Held that there was no basis for the conclusions that the technology in question was to be used by a start-up or that the assessee was a start-up. The technology in question was that of a foreign company and was being used by the assessee on a continuing basis. There was no basis for the conclusion that the useful economic life of the technology would only be five years. In any event, the passage of time could not be the basis to discard the transactional net margin method as the most appropriate method. Even going by rule 10B(1)(d) of the Income-tax Rules, 1962, there should be some contribution by each of the parties to a transaction for earning profits from the sale of goods or the provision of services. Then, the contribution of each of the parties would be identified and the profit would be split between those parties. In the case of the assessee, the technology was given by the foreign company for which royalty was paid. The use of the technology in the manufacture and sale of the products contribute to the profits of the assessee. The foreign company had nothing to do with that. The first condition for application of the profit split method was thus not met. The profit split method would apply only in a case involving the transfer of unique intangibles or in multiple interrelated international transactions which cannot be valued separately for determining the arm’s length price. It may have been true that the assessee aggregated payment of royalty with the transaction of manufacturing as it was closely linked and adopted the transactional net margin method but that did not mean that the transactions were so interrelated that they could not be evaluated separately for applying the profit split method. Further, the assessee did not make any unique contribution to the transaction. The profit split method could not be applied. The transactional net margin method is held   the most appropriate method.(AY.2018-19)