allocated lower cost to the related
party so as to increase its profitability and consequent to it, held that the Internal
TNMM ... profit. As
calculation of GP is very subjective and the India Accounting Standards does not
provide for the presentation of gross profit. Profit Split method
2018 Pepsico
India Holdings Pvt. Ltd., Gurugram.
applying different methods. For instance, in the
appeals for the Assessment Years ... adjustment
has been completed by applying 'Profit Split Method'
and for the Assessment Year 2013-14 from the stage
ground that once the
Revenue was split in terms of the profit split method, there was no
justification for making any additional payment on account ... that,
"once the revenue was split in terms of profit split method, there
was no justification for making any additional payment on account
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 ... resale price method;
(c) cost plus method;
(d) profit split method;
(e) transactional net margin method;
(f) such other method as may be prescribed
transaction shall be determined by any of the following methods,
being the most appropriate method, having regard to the nature of transaction or class ... prescribe, namely :--
(a) comparable uncontrolled price method;
(b) resale price method;
(c) cost plus method;
(d) profit split method;
(e) transactional net margin method
Residual Profit Split Method ("PSM") as the Most
Appropriate Method ("MAM") given multiple fallacies in application of
the method.
17. while ... Appellant in an arbitrary manner for computing profit split ratio
to allocate residual profits while applying PSM.
21. while applying PSM, Ld. TPO has erred
adjustment purely on estimate basis without following any
approved method for determination of arm's length price as
prescribed under the statutory provisions. Thus ... most appropriate method prescribed are as
under:-
i) Comparable Uncontrolled Price Method;
ii) Resale Price Method;
iii) Cost Plus Method;
iv) Profit Split Method
transaction:
(i)comparable uncontrolled price method;
(ii) resale price method;
(iii) costs plus method;
(iv) profit split method;
(v) transactional net margin method
Pr. Commissioner Of Income Tax - 6 vs Eight Roads Investments Advisors Pvt ... on 27 February
property or provision of services by
the enterprise;
(d) profit split method, which may be applicable mainly in
international transactions or specified domestic transactions
involving ... profit is then split amongst the enterprises
in proportion to their relative contributions, as evaluated under
sub-clause (ii);
(iv) the profit thus apportioned
