conclusion that profit split method is the
most appropriate method. Under Rule 10 B(1)(d) profit split method is as
follows ... them, and there after the residual profits
are split among the AEs.
9.5. The profits need to be split among the AEs on the basis
Board. The methods provided being (a) comparable uncontrolled price
method; (b) resale price method; (c) cost plus method; (d) profit split
method; (e) transactional ... methods i.e.
a) comparable uncontrolled price method; b) resale price method; c)
cost plus method; d) transactional net margin method; e) profit split
method
determined by any one of the five methods, which is found to be the
most appropriate method, and goes on to lay down the manner ... methods
recognized by the rule are (i) comparable uncontrolled price method
(CUP), (ii) re-sale price method, (iii) cost plus method, (iv) profit split
method
prescribe, namely :--
(a) comparable uncontrolled price method;
(b) resale price method;
(c) cost plus method;
(d) profit split method;
(e) transactional net margin method ... prescribe, namely :--
(a) comparable uncontrolled price method;
(b) resale price method;
(c) cost plus method;
(d) profit split method;
(e) transactional net margin method
transfer pricing study report, the assessee had used profit split method as the
primary method of benchmarking supported by TNMM. It had selected 11
comparables ... split figures as obtained had to be benchmarked using
third party data, which was not done. He, therefore, held that the split profit
method adopted
sale Price, Cost Plus
method, Profit Split Method, Transactional Net
Marginal Method and such other method
prescribed by the Board. Though Rule 10B has
been ... prescribe, namely :--
(a) comparable uncontrolled price method;
(b) resale price method;
(c) cost plus method;
(d) profit split method;
(e) transactional net margin method
recognized the use of different measures of profit under the profit
split method. The relevant para of the guideline reads ... under:-
"2.131 Generally, the combined profits to be split in
a transactional profit split method are operating profits.
Applying the transactional profit split
said order:--
a) On a conceptual note, transactional profit methods (i.e.
TNMM and profit split method) are treated as methods of last
resort which ... length outcome other than through
a profit split or a profit comparison at the net profit level.
For example, if selling, general and administrative costs
Section 92CA prescribes various methods such as comparable uncontrolled
pricing (CUP) method, re-sale pricing method, cost plus method, profit split
method and transactional ... Section 92C prescribes various methods
such as comparable uncontrolled price (CUP) method, resale price method,
cost plus method, profit splitting method and transactional net margin
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
