TMI Blog2018 (11) TMI 1732X X X X Extracts X X X X X X X X Extracts X X X X ..... he Dispute Resolution Panel (DRP). 2. Grounds no.1 to 11 in assessee s appeal and the only ground in Revenue s appeal relates to the addition made on account of transfer pricing adjustment. 3. At the time of hearing, Shri Porus Kaka, learned Sr. Counsel appearing for the assessee and Smt. Abhakala Chanda, learned Departmental Representative submitted that the dispute relating to transfer pricing adjustment is confined to selection / rejection of certain comparables. Therefore, at the outset, we propose to deal with the aforesaid issue raised by both the parties before us. 4. Brief facts relating to this issue are, the assessee is a wholly owned subsidiary of Blackstone Group of companies situated in New York, U.S.A. As stated by the Transfer Pricing Officer, the assessee is engaged in providing a range of investment sub advisory services relating to the Indian market to its overseas Associated Enterprises (A.E) belonging to Blackstone Group. For the assessment year under dispute, the assessee filed its return of income on 31st October 201, declaring total income of ₹ 13,25,18,104. During the assessment proceedings, the Assessing Officer noticing that the assessee ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Officer added the transfer pricing adjustment proposed by the Transfer Pricing Officer. Being aggrieved of such addition, the assessee raised objections before the DRP. 6. The DRP, after considering the objections of the assessee, though, upheld the rejection of comparables selected by the assessee, however, they excluded Motilal Oswal Investment Advisors Pvt. Ltd. from the list of comparables selected by the Transfer Pricing Officer. Being aggrieved with the aforesaid decision of the DRP, both, the assessee as well as Revenue are before us. 7. Herein after we will deal with each of the comparables disputed before us by the parties. ICRA MANAGEMENT CONSULTING SERVICES LTD. 8. This is one of the companies selected by the assessee. The Transfer Pricing Officer rejected this comparable on the reasoning that the company is not functionally similar to the assessee on the basis functions provided, asset employed and risk undertaken. The Transfer Pricing Officer observed, while the assessee is providing investment advisory services, as per the information obtained under section 133(6) of the Act, this company provides management consultancy and advisory services to cor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed material available on record. Insofar as ICRA Management Consulting Services Ltd. is concerned, the Transfer Pricing Officer has rejected it as a comparable basically on the reasoning that unlike the assessee this company is providing management consulting service. One more reason by the Transfer Pricing Officer to exclude this company is difference in skill set of employees. However, we find nothing new in the argument of the Department as upon consideration of the very same argument, this company has been found to be a comparable to a non binding investment advisory service provider. It is relevant to observe, in case of AGM India Advisors Pvt. Ltd. v/s DCIT, [2017] 79 taxmann.com 86 which is for the very same assessment year, the Tribunal after considering argument advanced by the Department regarding difference in skill set held that ICRA Management Consultancy Services is a valid comparable to a company providing non binding investment advisory services. It is also relevant to note, in assessee s own case for assessment year 2009 10, this company has been accepted as a comparable by the DRP. Even otherwise also, the observations of the Transfer Pricing Officer on difference ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the departmental authorities have excluded this company selected by the assessee on the ground of functional dissimilarity. However, it is observed, in assessee s own case for assessment year 2008 09, in the order referred to above, the Tribunal having found this company to be functionally similar to the assessee has accepted it as comparable. Similar view has been expressed by the Co ordinate Bench in case of a number of companies providing investment advisory services and many of such decisions pertain to the impugned assessment year. In this context, we may refer to the following observations of the Co ordinate Bench in case of General Atlantic Ltd. (supra): 15. Insofar as IDC (India) Ltd. is concerned, it is observed, in assessee s own case for assessment year 2006 07, the Tribunal accepted this company as a comparable which was upheld by the Hon'ble Jurisdictional High Court while dismissing the appeal filed by the assessee. While upholding the decision of the Tribunal, the Hon'ble Jurisdictional High Court observed that since the non binding advisory service provided by the assessee is similar to the service provided by Carlyle India Ltd., wherein, IDC (India) L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the learned Sr. Counsel for the assessee has held that this company cannot be a comparable to a company engaged in the activity of investment advisory services. Since, the aforesaid decisions are for the very same assessment year and no distinguishing fact in the present appeal was brought to our notice by the learned Departmental Representative, respectfully following the consistent view of the Tribunal, we hold that this company cannot be treated as comparable to the assessee. MOTILAL OSWAL EQUITY ADVISORS PVT. LTD. 24. This company was selected as comparable by the Transfer Pricing Officer and such selection was also upheld by the DRP. Objecting to the selection of the aforesaid company, the learned Sr. Counsel for the assessee submitted that since the company has four different business verticals, such as, financial advisory, investment advisory, management and facilitation services and identifying investment opportunities, it is functionally different from the assessee. He submitted, though, the company has different segments, however, no segmental data is available in the annual report. Thus, he submitted, the company cannot be treated as a comparable. In suppor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany as a comparable by holding that it is a merchant banker. Being aggrieved with the aforesaid decision of the DRP, Revenue is in appeal before us. 29. The learned Departmental Representative relied upon the observations of the Transfer Pricing Officer. 30. The learned Sr. Counsel for the assessee strongly relying upon the observations of the DRP submitted that the company being a merchant banker cannot be treated as a comparable to the assessee. In support of such contention, he relied upon the following decisions: i) AGM India Advisors Pvt. Ltd. v/s DCIT, [2017] 79 taxmann.com 86; ii) Temasek Holding Advisors India Pvt. Ltd. v/s DCIT, [2016] 67 taxmann.com 221; iii) Carlyle India Advisors India Pvt. Ltd. v/s DCIT, [2014] 43 taxmann.com 184. 31. Further, the learned Sr. Counsel for the assessee submitted that in assessee s own case for assessment year 2008 09, the Tribunal has held that the company cannot be a comparable to the assessee. 32. We have considered rival submissions and perused materials on record in the light of the decisions relied upon. As could be seen from the functional profile of this company as revealed from the material brought on rec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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