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“profit split method”

Transfer PricingSection 92CSection 92C110 judgments

The decision most relied on for profit split method is DIT v. Morgan Stanley Co. Inc. (399 ITR 34), cited in 162 judgments on BharatTax.

Leading authorities on profit split method

DIT v. Morgan Stanley Co. Inc.
399 ITR 34 · 2017 · Supreme Court
162
citing judgments

Once a transfer pricing analysis has been undertaken for an Indian associated enterprise, no further profits are attributable to it as a Permanent Establishment, thereby extinguishing the need for additional profit attribution.

Asstt. CIT v. MSS India (P.) Ltd.
32 SOT 132 · 2009 · ITAT
26
citing judgments

The Comparable Uncontrolled Price (CUP) method is preferred when comparable transactions with third parties are available to determine if transfer prices are at arm's length. Transactional profit methods are considered methods of last resort.

Global One India (P). Ltd. v. Assisstant Commissioner
44 Taxmann.com 100 · 2014 · ITAT
14
citing judgments

When entities are highly integrated and their combined efforts generate revenue, the Profit Split Method (PSM) is the appropriate method for determining arm's length price for transactions.

Judgments citing profit split method

Fujitsu India P.Ltd, New Delhi vs. DCIT, New Delhi

The appeal of the assessee is allowed

ITA 693/DEL/2022[2013-14]Status: DisposedITAT Delhi24 Jan 2025AY 2013-14

Bench: Shri S. Rifaur Rahman & Shri Anubhav Sharmaassessment Year: 2013-14 Fujitsu India P. Ltd., Vs National Faceless Assessment Rectangale-1, D-4, Centre, District Centre, New Delhi. Saket, New Delhi – 110 019. Pan: Aaacf4170D (Appellant) (Respondent) Assessee By : Shri K.M. Gupta, Advocate, Ms Shruti Khimta, Ar & Shri Kaskaran Singh, Ca Revenue By : Shri S.K. Jadhav, Cit-Dr Date Of Hearing : 07.01.2025 Date Of Pronouncement : 24.01.2025 Order

For Appellant: Shri K.M. Gupta, AdvocateFor Respondent: Shri S.K. Jadhav, CIT-DR
Section 143(3)

adjustment. In the said show cause notice the Ld. TPO changed the approach of benchmarking the alleged international transaction of AMP spend using profit split method. The Assessee vide submissions dated December 29, 2020 and December 17, 2020 contested / contended that the analysis carried ... Substantive Basis 2.3 The Ld. TPO proposed an adjustment amounting to INR 4,13,09,280 on a substantive basis by applying Residual Profit Split Method (“RPSM”) which is extension of BLT for the purpose of benchmarking, the AMP expense incurred by the Assessee to determine the reimbursement of alleged

Tupperware India Pvt. Ltd., New Delhi vs. JCIT, Special Range- 9, New Delhi

Accordingly, ground Nos. 10, 11 and 12 are allowed subject to the above directions

ITA 8135/DEL/2018[2014-15]Status: DisposedITAT Delhi25 Jul 2024AY 2014-15

Bench: Shri Shamim Yahya & Shri Vimal Kumartupperware India Pvt. Ltd., Vs. Jcit, Spl. Range 9, 204 – 206, Tolstoy House, New Delhi. 15, Tolstoy Marg, Connaught Place, New Delhi – 110 001. (Pan : Aaact3770D) (Appellant) (Respondent) Assessee By : Shri Rohit Tiwari, Advocate Ms. Tanya, Advocate Revenue By : Shri Zafrul Haque Tanweer, Cit Dr Date Of Hearing : 08.07.2024 Date Of Order : 25.07.2024 Order Per Shamim Yahya: This Appeal Filed By The Assessee Is Directed Against The Order Of The Assessing Officer Dated 26.10.2018 Pursuant To The Directions Issued By The Ld. Drp For The Assessment Year 2014-15. 2. Grounds Of Appeal Taken By The Assessee Read As Under :-

For Appellant: Shri Rohit Tiwari, AdvocateFor Respondent: Shri Zafrul Haque Tanweer, CIT DR
Section 143(3)Section 144C

statutory mandate. 7. That the Hon'ble DRP/Ld. Assessing Officer/Ld. TPO have erred in not appreciating the analysis by application of contribution profit split method furnished by the Appellant during the course of proceedings before Ld. TPO to demonstrate that payment of royalty is at arm's length and appropriate ... Tupperware India. 8. That the Hon'ble DRP/Ld. Assessing Officer/Ld. TPO have erred in not appreciating the analysis by application of residual profit split method submitted by the Appellant on a without prejudice basis during the course of proceedings before Ld. TPO stating the same has been undertaken based

