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2015 (4) TMI 1011 - ITAT MUMBAI

2015 (4) TMI 1011 - ITAT MUMBAI - TMI - Adjustment made in the international transaction undertaken by the assessee with its associated enterprises - selection of comparables - Held that:- In view of the above observations regarding nature of business carried on 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 .....

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/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 against margin of 19.70% earned by the assessee on provision of investme .....

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tter of order passed u/s.143(3) r.w.s.250 of the Act. 2. The only grievance of assessee relates to an adjustment of ₹ 2,63,18,222/- made by the AO in the international transaction undertaken by the assessee with its associated enterprises. 3. Rival contentions have been heard and record perused. Facts in brief are that assessee is a wholly owned subsidiary of Tiger Iron Ore and is engaged in providing non-binding investment advisory support services to its AE primarily with respect to the .....

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on 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. Informed Technologies Limited 11.62 Arithmetic Mean 13.97 Out of the above six comparables, the AO retained only one comparable, namely, Future Capital Investment Advisors Ltd. and rejected the re .....

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in further appeal before us. 5. It was argued by ld. AR that assessee is engaged in providing non-binding investment advisory support services, whereas M/s Motilal Oswal Investment Advisory Pvt. Ltd. is involved in investment, banking acquisition, disinvestment, IPO etc. As per ld. AR, M/s Motilal Oswal Investment Advisory Pvt. Ltd. is functionally different from the assessee company. He placed on record various decision of the Mumbai Tribunal, wherein M/s Motilal Oswal Investment Advisory Pvt. .....

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ated 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 rendering investment advisory services to its AE. As per finding recorded in .....

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ors Pvt. Ltd.(supra), the Tribunal observed that M/s Motilal Oswal Investment Advisory Pvt. Ltd. is registered with SEBI as merchant banker and is engaged in diversified activities, acquisition, disinvestment, IPO etc. 8. As per the annual report of M/s Motilal Oswal Investment Advisory Pvt. Ltd. for the year ending on 31-3-2010 relevant assessment year 2010-2011, the company derives its business income from four different business verticals viz. Equity Capital Markets, Mergers & Acquisition .....

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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-b .....

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