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TMI Blog2018 (9) TMI 1182X X X X Extracts X X X X X X X X Extracts X X X X ..... s Advisory Pvt. Ltd. to the assessee company (for the purposes of determining the ALP) would be like comparing apples and oranges. This being the case, we do not find any infirmity in the order of the ITAT excluding Motilal Oswal Investments Advisory Pvt. Ltd. from the final list of comparables which would give rise to any substantial question of law. No substantial question of law . - INCOME TAX APPEAL (IT) NO. 406 OF 2016 - - - Dated:- 18-9-2018 - S. C. DHARMADHIKARI B. P. COLABAWALLA, JJ. Mr. Suresh Kumar for the appellant. Mr. P.J.Pardiwala, Sr. Advocate a/w Mr. Paras Savla, Mr. Harsh Shah I/b Atul K. Jasani for the Respondent. JUDGMENT [PER B. P. COLABAWALLA J.]: 1. By this appeal filed under Section 260A of the Income Tax Act, 1961 (for short the I. T. Act,1961 ), the revenue takes exception to the Judgment and Order dated 30th April, 2015 passed by the Income Tax Appellate Tribunal K Bench, Mumbai ( for short the ITAT ), in so far as the ITAT directed the Assessing Officer (for short the A.O. ) to recompute the adjustment of the Arm's Length Price (for short ALP ) in respect of the Investment Advisory Services rendered by the assessee to i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly basis containing news and information on investment areas, industries, companies and/or other specified areas that may interest NVP Mauritius. Over and above this, the assessee also provides non-banking advisory services to NVP Mauritius in respect of potential investment and dis-investment opportunities in India or elsewhere and includes advising on structuring of such opportunities etc. If specific instructions are given by NVP Mauritius to the assessee, the assessee conducts due diligence of such opportunities and thereafter reports to NVP Mauritius. 5. During the year under consideration (A.Y. 2010-11) the assessee earned a revenue of ₹ 20,56,64,037/- on account of investment advisory services given by the assessee to NVP Mauritius, its Associated Enterprise. On the basis of its Transfer Pricing Study (for short TPS ) the assessee asserted that the stated value of the aforesaid international transactions was at an ALP. The assessee had undertaken bench marking value of its international transactions by selecting the Transactional Net Margin method ( TNM ) as the most appropriate method and adopted the Operating Profit / Total Cost (for short OP/TC ) as i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ber, 2014, affirmed the adjustment that was determined by the TPO. In these circumstances, the A.O. thereafter passed an order dated 28th January, 2015 under Section 143(3) read with Section 144C of the I.T.Act, 1961 making the addition of ₹ 3,46,06,210/- to the returned income on account of determination of the ALP. This was the subject matter of the appeal before the ITAT. 8. Before the ITAT, the assessee raised a solitary contention to the effect that the Income Tax Authorities had erred in including Motilal Oswal Investment Advisors Pvt. Ltd. in the final set of comparables. In this regard, the plea set up by the assessee was that the activities of the said concern (Motilal Oswal Investment Advisors Pvt. Ltd.) were functionally in-comparable to the activity of investment advisory services rendered by the assessee to its Associated Enterprise, and therefore, could not be included in the list of comparables to arrive at the arithmetic mean of 40.31%, which in turn, was used to determine the ALP. In this regard, the assessee brought to the attention of the ITAT the business profile of Motilal Oswal Investment Advisors Pvt. Ltd. as emerging from the annual report and in pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 10. After hearing both the parties and going through the entire material on record, the ITAT (in paragraph 8) came to the conclusion that Motilal Oswal Investment Advisors Pvt. Ltd. was engaged in qualitatively different and diversified business from that of the assessee which was only confined to rendering non-binding investment advisory services to its Associated Enterprise. The ITAT, being the last fact finding authority, stated that it was revealed from the Annual Statement of Motilal Oswal Investment Advisors Pvt. Ltd. that the said concern was engaged in rendering the services in the advisory fields as mentioned above. In fact, in a similar case which came up before the Tribunal in the case of Carlyle India Private Limited (for the A.Y. 2008-09), the Tribunal concluded that though Motilal Oswal Investment Advisors Pvt. Ltd. was declaring a solitary stream of operating income under the head advisory fee , but undisputedly it was engaged in diversified fields and the financial results for each segment were not available. It was further recorded in that case that Motilal Oswal Investment Advisors Pvt. Ltd. was registered with SEBI as a Merchant Banker. Considering all thes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uestions of law requiring our consideration. On going through the order of the ITAT it is quite clear that the findings given therein are purely based of the facts placed before it. The facts, as placed before the ITAT, have not been controverted or denied by the revenue before us. The ITAT, after considering all these factual aspects, came to a categorical finding that Motilal Oswal Investment Advisors Pvt. Ltd. was engaged in a qualitatively different and diversified business than that of the assessee which was confined to rendering only nonbinding investment advisory services to its Associated Enterprise (NVP Mauritius). In coming to its conclusion, the ITAT also relied upon another decision of the Tribunal in the case of Carlyle India Pvt. Ltd. (ITA 2200/MUM/2014) dated 22nd August, 2014 . In this case also the Tribunal concluded that though Motilal Oswal Investments Advisory Pvt. Ltd. was declaring a solitary stream of operating income under the head advisory fee , but un-disputedly it was engaged in diversified fields and the financial results for each segment were not seperately available. Considering that it engaged in many diversified fields and not only in the field ..... X X X X Extracts X X X X X X X X Extracts X X X X
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