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TMI Blog2015 (9) TMI 1405X X X X Extracts X X X X X X X X Extracts X X X X ..... r Pricing Adjustment relating to international transaction of provision of non binding advisory and support services of Rs. 207,049,505/- 1. On the facts and in the circumstances of the case, the learned Transfer Pricing Officer ('TPO') and the learned Assessing Officer ('AO') under the directions of the Hon'ble Dispute Resolution Panel ('DRP') erred on facts and in law in making an addition of Rs. 207,049,505 in relation to provision of advisory and support services by the Appellant based on the provisions of Chapter X of the Income-tax Act, 1961 ('the Act'). 2. The learned AOITPO under the directions of the Hon'ble DRP erred on facts and in law in disregarding the various submissions made by the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned AO has erred in granting TDS credit of Rs. 6,804,785 as against the TOS credit of Rs. 6,846,105 as claimed in the Return of Income by the Appellant. Ground 3: Levy of interest under section 234A of the Act Consequent to the Grounds mentioned above, the Appellant prays before the Hon'ble ITAT to direct the AO to delete the interest levied under section 234A of the Act amounting to Rs. 2,199,068. Ground 4: Levy of excess interest under section 234B of the Act Consequent to the Grounds mentioned above, the Appellant prays before the Hon'ble ITAT to direct the AO to delete the interest levied under section 234B of the Act amounting to Rs. 6,719,375. Ground 5: Levy of excess interest under section 234D of the Act Consequent t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted that the same is engaged in multiple business functions such as capital marketing business, structured finance teams etc., which is entire dissimilar to the functions of the assessee. Bringing our attention to page 18 of the paper book pertaining the annual accounts of MOIAPL, Ld Counsel for the assessee read out para 1.13 relating to the „segment reporting‟ and mentioned that assessee is engaged in single segment and there are no separate reportable segments as defined in AS-17. Further, Ld Counsel for the assessee brought our attention that the said company MOIAPL was analysed by the Tribunal in adjudicating the appeals of the Carlyle India Advisors (P) Ltd (supra). In this regard, Ld Counsel for the assessee read out pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue of if the MOIAPL is a good comparable and whether it passed the functional test. In this regard, we examined the directors‟ report placed on page 13 of the paper book and the following is reported by the directors under the heading „review of operations and future outlook‟, which reads as under: "The market for the services of the Company is buoyant and the Company made a quantum jump in business during the year 2007-08. On the whole, 23 assignments were completed successfully in the year as against 14 completed in the previous year. Income from cross border M&A a:tivity and the related financing solutions has been the largest contributor to the revenue mix during the year. The team size has now increased to 30 and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the market conditions. The Company expects a larger flow of transactions in the product areas of business and financial restructuring, private equity have-offs shareholder value creation through buy-back/sell-outs and mergers." 5. From the above it is evident that the said company MOIAPL has undertaken 23 assignments successfully in the year under consideration. Major portion of the income is earned by MOIAPL out of cross border activity services and related financial services. The capital market business is one of the source3s of the advisory fees earned by the assessee. Assessee has also earned fees out of assessee‟s capability of the structured finance teams, financial markets, ie both equity and credit market, is another sourc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, disinvestments etc. In the absence of specific data it is not possible to make comparison. It can therefore be safely said that the said company being into merchant banking and cannot be considered as a comparable. We, accordingly, direct the AO not to consider Motilal Oswal Investment Advisors Pvt Ltd as a comparable for the determination of ALP and re-determine the Arm‟s Length Price excluding Motilal Oswal Investment Advisors Pvt Ltd [ as per the findings] and including M/s. IDC [as per the directions of the DRP] i the light of the provisions of section 92C(2) r.w.s 92C(2A) of the Act. Ground no.4.1 and ground no.9 are accordingly allowed." 6. The contents of above extracted para highlights the fact that the MOIAPL is into merc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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