profit to be split for
the associated enterprise from the controlled transactions in which the
associated enterprises are engaged. It then splits those profits between ... length. In general, the determination of the relevant
profits to be split and of the profit splitting factors should:
Be consistent with the functional analysis
altogether to purported Residual Profit Split Method, both of
which are not notified methods and recognised methods under
the Transfer Pricing Regulations, without providing ... same, failed to appreciate that the
Profit split method can be used only for splitting the profit and
not an expense
altogether to purported Residual Profit Split Method, both of
which are not notified methods and recognised methods under
the Transfer Pricing Regulations, without providing ... same, failed to appreciate that the Profit split
method can be used only for splitting the profit and not an
expense
However, the TPO separately benchmarked the royalty payment
using the Profit Split Method (PSM) as the most appropriate method and
made the necessary adjustment ... length. In general,
the determination of the relevant profits to be split and of the
profit splitting factors should: Be consistent with the functional
analysis
Bang/2021
Page 3 of 40
applying the Profit Split method ('PSM') as the most
appropriate method ('MAM') to benchmark ... length. In general, the determination of the
relevant profits to be split and of the profit splitting factors
should:
Be consistent with the functional analysis
transaction with AE[s] and in the guise of applying
Residual Profit Split Method benchmarked it separately by adopting
arbitrary process not known ... line test, split the AMP expenses into routine expenses and non-
routine expenses. The TPO chose to adopt "Profit Split Method" to
bench
documentation maintained by the Appellant and in the
application of profit split method ('PSM') as the MAM
without appreciating that ... length. In general, the determination of the
relevant profits to be split and of the profit splitting factors
should:
Be consistent with the functional analysis
OECD Guidelines (para 2.109) is
as below:
"A transactional profit split method may also be found to be the most
appropriate method in cases ... length. In general, the determination of
the relevant profits to be split and of the profit splitting factors should:
Be consistent with the functional analysis
learned AO/ learned TPO/ Hon'ble DRP erred in adopting Profit
Split Method ("PSM") for benchmarking the royalty transaction and
erroneously concluded ... length. In general, the determination
of the relevant profits to be split and of the profit splitting factors should:
Be consistent with the functional analysis
Contributory PSM, Comparable PSM and Residual Profit
Split Method. He initially proposed to split the profit in
the ratio of 80:20 between assessee ... length. In general,
the determination of the relevant profits to be split and of the profit splitting
factors should:
Be consistent with the functional analysis
