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2015 (12) TMI 966 - AT - Income TaxTransfer pricing adjustment - Held that:- Motilal Oswal Investment Advisors Pvt. Ltd. be excluded from the list of comparables in the case of investment advisory services as this company is engaged in the business of Merchant Banking and, therefore, is not a good comparable of a company providing investment advisory services to the AE. Brescon Advisors Limited be excluded from the list of comparables as this company has earned its revenue from debt resolution/debt syndication and financial restructuring advisory services. As per the profits and loss account, income is earned from debt resolution and debt syndication. It is further observed that this company also makes significant investments in companies using its own funds. Sundram Finance Distribution Ltd be excluded A this company is primarily engaged in the business of agency and retail distribution, operational income and income from brokerage service charges and incentives forms 96% of the total income. We also find from the Annual Report that the income is recognized from insurance agency commission and brokerage. Integrated Capital Services Ltd. be excluded as be excluded as this company is rendering advisory and consultancy services in the area or merger acquisition and reconstruction of business. Khandwala Securities Limited be rejected as this company as comparable on the ground that its income is very akin as security and stock brokers. Axis Private Equity Ltd., the related party transactions are more than 90%. Moreover, the principle product/services of the company as per balance sheet abstract show that it is into the asset management services. Thus, it can be safely concluded that this company has functionally different from the assessee. Therefore, it would be better to exclude this company from the final list of comparables. Computation of deduction u/s. 10A - assessee was asked to explain why 50% of the telecommunication expenses should not be excluded from export turnover for inclusion of deduction u/s. 10A - Held that:- Respectfully following the ratio laid down in the case of CIT Vs Gem Plus Jewellery [2010 (6) TMI 65 - BOMBAY HIGH COURT ] we direct the AO to exclude the telecommunication expenses from total turnover also. - Decided in favour of assessee Grievance related to ESOP cost - Held that:- Respectfully following the decision of the Special Bench of Biocon Ltd (2013 (8) TMI 629 - ITAT BANGALORE), we hold that discount on issue of employees stock options is allowable as deduction in computing the income under the head profits and gains of business of profession. - Decided in favour of assessee Disallowance of charges paid to National Securities Clearing Corporation Ltd, Bombay Stock Exchange and National Stock Exchange - Held that:- Respectfully following the ratio laid down in case of Angel Capital & Debitt Market Ltd. [2014 (5) TMI 584 - BOMBAY HIGH COURT] , we direct the AO to delete the impugned additions as the amount paid as penalty was on account of irregularities committed by the assessee’s clients. Such payments were not on account of any infraction of law and hence allowable as business expenditure. In such a case the explanation to Sec. 37 would not apply - Decided in favour of assessee Non-allowance of deduction on the ground that bonus expense not actually paid - Held that:- The assessee drew our attention to exhibit 275 which is Appendix-IV to the Audit Report for the year ended 31.3.2008. It was pointed out by the Ld. Counsel that the bonus amount of ₹ 36,46,21,050/- was not paid on or before the due date for furnishing the return of income out of which the assessee paid an amount of ₹ 35,34,72,734/- during the year under consideration. It is the say of the Ld. Counsel that the AO has not properly appreciated the facts of the case. The AO is directed to consider the facts of the case properly and decide the issue afresh after giving reasonable and sufficient opportunity of being heard to the assessee - Decided in favour of assessee by way of remand Addition on account of the difference between the actual payments made by the assessee to American Express Banking Corporation (AEBC) and the confirmation provided by AEBC - Held that:- We find force in the contention of the Ld. Counsel. A perusal of DRP’s order also show that the corrected amount was provided to the DRP but the same was not accepted as it was not uploaded by AEBC on AIR. In our considered opinion, if the payee does not amend its AIR information, the payer cannot be penalized for the same. Once AEBC has confirmed of having received an amount of ₹ 11,55,45,253/- alongwith relevant bank statements evidencing the payment, we do not find any reason/logic in making the additions. The AO is directed to delete the same - Decided in favour of assessee
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