Company A had undertaken an international transaction in FY 25-26 and the operating profit for the same was - 72,975. The company selected the…

In the present case, the dataset consists of eight entries and assuming the most appropriate method is other than the profit split method or the method prescribed by the CBDT, the ALP will be computed by applying the range concept beginning from the thirty-fifth percentile of the dataset and ending on the sixty-fifth percentile of the dataset would be constructed. For this purpose, the data set is to be arranged in ascending order as follows: Sl. No. Name of Comparable Operating profit (₹) 1. C 68,850 2. A 69,750 3. E 75,000 4. B 79,200 5. D 83,400 6. H 1,13,760 7. G 1,32,938 8. F 1,45,500 Percentile/Result Value to be selected Value (₹) 35% of 8 = 2.8 3rd Value 75,000 65% of 8 = 5.2 6th Value 1,13,760 Median i.e.,50% of 8 = 4 Arithmetic Mean of 4th and 5th value 81,300 = (79,200 + 83,400) / 2 Since operating profit of 72,975 from the international transaction is falling outside the range of 35 percentile and 65 percentile, the ALP shall be considered to be the median of dataset. Accordingly, ALP of the international transaction would be - 81,300 and the adjustment to be made to the transaction would be - 8,325 (₹ 81,300 -72,975).