2018 (10) TMI 873 - HC - Income Tax

TPA - Comparable selection - Held that - In a detailed order passed by this court it has been held that there is a difference between services and business of comparable like Motilal Oswal Investment Advisors Pvt. Ltd. and the assessee. The Division Bench held that the activities of Motilal Oswal Investment Advisors Pvt. Ltd. were functionally incomparable to the activities of investment advisory services rendered by the assessee to its associate enterprise. Here as well similar is the factual position. Once the factual findings rendered in the impugned order are based on the materials before the tribunal then it is not permissible for us to re-appraise and re-appreciate the same and arrive at a different conclusion. No perversity has been demonstrated in the view taken by the tribunal nor is it vitiated by an error of law apparent on the face of the record. Consequently none of the questions proposed before us can be treated as substantial questions of law.

Summary

Issues:
1. Challenge to the order passed by the tribunal for assessment year 2009-10.
2. Dispute regarding international transaction with an associate enterprise exceeding the threshold limit.
3. Appeal filed by the Revenue against the deletion of certain comparables.
4. Cross objections filed by the assessee challenging the upholding of a comparable.
5. Determination of arms length price and comparability of Motilal Oswal Investment Advisors Pvt. Ltd.
6. Applicability of the decision in Income Tax Appeal No. 406 of 2016 to the current case.
7. Analysis of the factual findings and legal position in the impugned order.

Analysis:
1. The appeal challenges the tribunal's order for assessment year 2009-10. The case involved an international transaction by the assessee exceeding the threshold limit, leading to scrutiny by the assessing officer and subsequent reference to the Transfer Pricing Officer. The Dispute Resolution Panel intervened, resulting in the assessing officer passing the assessment order in 2013.

2. The Revenue filed an appeal to the tribunal, disputing the deletion of certain comparables, while the assessee challenged the inclusion of Motilal Oswal Investment Advisors Pvt. Ltd. as a comparable. The tribunal dismissed the Revenue's appeal but allowed the assessee's cross objections, prompting the Revenue to propose questions as substantial questions of law.

3. The case of Motilal Oswal Investment Advisors Pvt. Ltd. was crucial, as a previous court order highlighted the differences between the activities of the comparable company and the assessee. The court emphasized the functional incomparability between the two entities in providing investment advisory services to associate enterprises.

4. The court reiterated that it cannot re-assess factual findings in the tribunal's order unless there is demonstrated perversity or a legal error. In this case, the tribunal's decision was based on the available materials and not vitiated by any legal error, leading to the dismissal of the appeal with no order as to costs.