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TMI Blog2018 (8) TMI 384X X X X Extracts X X X X X X X X Extracts X X X X ..... circumstances of the case and in law, the Tribunal is justified in holding that the payment of bonus to shareholder employees is allowable under Section 36(1)(ii) of the Act? (ii) Whether on the facts and in the circumstances of the case and in law, the Tribunal is correct by holding the M/s. ICSL is not a comparable to the assessee company under Section 10B(2)(i) and (ii)? (iii) Whether comparables can be rejected on the ground that the comparables have exceptionally high profit margin as compared to the assessee in transfer pricing analysis?" 3. Regarding Question no.1: (a) In the previous order relevant to the subject Assessment Year, the respondent-assessee had paid bonus to its directors and employees claiming benefit of Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shahzada Nand and Sons (108 ITR 358) wherein almost identical circumstances an issue of commission paid to the employee shareholders was held to be allowable under Section 36(1)(ii) of the Act. In the above view, the appeal of the respondent was allowed by the impugned order dated 20th February, 2015. (c) The grievance of the Revenue before us is that the bonus which was paid to the employee directors was much higher than the bonus which was to be paid to the other employees of the respondent-assessee. It is on the above basis that it is contended by Mr. Suresh Kumar that the entire payment made of the employee directors of bonus was in lieu of dividend which would have been otherwise paid to the shareholders. Thus, on the above ground i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39;s the Transactional Net Margin Method (TNMM) was adopted. The Revenue inter alia seeks to rely upon comparable viz. Integrated Capital Services Limited (ICSL) amongst other comparables in determining the ALP of the transactions with AE's. The impugned order of the Tribunal has on facts found that the ICSL is an entity which is engaged in providing advisory and consulting services in the specialized area of mergers and amalgamations, Turnaround Restructuring Advisory Services (TRAS) i.e. in the nature of an investment/merchant banker. On the other hand, it finds the respondent-assessee is rendering an unbinding investment advisory of its Associate Enterprises. The impugned order holds that the merchant banking and investment banking ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the case of M/s. Carlyle India Advisors (P.) Ltd. to support the finding of the Tribunal. In this case also the impugned order places reliance upon M/s. Carlyle India Advisors (P.) Ltd. of the Tribunal and confirmed by this Court in the appeal filed by the Commissioner of Income Tax (ITA no.1286 of 2012). Thus, the view taken by the impugned order of the Tribunal in excluding ICSL is in these facts is possible view and calls for no interference. (c) At this, it was contended by Mr. Suresh Kumar, the learned counsel in support of the appeal that the finding of the Tribunal that the ICSL is providing services is perverse as it is contrary to the finding of the DRP to the effect that ICSL is not engaged in providing investment/merchant bank ..... X X X X Extracts X X X X X X X X Extracts X X X X
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