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2016 (3) TMI 736 - BOMBAY HIGH COURT

2016 (3) TMI 736 - BOMBAY HIGH COURT - [2016] 384 ITR 271 - Transfer pricing adjustment - Selection of comparable - Held that:- Tribunal has on application of Function, Assets and Risk (FAR) analysis found that the functions of the respondent-assessee are similar to that of M/s. Carlyle India viz. advising its AE on the possible companies it could invest in but the final decision whether to accept the advise of the respondent-assessee or not is taken by the AE. Similarly, so far as assets are co .....

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parable as in its decision in Carlyle India (supra). It must be noted that the figures of IDC (India) Ltd. to arrive at the ALP were of the subject Assessment Year. We note that finding of the comparable to be adopted to determine the ALP as the basis of the activity conducted by the respondent assesee is essentially a finding of fact. The view taken by the Tribunal is a reasonable and possible view. No substantial questions of law. - Income Tax Appeal No. 1993 of 2013 In ITA No. 8914/MUM/2010 - .....

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o Assessment Year 2006-07. 2. The Appellant Revenue has reframed the following question of law for our consideration:- Whether on the facts and in the circumstance of the case and in law the Tribunal was justified in law holding that the assessee's activity of providing services is similar to the nature of services and activity of Carlyle India Advisors Pvt. Ltd. ignoring the fact that activities of the assessee's are comparable to merchant banking/investment banking activities? 3. The r .....

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advisory services to its AE i.e. GASC LLC is cost plus 12.5%. In view of international transaction being involved in rendering services, the Assessing Officer in exercise of his powers under Section 92CA(1) of the Act referred the above transactions to the Transfer Pricing Officer (TPO) for determination of the Arms Length Price (ALP) of the services rendered by the respondent-assessee to its AE. The TPO selected comparables on the basis of search with the key words mercantile banking/correspon .....

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d. The respondent-assessee raised an objection before the Dispute Resolution Panel(DRP). However, the DRP rejected the respondent-assessee's objections and confirmed the transfer pricing adjustment in the draft Assessment Order passed by the Assessing Officer. This led to the Assessing Officer passing an Assessment Order dated 30th October, 2010 in line with the draft Assessment Order. 5. The respondent-assessee challenged the Assessment Order dated 30th October, 2010 of the Assessing Office .....

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placed reliance upon its decision in M/s. Carlyle India Advisors (P.)Ltd. being ITA No.7901/Mum/2011 which was decided by it on 4th April, 2012 where it had dealt with an identical/similar nature of services as was being provided by the Assessee and had negatived seven of the Revenue s comparables of Merchant Bankers only to use one comparable in respect of an Investment Advisory viz. IDC Ltd. The Tribunal found that the eight comparables selected by the Revenue in case of M/s. Carlyle India (su .....

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spective AEs and found the same to be identical. On the aforesaid findings, the Tribunal by the impugned order determined the ALP on application of one comparable i.e. M/s. IDC India Ltd. at 14.58%. 6. Being aggrieved, the Revenue is in appeal before us. Mr. Kotangale, learned counsel for the revenue places reliance upon the order dated 30th October, 2010 of Assessing Officer. Mr. Kotangale contends that the activity of M/s. Carlyle India (supra) is not comparable to the activity of the responde .....

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