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TMI Blog2015 (3) TMI 1068X X X X Extracts X X X X X X X X Extracts X X X X ..... ax Act for the A.Y. 2009-10. The revenue has raised the solitary grounds as under:- " On the facts and in the circumstances of the case and in law, the Hon'ble DRP has erred in directing the Assessing Officer to exclude KJMC Corporate Advisors India Ltd. from the comparable companies relying on the decision of the Hon'ble ITAT in the case of Carlyle India Advisors Pvt. Ltd. without appreciating that the same has not been accepted by the Department and an appeal u/s 260A of the IT Act has been filed before the Hon'ble Bombay High Court." 2. The assessee company is wholly owned subsidiary of Arisaig Partners (Asia) Pte Ltd., headquarterd in Singapore. Vide the serviced agreement between the assessee and its holding company (AE), the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stment proposed by the TPO/Assessing Officer before the DRP. The DRP deleted three comparables out of the nine taken by the TPO. Accordingly, the revenue as well as the assessee are aggrieved and filed the appeal and Cross Objection before us. The revenue has challenged the exclusion of KJMC Corporate Advisors India Ltd from the comparables by the DRP based on the decision of this Tribunal in case of Carlyle India Advisors Private Limited Vs. DCIT (ITA No. 2200/M/2014) dated 22.08.2014. 4. We have heard the Ld. DR as well as Ld. AR and considered the relevant material on record. During the course of assessment proceedings the assessee has submitted fresh set of five comparables for bench marking its international transaction of providing r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... action carried out by the assessee for providing research services to its AE. Aggrieved by the action of TPO the assessee filed objection before the DRP. The DRP deleted the first three comparables at Sl. No. 1, 2 and 3of the TPO's comparable and accordingly modified the arm's length price. The revenue has accepted the two comparables deleted by the DRP namely KLG Capital Services Ltd and AR Venture Funds Management Limited but challenged the deletion of comparable namely KJMC Corporate Advisors (India) Limited. At the outset, we note that the DRP has deleted this company as a comparable by following the decision of this Tribunal in case of Carlyle India Advisors Private Limited Vs. DCIT (supra). The Tribunal in the said order has con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 raised by the assessee is allowed." 7. It was found by the Tribunal that the said company is in the business of investment, merchant banking, corporate finance and similar activities which cannot be compared to the investment advisory activities. There is no dispute that the assessee's international transaction with the AE is only with respect to the investment advisory and no other service or activity like investment, merchant banking, corporate finance etc. Thus the company KJMC Corporate Advisors (India) Limited cannot be treated as functionally comparable with the assessee. 8. In view of the above facts and circumstances of the case as well as the decision of this Tribunal in the case of Carlyle India Advisors Private Limited Vs. DC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is contention he has relied upon the decision of this Tribunal in the case of Carlyle India Advisors Private Limited Vs. DCIT (supra) as well as in the case of Acumen Fund Advisory Services India Private Limited Vs. DCIT (ITA No. 143/Mum/2014). 13. On the other hand, the Ld. DR has relied upon the orders of TPO and DRP 14. At the outset, we note that the Tribunal in the case of Carlyle India Advisors Private Limited Vs. DCIT (supra), has examined the functional comparability of Motilal Oswal Investments Advisors Pvt. Ltd in para 8 and 9 as under:- "8. We have heard both the parties and perused the orders of the Revenue Authorities as well as the relevant material placed before us. It is an undisputed fact that the assessee is engaged in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Investment Advisors Ltd., has operating profit at 21.79% whereas OPM of Motilal Oswal Investment Advisors Pvt Ltd is 72.33%. The comparables used by the TPO themselves are showing extreme OPM. A perusal of the Director‟s report of Motilal Oswal Investment Advisors Pvt Ltd shows that during the year under consideration, the said company has completed 23 assignments successfully as against 14 completed in the immediately preceding year. A close look at the financial statements of the said company show that the income from operations have been shown only as advisory fees whereas it is admittedly an undisputed facts that the said company is engaged in diversified activities. Segmental reporting is not available. Profit and loss account ..... X X X X Extracts X X X X X X X X Extracts X X X X
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