Hospira Healthcare India Private Limited, Chennai vs. DCIT, Chennai

ITA 469/CHNY/2017[2012-13]Status: DisposedITAT Chennai22 Jul 2024AY 2012-13

Bench: Shri Aby T. Varkey & Shri Jagadishआयकर अपील सं./Ita No.469/Chny/2017 िनधा<रण वष< /Assessment Year: 2012-13 M/S. Hospira Healthcare India The Dy. Commissioner Of Pvt. Ltd., Vs. Income Tax, Sri-Nivas, New No.86 (Old No.89), Corporate Circle-2(2), Gn Chetty Road, T Nagar, Chennai. Chennai – 600 017. [Pan: Aaabco 2190F] (अपीलाथ"/Appellant) (""यथ"/Respondent) अपीलाथ" की ओर से/ Appellant By : Shri Sriram Seshadri, C.A Jkथ" की ओर से /Respondent By : Shri A. Sasikumar, Cit सुनवाई की तारीख/Date Of Hearing : 25.04.2024 घोषणा की तारीख /Date Of Pronouncement : 22.07.2024 आदेश / O R D E R Per Jagadish, A.M : Aforesaid Appeal Filed By The Assessee Against The Assessment Order Passed By The Dcit, Corporate Circle-2(2), Chennai U/S.143(3) R.W.S. 144C(13) Of The Income Tax Act, 1961 (Hereinafter “The Act”) For The Assessment Year 2012-13, In Pursuance Of The Directions Issued By The Dispute Resolution Panel, Bengalore (Hereinafter ‘Drp’) Vide Directions Dated 09.11.2016. :- 2 -:

For Appellant: Shri Sriram Seshadri, C.A JKFor Respondent: Shri A. Sasikumar, CIT
Section 143(3)

prescribe. Five specific methods have been set out, namely, (a) comparable uncontrolled price method; (b) resale price method; (c) cost plus method; (d) profit split method; (e) transactional net margin method. Sub-section (2) of section 92C mandates that: `The most appropriate method referred to in sub-section (1) shall

DCIT Circle-10(1), New Delhi vs. Htc India Pvt Ltd, Gurgaon

In the result, the appeal of the Revenue is dismissed

ITA 1785/DEL/2020[2011-12]Status: DisposedITAT Delhi30 May 2024AY 2011-12

Bench: Sh. Kul Bharatdr. B. R. R. Kumar

For Appellant: NoneFor Respondent: Sh. Vivek Kr. Upadhyay, Sr. DR
Section 271(1)Section 271(1)(c)Section 92BSection 92C

nature of transaction or class of transaction etc., namely (a) comparable uncontrolled price method; (b) resale price method; (c) cost plus method; (d) profit split method; (e) transactional net margin method; (f) such other method as may be prescribed by the Board. Sub-section (2) provides that the most appropriate

A.T. Kearney Limited, Gurgaon vs. ACIT, Circle Int. Tax 1(1)(1), New Delhi

In the result, the appeal of the assessee in ITA No

ITA 498/DEL/2022[2017-18]Status: DisposedITAT Delhi11 Mar 2024AY 2017-18

Bench: Shri Saktijit Dey & Shri N.K. Billaiya

For Appellant: Shri Ajay Vohra, Sr. AdvFor Respondent: Shri Rajesh Kumar, CIT-DR
Section 143(3)

method, without providing any information on comparable uncontrolled transactions wherein service provider charged NIL price for providing similar services, and 1.3.1. accepting the Profit Split Method with respect to the revenue received from network fees but rejecting the same PSM for the expenses incurred to earn the same profits

A.T Kearney Ltd -India, Gurugram vs. ACIT, Circle International Taxation 1(1)(1), New Delhi

In the result, the appeal of the assessee in ITA No

ITA 2257/DEL/2022[2018-19]Status: DisposedITAT Delhi11 Mar 2024AY 2018-19

Bench: Shri Saktijit Dey & Shri N.K. Billaiya

For Appellant: Shri Ajay Vohra, Sr. AdvFor Respondent: Shri Rajesh Kumar, CIT-DR
Section 143(3)

method, without providing any information on comparable uncontrolled transactions wherein service provider charged NIL price for providing similar services, and 1.3.1. accepting the Profit Split Method with respect to the revenue received from network fees but rejecting the same PSM for the expenses incurred to earn the same profits

Shree Cement Limited, Beawar vs. National Faceless Assessment Centre, Delhi

In the result, the appeal of the Revenue in ITA No

ITA 500/JPR/2023[215-16]Status: DisposedITAT Jaipur21 Feb 2024

Bench: or at the time of hearing of this appeal.

