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2015 (4) TMI 1011 - AT - Income TaxAdjustment made in the international transaction undertaken by the assessee with its associated enterprises - selection of comparables - Held that:- In view of the above observations regarding nature of business carried on by Motilal Oswal and the judicial pronouncements, it is crystal clear that in addition to investment advisory services in which assessee was involved, M/s Motilal Oswal Investment Advisory Pvt. Ltd. was engaged in diversified activities and registered with SEBI as a merchant banker. Thus, M/s Motilal Oswal Investment Advisory Pvt. Ltd. is functionally different from the assessee. Accordingly, we direct the AO to exclude M/s Motilal Oswal Investment Advisory Pvt. Ltd. form the list of comparables. ICSL is functionally dissimilar, therefore, it should be excluded from the list of comparables. From the record we also found that while computing arms’ length margin, the AO has independently considered weighted margin of M/s Future Capital Investment Advisory ltd. at 20.35% instead of single year margin of 15.71%. To this effect, a letter was already given to the AO vide submission dated 10.10.2012. After exclusion of two comparables namely M/s Motilal Oswal and Integrated Capital, the only comparable remains is Future Capital Investment having margin of 15.71%. Since the margin of comparable which is left out remains at 15.71% as against margin of 19.70% earned by the assessee on provision of investment advisory services, which is more than the margin of 15.71%, no transfer pricing adjustment is warranted while computing arms’ length price. - Decided in favour of assessee
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