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2014 (11) TMI 257 - AT - Income TaxTransfer pricing adjustment - Investment advisory services rendered to the overseas AE – Held that:- The assessee’s margin was 23.29%, it was claimed by the assessee that its international transactions are at arm’s length price – the company has completed its third Financial Year since inception and 45 transactions in the field of takeover, acquisition, disinvestment - The primary activity of M/s Motilal Oswal Investment Advisor Pvt. Ltd. during the year was in the field of capital market, private equity and mezzanine finance as well as acquisition mergers and the cross boarder acquisition for its clients in India - the majority of transactions completed by Motilal Oswal Investment Advisor Pvt. Ltd. are in the filed of investment banking transactions comprising private placing of equity, syndication of project debt by taking of equity shares, acquisition, initial public offer (IPO), open offer and sponsor etc. – Decision in the case of M/s Carlyle India Advisors Pvt Ltd. Vs. DCIT [2014 (2) TMI 648 - ITAT MUMBAI] relied upon. The similar business activity was carried out during the year, therefore, having considered the business profile of the assessee as well as M/s Motilal Oswal Investment Advisor Pvt. Ltd., the company is not functionally comparable with the business of the assessee and it cannot be regarded as good comparable for the purpose of determination of arm’s length price in respect of international transaction of the assessee – the AO/TPO is directed to exclude the company from the set of comparables - The details of comparables have also been considered by the TPO in the set of four comparables from which, Motilal Oswal Investment Advisor Pvt. Ltd. is not a good comparable, the mean margin of the remaining three comparable comes to 24.99% in comparison to the assessee’s margin of 23.29% - Since the assessee’s margin is within the tolerance range of +/- 5% of the mean margin, therefore, no adjustment on account of transfer pricing is required in respect of international transaction of the assessee – Decided in favour of assessee.
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