2019 (7) TMI 76 - ITAT MUMBAI

TP Adjustment - interest on deemed loan - AO/TPO treated difference between the market price of equity shares and the face value as deemed loan to the AE - HELD THAT:- TPO determined the market value of shares of face value of ₹ 10 issued to the holding company at ₹ 28.02 per share. The difference between the market value and the face value of shares was treated as deemed loan advanced to the AE. On the deemed loan, TPO computed arm's length interest @ 14.39% per annum and treated it as adjustment to the arm's length price. Identical adjustment was made by the TPO in the impugned assessment year as well. As could be seen from the material on record, while deciding the disputed addition in the appeal preferred by the assessee in the assessment year 2008–09 [2015 (3) TMI 1359 - ITAT MUMBAI] the Tribunal following the decision of the Hon'ble Jurisdictional High Court in Vodafone India Service Pvt. Ltd. [2014 (10) TMI 278 - BOMBAY HIGH COURT] held that the difference between the market price of equity shares and the face value cannot be treated as deemed loan to the AE. Accordingly, the Tribunal deleted the addition made on account of notional interest on such deemed loan

Addition on account of adjustment to the arm's length price of investment advisory services - TNMM - selection/rejection of comparables - HELD THAT:- Companies functionally dissimilar with that of assessee need to be deselected from final list.