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2018 (11) TMI 1342 - HC - Income TaxTPA - comparables selection - Motilal Oswal Investment Advisors Pvt. Ltd. and M/s. IDFC Ltd. not comparables for the purpose of Rule 10B of the Income Tax Rules - Held that - The issue arising herein stands concluded against the Revenue and in favour of the respondent assessee by the decisions of this Court in CIT Vs. Carlyle India Advisors (P) Ltd. 2013 (4) TMI 486 - BOMBAY HIGH COURT and CIT Vs. General Atlantic (P) Ltd. 2016 (3) TMI 736 - BOMBAY HIGH COURT Assessee is engaged in providing investment research and advisory services to Bains Capital a Mauritius based Pvt. Ltd. Company. In the above facts, its activity is not comparable to the activity of Motilal Oswal Investment Advisors Pvt. Ltd. which is a Merchant Banker and not an investment advisor as the respondent. Similarly, it held that IDFC Investment Advisors Ltd. is also performing functionally different activity i.e. of portfolio management from that of non binding investment advice given by the respondent. Thus, holding that Motilal Oswal Investment Advisors Pvt. Ltd. and IDFC Investment Aedvisors Ltd. are not comparables
Issues:
Challenge to Tribunal's order under Section 260A of the Income Tax Act for Assessment Year 2010-11. Whether Motilal Oswal Investment Advisors Pvt. Ltd. and IDFC Ltd. are comparables for determining Arms Length Price. Analysis: The appeal before the Bombay High Court challenged the order of the Income Tax Appellate Tribunal related to Assessment Year 2010-11. The main issue raised by the Revenue was whether the Tribunal was correct in holding that Motilal Oswal Investment Advisors Pvt. Ltd. and IDFC Ltd. are not comparables for the purpose of Rule 10B of the Income Tax Rules. The Tribunal had allowed the respondent assessee's appeal by determining that the activities of the respondent, engaged in providing investment research and advisory services to Bains Capital, were not comparable to those of Motilal Oswal Investment Advisors Pvt. Ltd. and IDFC Ltd. The Tribunal found that the functions performed by these entities were functionally different from that of the respondent, thereby concluding that they were not suitable comparables for determining the Arms Length Price of the respondent's transactions with its related party. The Revenue, represented by Mr. Suresh Kumar, acknowledged that the issue had been settled against them by previous decisions of the Court in cases such as CIT Vs. Carlyle India Advisors (P) Ltd. and CIT Vs. General Atlantic (P) Ltd. The Counsel for the Revenue admitted that the issue was already decided in favor of the respondent assessee by the Court's previous judgments. Referring to the decisions and orders of the Court, it was established that the issue raised in the present case did not give rise to any substantial question of law, as it had already been conclusively settled. Considering the precedents and the settled nature of the issue, the High Court dismissed the appeal. The Court held that since the matter was already conclusively decided by previous judgments and orders of the Court, there was no substantial question of law to be entertained. Therefore, the appeal was dismissed with no order as to costs, thereby upholding the Tribunal's decision regarding the comparability of Motilal Oswal Investment Advisors Pvt. Ltd. and IDFC Ltd. in determining the Arms Length Price for the respondent's transactions.
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