TMI Blog2019 (1) TMI 1274X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent. Thus, restored the issue to the Assessing Officer to determine the ALP on the above basis. The Revenue has not pointed out any reason why the above methodology adopted by the Tribunal is bad or does not give the correct ALP as compared to the turnover basis adopted by the TPO. We find that the view taken by the Tribunal on these facts is a reasonable view, being directly linked to the interest earned on the margin money deposited by the AE's and unrelated parties while engaging the services of the respondent as a broker in future and option trade. Rejecting Keynote Corporate Services Limited as a comparable on the ground of it being undergone an amalgamation during the year - Held that:- If merger/amalgamation have taken place and it is not a normal event then such a company would cease to be comparable. This ofcourse is subject to the Revenue being able to show that amalgamation/merger did not have any effect of the profitability of the company. This has not been shown by the Revenue either to the Tribunal or before us. Therefore, this issue stands covered by the decision of this Court in Aptara Technology Pvt. Ltd. (2018 (4) TMI 404 - BOMBAY HIGH COURT) and PTC Softwa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mparable on the ground of it being undergone an amalgamation during the year is not a proper comparable to the assessee company? 4. Whether in the facts and circumstances of the case and in law, was the Tribunal justified in directing the Assessing Officer to exclude Khandwala Securities Limited from the list of comparables to determine the ALP of its merchant banking services rendered by Assessee to its AEs? 3. Respondent is a company engaged in Merchant Banking, Stock Broking and providing related financial and advisory services. In the course of its business, the respondent has entered into certain international transactions with his Associated Enterprises(AE). Therefore, the income arising therefrom was a subject to determination of Arms Length Price (ALP) in terms of Chapter X of the Act. In the above view, question Nos. 2 to 4 above, originate in transfer pricing adjustments of transactions with AE's. 4. Re: Quetion No.1 (i) The Authority under the Act had disallowed the payment of ₹ 2.86 cores made to National/Bombay Stock Exchange on account of transaction charges under Section 40(a)(i) of the Act. This for failure to deduct tax at source under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tored the issue to the Assessing Officer to determine the ALP on the above basis. (iv) The Revenue has not pointed out any reason why the above methodology adopted by the Tribunal is bad or does not give the correct ALP as compared to the turnover basis adopted by the TPO. (v) We find that the view taken by the Tribunal on these facts is a reasonable view, being directly linked to the interest earned on the margin money deposited by the AE's and unrelated parties while engaging the services of the respondent as a broker in future and option trade. (vi) As the view taken is a plausible view, the proposed question does not give rise to any substantial question of law. Thus, not entertained. 6. Re:Question No.3 (i) The respondent-assessee rendered merchant banking services to its AE's. These services were bench marked with similar services by others to determine the ALP by using the Transactional Net Margin Method as the most appropriate method. The TPO amongst various entities also considered Keynote Corporate Services Limited as a comparable to determine the ALP of the transaction between the respondent and its AE's. Both the TPO and the DRP re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... malgamation have taken place and it is not a normal event then such a company would cease to be comparable. This ofcourse is subject to the Revenue being able to show that amalgamation/merger did not have any effect of the profitability of the company. This has not been shown by the Revenue either to the Tribunal or before us. Therefore, this issue stands covered by the decision of this Court in Aptara Technology Pvt. Ltd. (supra) and PTC Software (I) Pvt.Ltd. (supra) in favour of the respondent. This more particularly in view of the absence of the Revenue even attempting to show that the merger and amalgamation that took place in the case of comparable M/s Keynote Corporate Securities Limited was such that it would not have any impact on its profitability. It is true that in case of PTC Software (I) Pvt.Ltd. (supra) this question has been admitted, however, the admission was on the facts and circumstances of that case. In any case the issue now stands concluded by final orders of this Court in case of Aptara Technology Pvt. Ltd. (supra) and PTC Software (I) Pvt.Ltd.(supra) and it is being followed. (v) In view of the above, as the proposed question is covered by the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X
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