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2017 (10) TMI 1521 - AT - Income TaxTP Adjustment - selection of comparable - direction of the DRP to consider IDC Ltd. (ICDL) as a valid comparable - HELD THAT:- IDCL was accepted as a valid comparable in the earlier year. No fresh facts have been brought on record proving that there were distinguishing facts of the year under appeal vis-a-vis facts of earlier year. Principles of tax jurisprudence stipulate that rule of consistency should be adhered to as far as possible. In the case of Carlyle India Advisory Pvt. Ltd. [2013 (4) TMI 486 - BOMBAY HIGH COURT] has held that IDCL was a valid comparable for benchmarking investment advisory, as it was carrying out research/ consultancy activities. In the matters of General Atlantic Private Limited [2013 (1) TMI 797 - ITAT MUMBAI]and Sandstone Capital Advisors Pvt. Ltd. [2013 (9) TMI 401 - ITAT MUMBAI] the Tribunal has held that, for comparing investment advisory services, IDCL was to be considered a good comparables. We are of the opinion that the DRP had rightly held that IDCL was a valid comparable for benchmarking investment advisory services. So, confirming its order, we decide the effective ground of appeal against the AO. Exclusion of FCHL from the final list - If the principle is adopted for working out the RPT, it would be less than 25% and thus can be considered a valid comparable. So, Reversing the order of the TPO/AO, we decide the first effective ground of appeal in favour of the assessee. Inclusion of MOIAPL as a comparable company - MOIAPL is into merchant banking, and therefore, is functionally different to that of the assessee which is engaged in the business of non-binding advisory services. Therefore, in our opinion, the assessee is engaged in the function of non-binding advisory services whereas MOIAPL is into the merchant banking, capital markets, finance markets etc. Therefore, we find the MOIAPL is functionally dissimilar and therefore, the same should be excluded for benchmarking the international transactions. Accordingly, AO / TPO is directed to exclude the same. Whether single comparable can be adopted to test the validity of ALP of the IT? - We find that in the cases of J P Morgan Advisors India (P. )Ltd. [2019 (7) TMI 76 - ITAT MUMBAI], General Atlantics P. Ltd. [2016 (3) TMI 736 - BOMBAY HIGH COURT]and Pino Bisazza Glass (P. )Ltd. [2013 (9) TMI 300 - ITAT AHMEDABAD] the Tribunal has held that even a single comparable can be considered a valid comparable for determining the ALP of IT.s. Considering the fact that we have held that FCHL and IDCL are valid comparables, we hold that the AO was not justified in making the TP adjustment. Here, we would also like to mention that if only IDCL is taken as a comparable the mean of PLI would be (7. 29%), as against 5. 81% of the assessee. As it is within the range of (+/-)5%. If HCHL is also considered the assessee would be in the safe harbour. Seen from both the angles, it is evident the IT's entered in to by the assessee are within permissible limits. So, we reverse the order of the AO, passed in pursuance of the directions of the DRP, as far these two entities are concerned and hold them to be valid comparables. The RPT issue, as discussed earlier, is decided in favour of the assessee.
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