TMI Blog2015 (4) TMI 1011X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO to exclude M/s Motilal Oswal Investment Advisory Pvt. Ltd. form the list of comparables. ICSL is functionally dissimilar, therefore, it should be excluded from the list of comparables. From the record we also found that while computing arms’ length margin, the AO has independently considered weighted margin of M/s Future Capital Investment Advisory ltd. at 20.35% instead of single year margin of 15.71%. To this effect, a letter was already given to the AO vide submission dated 10.10.2012. After exclusion of two comparables namely M/s Motilal Oswal and Integrated Capital, the only comparable remains is Future Capital Investment having margin of 15.71%. Since the margin of comparable which is left out remains at 15.71% as agains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t advisory services. The assessee adopted TNMM method with following comparable for the justification of Arm s Length Price : Sr.No Name of company Weighted average operation margin on operating costs(%) 2010 1. Future Capital Holdings Ltd. 5.52 2. Future Capital Investment Advisors ltd. 20.35 3. ICRA Management Consulting Services Ltd. 0.71 4. ICRA Online Limited 32.89 5. IDC India Limited 12.72 6. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 4-7-2014; ii) Bain Capital Advisors (India) Pvt. Ltd., ITA No.1360/Mum/2014; dated 5-1-2015; iii) Carlyle India Advisors Pvt. Ltd., ITA No.7367/Mum/2012, dated 7-2-2014; iv) Carlyle India Advisors Pvt. Ltd., ITA No.2200/Mum/2014, dated 22-8-2014; and v) Actis Advisers Pvt. Ltd., ITA No.1998/Del/2014, dated 17-10-2014 6. On the other hand, it was the contention of ld. DR that M/s Motilal Oswal Investment Advisory Pvt. Ltd. was also engaged in providing investment advisory services, therefore, lower authorities were justified in including the same for arriving at arm s length price. 7. We have considered rival contentions, carefully gone through the orders of the authorities below and found that assessee is engaged in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by Motilal Oswal and the judicial pronouncements, it is crystal clear that in addition to investment advisory services in which assessee was involved, M/s Motilal Oswal Investment Advisory Pvt. Ltd. was engaged in diversified activities and registered with SEBI as a merchant banker. Thus, M/s Motilal Oswal Investment Advisory Pvt. Ltd. is functionally different from the assessee. Accordingly, we direct the AO to exclude M/s Motilal Oswal Investment Advisory Pvt. Ltd. form the list of comparables. 10. From the record we found that the assessee is engaged in providing non-binding investment advisory support services to its AE primarily with respect to the Indian market. Services rendered by assessee are in the nature of support services a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... while computing arms length margin, the AO has independently considered weighted margin of M/s Future Capital Investment Advisory ltd. at 20.35% instead of single year margin of 15.71%. To this effect, a letter was already given to the AO vide submission dated 10.10.2012. 13. After exclusion of two comparables namely M/s Motilal Oswal and Integrated Capital, the only comparable remains is Future Capital Investment having margin of 15.71%. Since the margin of comparable which is left out remains at 15.71% as against margin of 19.70% earned by the assessee on provision of investment advisory services, which is more than the margin of 15.71%, no transfer pricing adjustment is warranted while computing arms length price. 14. In the res ..... X X X X Extracts X X X X X X X X Extracts X X X X
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