For Appellant: Sh. Dilip B Desai(C.A.)For Respondent: Sh. Alka Gautam (CIT) (V.H) &
Section 115JSection 143Section 143(3)Section 144BSection 144B(1)(xvi)Section 80Section 80I

head to the final destination, determined as per the tariff notified by the Indian Railways. The assessee benchmarked this transaction by applying the profit split method to incorporate the inter unit provision of services. The TPO has rejected the profit split method adopted by the assessee and proceeded to apply

Shree Cement Limited, Beawar vs. National Faceless Assessment Centre, Deputy Commissioner of Income Tax, Circle -2, Ajmer

ITA 498/JPR/2023[2018-19]Status: DisposedITAT Jaipur21 Feb 2024AY 2018-19
For Appellant: Sh. Dilip B Desai(C.A.)For Respondent: Sh. Alka Gautam (CIT) (V.H) &
Section 115JSection 143Section 143(3)Section 144B(1)(xvi)Section 80Section 80I

head to the final destination, determined as per the tariff notified by the Indian Railways. The assessee benchmarked this transaction by applying the profit split method to incorporate the inter unit provision of services. The TPO has rejected the profit split method adopted by the assessee and proceeded to apply

Shree Cement Limited, Beawar vs. National Faceless Assessment Assessment Centre, Deputy Commissioner of Income Tax, Circle-2, Ajmer

ITA 497/JPR/2023[2017-18]Status: DisposedITAT Jaipur21 Feb 2024AY 2017-18
Section 115JSection 143Section 143(3)Section 144B(1)(xvi)Section 80Section 80I

head to the final destination, determined as per the tariff notified by the Indian Railways. The assessee benchmarked this transaction by applying the profit split method to incorporate the inter unit provision of services. The TPO has rejected the profit split method adopted by the assessee and proceeded to apply

Shree Cement Limited, Beawar vs. National Faceless Assessment Centre, Deputy Commissionerof Income Tax, Circle -2, Ajmer

In the result, the appeal of the Revenue in ITA No

ITA 496/JPR/2023[2016-17]Status: DisposedITAT Jaipur21 Feb 2024AY 2016-17

Bench: or at the time of hearing of this appeal.

For Appellant: Sh. Dilip B Desai(C.A.)For Respondent: Sh. Alka Gautam (CIT) (V.H) &
Section 115JSection 143Section 143(3)Section 144BSection 144B(1)(xvi)Section 80Section 80I

head to the final destination, determined as per the tariff notified by the Indian Railways. The assessee benchmarked this transaction by applying the profit split method to incorporate the inter unit provision of services. The TPO has rejected the profit split method adopted by the assessee and proceeded to apply

Assisstant Commissioner of Income Tax, Ajmer vs. Shree Cement Ltd, Beawar

ITA 490/JPR/2023[2016-17]Status: DisposedITAT Jaipur21 Feb 2024AY 2016-17
Section 115JSection 143Section 143(3)Section 144B(1)(xvi)Section 80Section 80I

head to the final destination, determined as per the tariff notified by the Indian Railways. The assessee benchmarked this transaction by applying the profit split method to incorporate the inter unit provision of services. The TPO has rejected the profit split method adopted by the assessee and proceeded to apply

Assisstant Commissioner of Income Tax, Ajmer vs. Shree Cement Ltd, Beawar

ITA 489/JPR/2023[2015-16]Status: DisposedITAT Jaipur21 Feb 2024AY 2015-16
For Appellant: Sh. Dilip B Desai(C.A.)For Respondent: Sh. Alka Gautam (CIT) (V.H) &
Section 115JSection 143Section 143(3)Section 144B(1)(xvi)Section 80Section 80I

head to the final destination, determined as per the tariff notified by the Indian Railways. The assessee benchmarked this transaction by applying the profit split method to incorporate the inter unit provision of services. The TPO has rejected the profit split method adopted by the assessee and proceeded to apply

