No s. 1 274 & 12 75 / Kol /201 6,andA s se s se e- 5 06 & 507 /Ko l /2 016 As s e s s men t Yea r s: 2 009 -10 & 20 10- 11 uncontrolled price method ( CUP method); (b) resale price method ( RPM); (c) cost plus method (CPM); (d) profit split method (PSM); (e) transactional net margin method (TNMM); and (f) any other method prescribed by the Board (so far as AY 2010-11 is concerned, CBDT has not prescribed any other method for pricing the foreign currency loan). Further, section 92C(2) mentions that the most appropriate method shall be applied in the manner as may be prescribed. The prescription, accordingly, has been provided in Rule 10B of IT Rules, 1962. In general, the CPM is used when a product is sold by a manufacturer or service provider, the RPM is used in case of a product or service being sold by a distributor, the TNMM is generally used when data is difficult to find in case of comparables at a gross profit level or where a less stricter approach to functional similarity is to be taken. The PSM is used where the income arising out of any particular transaction or class of transactions is to be split between the parties to the transaction - generally this method is applied where intangibles are concerned and both the parties to the transaction contribute to the creation of the intangible(s). In case of financial transactions, the CUP Method is preferred as the most appropriate method. Rule l0 B of the IT Rules, 1962 prescribes the following with regard to application of the CUP method:
Rev enu e -IT A No s. 1 274 & 12 75 / Kol /201 6,andA s se s se e- 5 06 & 507 /Ko l /2 016 As s e s s men t Yea r s: 2 009 -10 & 20 10- 11
(b) resale price method;
(c) cost plus method;
(d) profit split method;
(e) transactional net margin method;
(f) such other method as may be prescribed 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: