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2017 (8) TMI 1490 - AT - Income TaxTPA - comparable selection - Held that:- Assessee is into providing Investment advisory services to its holding company, viz. THPL in the year 2004. Despite the multiple sectors of operations, no segmental data is available in the 'Annual report', and the income from the advisory operating constitute only 42.10% of its total operating income. We are further of the considered view that as observed by us hereinabove, the aforesaid comparable unlike the assessee is engaged in the business of managing and advising funds in the Growth Capital as well as Real Estate Space. That a perusal, of 'Schedule E' to the balance sheet of the aforesaid comparable therein reveals that the latter had made investments in one of the funds managed, by it, i.e 'India Reality excellence fund'. Thus in the totality of the aforesaid facts we are of the considered view that functions performed by the aforementioned comparable, viz. Motilal Oswal Equity Pvt. Limited, which is into managing and investment into funds, cannot be compared to the assessee whose functions are strictly limited to as that of an Investment advisor. Thus we are of the considered view that the aforementioned comparable, viz. Motilal Oswal Equity Pvt. Ltd. is functionally incomparable with the assessee company and had wrongly been included in the list of the final comparables. We thus direct the AO/TPO to exclude the aforesaid comparable from the final list of the comparables. That in light of our aforesaid observations we herein direct the AO/TPO to recompute the ALP of the assessee company. The AO/TPO are directed that if the ALP of the assessee is found within the safe harbour of (+)/(-) 5% parameters, then no addition would be called for in the hands of the assessee. The appeal of the assessee is thus allowed in terms of our aforesaid observations. Addition u/s 40(a)(i) - setting aside of disallowance suggested by the AO u/s 40(a)(i) in the draft assessment order and exclusion of the said disallowance by the AO in the assessment framed under Section 143(3) r.w.s. 92CA(3) - Held that:- The assessee company is not a beneficiary of this expenditure because the seconded employees have been paid salary by THPL who are working in India for the assessee company and the assessee is merely reimbursing the same. By rendering this service to the THPL, the assessee is earning business income and salary paid is certainly a business expenditure on which TDS has already been deducted as the liability to withhold the tax on salary falls within the purview of section 192 only, which has been done in this case. There cannot be a double deduction of TDS once at the time of payment of the salary and again on the reimbursement made by the assessee to the THPL. Thus, there was no requirement for deducting the tax at the time of reimbursement, when already tax has been deducted at the time of payment of salary - Disallowance u/s 40(a)(i) to be deleted.
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