Star Television Entertainment Ltd, Mumbai vs. DDIT (It) 2(1), Mumbai

ITA 1814/MUM/2014[2009-10]Status: DisposedITAT Mumbai08 Dec 2023AY 2009-10

Bench: Shri Amit Shukla () & Ms. Padmavathy S. ()

Section 143(3)

entrepreneurial activities necessary to start a successful channel operation business on an overall basis. In the TP study, the assessee has adopted the profit split method (PSM) as the most appropriate method. In order to apply the PSM, the consolidated global profitability of channel companies was applied to the Indian

Star Asia Region Fz Llc, Mumbai vs. DDIT (It) 2(1), Mumbai

ITA 1813/MUM/2014[2009-10]Status: DisposedITAT Mumbai08 Dec 2023AY 2009-10

Bench: Shri Amit Shukla () & Ms. Padmavathy S. ()

Section 143(3)

entrepreneurial activities necessary to start a successful channel operation business on an overall basis. In the TP study, the assessee has adopted the profit split method (PSM) as the most appropriate method. In order to apply the PSM, the consolidated global profitability of channel companies was applied to the Indian

Luxottica India Eyewear Private Ltd., Haryana vs. Circle 13(1), Delhi

ITA 793/DEL/2022[2017-18]Status: DisposedITAT Delhi07 Dec 2023AY 2017-18

Bench: Sh. Shamim Yahya & Sh. Anubhav Sharmaita No. 793/Del/2022, A.Y. 2017-18 Luxottica India Eyewear Pvt. Vs. Dcit Ltd. Circle 13(1), 7Th Floor, Dlf Cyber City, Delhi Gurgaon, Haryana-122002 Pan : Aabcl3871C (Appellant) (Respondent)

For Appellant: Shri Nageswar Rao &For Respondent: Sh. Manvendra Goyal, CIT(DR)
Section 143(3)Section 144BSection 144CSection 92C

transaction of AMP expenses. He observed that in the present assessment year TPO has separately bench mark the AMP transaction using the residual profit split method, therefore concluded that the Tribunal directions for A.Y. 2014-15 are not applicable. On protective adjustment the DRP directions upholding the adjustment on Bright ... factual matrix for AY 2017-18 vis-a-vis AY 2014-15 on the premise that the Ld. TPO had adopted Residual Profit Split Method (‘RPSM’) to determine the arm’s length price without appreciating that application of a different approach by the Ld. TPO does not result

M/S Andritz Hydro Private Limited, Bhopal vs. The DCIT Circle 1(1), Bhopal

In the result, appeal of assessee is allowed for statistical purpose

ITA 75/IND/2022[2017-18]Status: DisposedITAT Indore28 Aug 2023AY 2017-18

Bench: Shri Vijay Pal Rao & Shri B.M. Biyanim/S. Andritz Hydro Private Dcit Circe 1(1) Ltd. Bhopal Vs. D-17, Mpakvn Industrial Area, Mandideep Raisen (Appellant / Assessee) (Respondent/ Revenue) Pan: Aabcv 2466 R Assessee By Shri Rahul, Kaul Ar Revenue By Shri P.K. Mishra, Cit-Dr Date Of Hearing 13.06.2023 Date Of Pronouncement 28.08.2023

Section 143(3)Section 144C(13)Section 144C(5)Section 92C(3)

length price in relation to the supply of the 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 transfer of unique intangibles or in multiple international transactions [or specified domestic transactions] which

Aaacorp Exim India Private Limited, Mumbai vs. D.C.I.T.-Circle-14(1)(1), Mumbai

In the result the appeal of the assessee is allowed

ITA 966/MUM/2023[2015-16]Status: DisposedITAT Mumbai25 Aug 2023AY 2015-16

Bench: Shri Amit Shukla & Shri Gagan Goyal & Aaa Corp Exim India Pvt. Ltd. C-206, Ghatkopar Industrial Estate, Off Lbs Marg, Ghatkopar (W), Mumbai-400 086 Pan: Aacca8815C ...... Appellant Vs. Dcit-14(1)(1) Income Tax Offices, Aayakar Bhavan, M. K. Road, Mumbai-400 020 ..... Respondent

