made by the Assessing Officer/Transfer Pricing
Officer on account of profit split method, ignoring that the Transfer
Pricing Officer rejected the CUP method after ... made by the AO/TPO by applying profit split method,
ignoring the fact that TPO has rejected the CUP method after
30
Tolani Shipping
Yamaha Motor India Pvt. Ltd., New Delhi vs Assessee on 29 October, 2014
IN THE
5165/Del/2016
Global One India Pvt. Ltd. vs. DCIT
following Profit Split Method and, accordingly, the Assessing
Officer should have referred the matter
prescribes the methods of determining ALP, having
regard to the most appropriate method which will be
decided in accordance with the rules prescribed. Rule ... closely linked transactions. Rule 10B(1)(d) of the
Rules advocate profit split method of determining ALP
where international transactions involve transfer of
unique intangible
transaction shall be determined by any of the following
methods, being the most appropriate method(MAM), having regard to the nature of
transaction or class ... namely :--
(a) comparable uncontrolled price method (CUP);(b) resale price method;(RSPM)(c) cost
plus method;(CPM)(d) profit split method;(PSM)(e) transactional
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
than others, on a conceptual note,
transactional profit methods (i.e. Transactional
Net Margin Method and Profit Split Method) are
treated as methods of last ... method
and a transactional profit method can be
applied in an equally reliable manner, the
traditional transaction method is preferable to
the transactional profit method
Thereafter he held that, TNMM (Transactional Net Margin Method) is the most
appropriate method (MAM) for determinations of ALP (Arm's Length Price ... transactions and had rejected RPM (Resale Price Method), CUP
(Comparable Uncontrolled Price Method) and PSM (Profit Split Method) on the ground
that they were
credited to the profit & loss account cannot be termed as a "reserve" for the following reasons:
• The audited profit & loss account ... under- the head "Reserves and surplus".
• 'Reserves' mean profits earned by company and not distributed asdividend to the shareholders but kept
profit margin
realized by the enterprise............ from a comparable uncontrolled
transaction' and the other part talks of 'the net profit margin realized ... first part refers to the profit margin from internal
comparable uncontrolled transactions, the second part refers to profit margin
from an external comparable uncontrolled transaction
