2015 (1) TMI 1226 - AT - Income Tax

Transfer pricing adjustment - selection of comparable of Motilal Oswal Investment Advisors Pvt. Ltd. - Held that - Motilal Oswal Investment Advisors Pvt. Ltd has been excluded from comparables on the plea that it was engaged in diversified activities, we direct the AO to exclude M/s Motilal Oswal Investment Advisors Pvt. Ltd from the comparables and to recompute the adjustment to be made u/s.92C(1) & 92C of the Act.

Summary

Issues: Computation of arm's length price of International Transaction in provision of Investment Advisory Services.

Analysis:
1. The appeal was filed by the assessee against the order passed u/s.143(3) r.w.s.144C for the assessment year 2009-10, specifically concerning the computation of the arm's length price of International Transaction in Investment Advisory Services.

2. The adjustment made by the Assessing Officer/Transfer Pricing Officer was based on comparing the assessee's case with Motilal Oswal Investment Advisors Pvt. Ltd., which was a point of contention for the assessee.

3. The learned Authorized Representative (AR) presented various decisions of the Tribunal where Motilal Oswal Investment Advisors Pvt. Ltd. was excluded as comparable due to its engagement in diversified activities, rendering it unsuitable for comparison.

4. The Tribunal, after considering the arguments and precedents, directed the Assessing Officer to exclude Motilal Oswal Investment Advisors Pvt. Ltd. from comparables and to recompute the adjustment under sections 92C(1) & 92C of the Income Tax Act, in line with the consistent exclusion of the company in similar cases.

5. The Tribunal allowed the appeal filed by the assessee in part for statistical purposes, emphasizing the exclusion of Motilal Oswal Investment Advisors Pvt. Ltd. from comparables for determining the arm's length price. The order was pronounced on 5th January 2015.