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5. That on facts and circumstances of the case and in law, the AO / DRP / TPO erred in law and on facts, in applying Profit Split Method ("PSM") to benchmark the alleged international transaction of incurring excessive AMP expenditure without establishing as to how PSM was the most appropriate method in terms of section 92C read with Rule 10B of the Rules and had applicability to the facts of the instant case.

5.1. That on the facts and circumstances of the case, DRP/ TPO erred in re- characterizing the functional analysis of the appellant and further erred in alleging that in the instant case the overseas entities is an entrepreneur and AE has assigned vital function that otherwise should have been carried out by itself.

B.4. That on the facts and in the circumstances of the case and in law, in charging interest under section 234B of the Act.

I.T.A .No. 1052/DEL/2016

1. On the facts and in the circumstances of the case and in law, Hon'ble DRP has erred in restricting the ALP from Rs. 74,59,78,408/- to Rs. 53,21,45,194/- u/s 92CA(3) of the Income Tax Act 1961.

2. On the facts and in the circumstances of the case and in law, the Hon'ble DRP-1 has ignored the facts that such expense i.e. selling expenses are included in the AMP expense of the AE, which is taken as a base for the profit split. If selling and distribution expenses are to be excluded from the assessee's AMP expense, the same should be excluded from the AMP expense f the AE. However, that information is not available in public domain. If only the selling and distribution expense of the assessee are removed and not of the AE, the PSM (Profit Split Method) calculation will go wrong.

41. Grounds of appeal Nos. 5, 5.1, & 5.2 are relating to incorrect approach of the TPO to benchmark the alleged international transaction using Profit Split Method ("PSM"). The Ld. AR submitted that the TPO made TP adjustment of INR 74,59,78,403 in the AY 2011-12 on the following basis:

> TPO concluded that Assessee is incurring excessive AMP expenditure in India basis higher AMP expenditure of Assessee (as a percentage of sales) compared to Canon Inc., AMP percentage to sales (at consolidated level) (refer para 20 at page 96 of paper-book

S. No. Rule 10B(1) (d) of the Rules Assessee's submissions "profit split method, which may As per sub-clause (d) of Rule be applicable mainly in 10B(1) PSM is applicable where international transactions [or the transaction involves specified domestic transactions] transfer of unique intangible or involving transfer of unique multiple inter related intangibles or in multiple international transactions from international transactions [or which arm's length price specified domestic transactions] cannot be separately which are so interrelated that determined.