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2015 (3) TMI 1068

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..... KARA RAO, ACCOUNTANT MEMBER For the Appellant : Shri K. Shivaram For the Respondent : Shri. S. D. Srivastava ORDER Per Vijay Pal Rao, JM This appeal by the revenue and Cross Objection by the assessee are directed against the assessment order dated 20.12.2013 passed u/s 143(3) r.w.s 144C(13) of the Income Tax Act in pursuant to the directions of DRP dated 15.11.2013 u/s 144C(5) of the Income Tax Act for the A.Y. 2009-10. The revenue has raised the solitary grounds as under:- On the facts and in the circumstances of the case and in law, the Hon ble DRP has erred in directing the Assessing Officer to exclude KJMC Corporate Advisors India Ltd. from the comparable companies relying on the decision of the Hon ble ITAT in the case of Carlyle India Advisors Pvt. Ltd. without appreciating that the same has not been accepted by the Department and an appeal u/s 260A of the IT Act has been filed before the Hon ble Bombay High Court. 2. The assessee company is wholly owned subsidiary of Arisaig Partners (Asia) Pte Ltd., headquarterd in Singapore. Vide the serviced agreement between the assessee and its holding company (AE), the assessee provides research .....

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..... Sr. No. Name of the Company OP/TC for FY 2008-09 1. Quantum Advisors Pvt LTd 10.90% 2. Indian Venture Capital Ltd. - 1145% 3. Kshitij Investment advisory Co Ltd. 27.82% 4. Future capital Holdings Ltd- Investment advisory segment -25.04% 5. Future capital investment advisors Ltd. 20.67% Mean 4.50% 5. The TPO rejected the comparables selected by the assessee except the comparable at serial no. 2 namely Indian Venture Capital Ltd and carried out fresh search and added eight more comparables for determination of ALP in respect of the international transaction carried out by the assessee with the AE. The comparables selected by the TPO are as under:- Sl No. Particulars OP/TC 1. KLG Capital Services Limited .....

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..... hat of the list of comparables picked up by the TPO which includes the said KGL and KJMC. The judgment of the Bombay High Court (supra) is relevant for the proposition that the business of investment, merchant banking, corporate finance and similar activities cannot be compared to the investment advisory activities of the assessee. In any case, nothing is brought to our notice by the Revenue to counter the above. Under these circumstances, we are of the opinion that the KGL and KJMC are functionally different which cannot be considered for determination of the ALP of the assessee. On this reasoning itself, the comparable of the KGL and KJMC are to be excluded and the assessee is entitled to relief. Accordingly, AO is directed to exclude the said two comparables too. Accordingly, ground no.4 raised by the assessee is allowed. 7. It was found by the Tribunal that the said company is in the business of investment, merchant banking, corporate finance and similar activities which cannot be compared to the investment advisory activities. There is no dispute that the assessee s international transaction with the AE is only with respect to the investment advisory and no other service o .....

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..... n para 8 and 9 as under:- 8. We have heard both the parties and perused the orders of the Revenue Authorities as well as the relevant material placed before us. It is an undisputed fact that the assessee is engaged in the business of rendering investment advisory and related support services to its principal Carlyle Hong Kong. The dispute raised in ground no.4 relates to whether (i) KLG Capital Services Ltd (KLG); (ii) KJMC Corporate Advisors (India) Limited (KJMC) and (iii) Motilal Oswal Investment Advisors Pvt Ltd (MOIAPL) are functionally comparable cases or not considering the decision of the Tribunal as well as the judgment of the Bombay High Court relied upon by the assessee. Regarding MOIAPL, assessee relied heavily on the order of the Tribunal in its own case for the AY 2008-2009, a copy of which is placed at page 282 of the paper book. On perusal of the said order of the Tribunal, we find that it is decided in favour of the assessee vide ITA No.7367/Mum/2012 (AY 2008-2009), dated 7.2.2014. On perusal of para 12 of the said order of the Tribunal, which contains the operational part, we find the same is relevant and the Tribunal has given its finding under the facts whic .....

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