For Appellant: Shri M. Subramanian, Ld. ARFor Respondent: Shri Rajesh Yadav, Ld. DR
Section 10ASection 143(3)Section 234BSection 234CSection 250Section 40ASection 40A(2)(b)Section 80Section 80ASection 92B

other relevant factors as the Board may prescribe, namely:— (a) comparable uncontrolled price method; (b) resale price method; (c) cost plus method; (d) profit split method; (e) transactional net margin method; (f) such other method as may be prescribed by the Board. (2) The most appropriate method referred

Nikon India P.Ltd, Gurgaon vs. ACIT, Circle-3(1), Gurgaon

In the result, the appeal of the assessee is partly allowed and the Stay

ITA 1800/DEL/2022[2017-18]Status: DisposedITAT Delhi27 Jul 2023AY 2017-18

Bench: Shri M. Balaganesh & Shri Yogesh Kumar U.S.Assessment Year: 2017-18 & Stay Application No.256/Del/2022 (Ita No.1800/Del/2022) Assessment Year: 2017-18 Nikon India Pvt. Ltd., Vs Acit, Plot No.71, Sector-32, Circle-3(1), Institutional Area, Gurgaon. Gurgaon, Haryana – 122001. Pan: Aaccn5100F (Appellant) (Respondent) Assessee By : Shri Vishal Kalra & Shri Ankit Sahani, Advocates; & Shri Yishu Goel, Ar Revenue By : Shri Rajesh Kumar, Cit-Dr Date Of Hearing : 19.07.2023 Date Of Pronouncement : 27.07.2023 Order Per M. Balaganesh, Am: The Appeal In Ita No.1800/Del/2022 & The Stay Application In Sa No.256/Del/2022 Filed By The Assessee Arise Out Of The Order Of Assessment Passed U/S 143(3) R.W.S. 144C(13) R.W.S. 144B Of The Income-Tax Act, 1961 Sa No.256/Del/2022 (Hereinafter Referred To As ‘The Act’) Dated 25.07.2022 By The Assessment Unit, Of The Income Tax Department (Hereinafter Referred To As ‘Ld. Ao’).

For Appellant: Shri Vishal Kalra &For Respondent: Shri Rajesh Kumar, CIT-DR
Section 143(3)Section 144C(5)Section 92C

proposed the following adjustments in his order on substantive as well as protective basis:- Method of Benchmarking Adjustment in INR Substantive Residual Profit Split Method 71,45,33,227 (RBW )- Intensity Test Protective Bright Line Test (BLT) 127,52,94,223 7. The ld. AO passed a draft assessment order

Sunil and Company, Jodhpur vs. DCIT, Circle-1, Jodhpur

In the result, the appeal is dismissed

ITA 35/JODH/2022[2014-15]Status: DisposedITAT Jodhpur14 Jul 2023AY 2014-15
Section 92C

oiling on job work bass. The major specified domestic transaction was that of purchase of goods. The appellant had used profit split method for benchmarking of the transaction. However, despite having repeated opportunities, detailed information in this regard was not submitted. The appellant does not have any plant and machinery

Gruner India Pvt. Ltd., New Delhi vs. ACIT, Circle- 10(2), New Delhi

In the result, the appeal of the assessee is allowed

ITA 4062/DEL/2019[2012-13]Status: DisposedITAT Delhi03 Jul 2023AY 2012-13

Bench: Dr. B. R. R. Kumarsh. Yogesh Kumar Usita No. 4062/Del/2019 : Asstt. Year : 2012-13 M/S Gruner India Pvt. Ltd., Vs Acit, 15 Dsidc, Okhla Industrial Area, Circle-10(2), Phase-Ii, Scheme-1, New Delhi New Delhi-110020 (Appellant) (Respondent) Pan No. Aadcg2938H Assessee By : Sh. Pancham Sethi, Ca Revenue By : Sh. Mrinal Kumar Das, Sr. Dr Date Of Hearing: 05.04.2023 Date Of Pronouncement: 03.07.2023 Order Per Dr. B. R. R. Kumar: The Present Appeal Has Been Filed By The Assessee Against The Order Dated Xx.02.2019 Passed By The Ao U/S 254/143(3) R.W.S. 144C Of The Income Tax Act, 1961. 2. Following Grounds Have Been Raised By The Assessee:

For Appellant: Sh. Pancham Sethi, CAFor Respondent: Sh. Mrinal Kumar Das, Sr. DR
Section 234BSection 254Section 271(1)(c)Section 92C

length price in relation to the supply of the 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 transfer of unique intangibles or in multiple international transactions [or specified domestic transactions] which