Whether the Method applied by the TPO ie Profit Split Method (PSM) in
determination of Arm Length Price (ALP) of the Advertisement Marketing and
Promotion ... Appeal
No. 4 to 10.
30. II. Whether the Method of Profit Split Method (PSM) adopted by
the AO in determination Arm Length Price
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
share of residual profits belong to Tupperware
India;
4.2 not appreciating the fresh analysis by application of residual profit split
method ("RPSM") submitted ... Contribution profits split
method is concerned, the Panel agrees with the TPO that the method is too subjective to be
accepted as method of benchmarking
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
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
account of profit split method, ignoring that the TPO rejected
ITA No. 7035/Mum/2016
A.Y.2008-09
the CUP method after giving detailed ... account of profit split method, ignoring the fact that TPO has rejected the
cup method after giving detailed reasons in the order passed
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
fact that quotation submitted were treated as
unacceptable, either Profit Split Method (PSM) or Transactional Net Margin
Method (TNMM) be accepted the additional evidences ... additional documents, under ride 46A of
the Income Tax Rules, 1961.
Profit split method: This method, is used by the appellant company now,
because
while
computing adjustment.
Grounds in relation to Substantive adjustment using Residual
Profit Split Method approach
15. erred on facts and circumstances of the case ... application of the
method.
16.1 erred in considering the Appellant's own profitability for
undertaking a profit split instead of the combined profits
