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TMI Blog2018 (2) TMI 1803X X X X Extracts X X X X X X X X Extracts X X X X ..... s Ltd., as a comparable selected by the Transfer Pricing Officer. In view of the aforesaid, we will restrict ourselves to adjudicating the issues relating to selection/rejection of certain comparables as disputed before us by both the parties. 3. Brief facts relating to the issue in dispute are, the assessee an Indian company is engaged in the business of providing non-binding investment advisor services to its Associated Enterprise (A.E) General Atlantic Service Corporation, USA. For the purpose of provisions of such services, the assessee has entered into an agreement with its A.E. on 31st October 2002, which was updated on 31st March 2010. For providing non-binding investment advisory service, the assessee is remunerated by its A.E. at cost plus 18% mark-up. In the relevant previous year, the assessee earned operating income of 51,88,60,615 from the international transactions relating to provisions of non-binding investment advisory services. The assessee bench marked the international transaction with its A.E. adopting Transaction Net Margin Method (TNMM) as the most appropriate method by selecting itself as tested party. After searching the data bases, the assessee selected f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e segment of providing consultancy services. Referring to the annual report of the company, the learned Authorised Representative submitted that the services rendered by the company are broadly similar to the assessee. He submitted, for this reason, ICRA Management Consulting Services Ltd. has been accepted as a good comparable in case of companies engaged in investment advisory services. In support of such contention, he relied upon the following decisions:- (i) CIT v. Temasek Holdings Advisors India (P.) Ltd. [IT Appeal No. 1051 of 2014], (Bom.); (ii) CIT v. Temasek Holdings Advisors India (P.) Ltd. [IT Appeal No. 359 of 2015] (Bom.); (iii) Temasek Holdings Advisors India (P.) Ltd. v. Dy.CIT [2016] 67 taxmann.com 221 (Mum. - Trib.) (iv) Dy. CIT v. Temasek Holdings Advisors (P.) Ltd. [2014] 47 taxmann.com 311/151 ITD 458 (Mum. - Trib.) (v) Temasek Holdings Advisors India (P.) Ltd. v. Dy. CIT [2013] 38 taxmann.com 80/60 SOT 134 (URO) (Mum. - Trib.) (vi) Blakstone Advisors India (P.) Ltd. v. Dy. CIT [2016] 69 taxmann.com 193 (Mum. - Trib.) (vii) AGM India Advisors (P.) Ltd. v. Dy. CIT [2017] 79 taxmann.com 86 (Mum. - Trib.) and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Learned Authorised Representative submitted, even in assessee's own case for assessment year 2009-10, the DRP has accepted IDC India Ltd. as a comparable to the assessee. He submitted, in view of the judicial precedents on the issue, IDC India Ltd. should be treated as a comparable to the assessee. So far as selection of Ladderup Corporate Advisory Pvt. Ltd. is concerned, the learned Authorised Representative submitted, the company being a merchant banker cannot be treated as a comparable to the assessee. In support of such contention, he relied upon the following decisions:- (i) Temasek Holdings Advisors India (P.) Ltd. (supra) (ii) McKinsey Knowledge Centre (P.) Ltd. v. Dy. CIT [2017] 77 taxmann.com 164 (Delhi - Trib.) 9. Learned Departmental Representative relying upon the written submissions filed by him submitted that comparables have to be selected keeping in view provisions of rule 10(B)(2) with reference to specific characteristic of the services provided, the functions performed, taking into account assets employed and the risk assumed by the respective parties. Learned Departmental Representative submitted, ICRA Management Consulting Services Ltd. is not compara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich have never been examined at any stage. 13. So far as comparability of Motilal Oswal Investment Advisors Ltd. is concerned, the learned Authorised Representative strongly supporting the decision of the DRP submitted that the issue is no more res integra in view of a number of decision of the Tribunal on the comparability of this company. 14. We have heard rival submissions and perused material available on record. Insofar as ICRA Management Consulting Services Ltd. is concerned, the Transfer Pricing Officer has rejected it as a comparable basically on the reasoning that unlike the assessee this company is providing management consulting service. One more reason by the Transfer Pricing Officer to exclude this company is difference in skill set of employees. However, we find nothing new in the argument of the Department as upon consideration of the very same argument, this company has been found to be a comparable to a non-binding investment advisory service provider. It is relevant to observe, in case of AGM India Advisors (P.) Ltd. (supra) which is for the very same assessment year, the Tribunal after considering argument advanced by the Department regarding difference in ski ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer to include this company as a comparable. 16. Insofar as Ladderup Corporate Advisory Pvt. Ltd. is concerned, it is seen that the comparability of this company to an investment advisory service provider came up for consideration before the Tribunal, Mumbai Bench, in Temasek Holding Advisors India (P.) Ltd. (supra). The Bench after considering the submissions of the parties having found that the company is registered as a Category-1 Merchant Banking Company with SEBI and is engaged in Merchant Banking service w.e.f. July 2010 held that the company cannot be treated as comparable to non-binding investments advisory provider. Respectfully following the aforesaid decision of the Co-ordinate Bench, we exclude this company from the list of comparables. 17. As far as Motilal Oswal Investment Advisors Ltd. is concerned, different Benches of the Tribunal including Mumbai Benches have decided against including this company as a comparable to an investment advisory service provider. In fact in the case of AGM India Advisory (P.) Ltd. (supra), which is for the very same assessment year, the Tribunal has excluded this company as a comparable finding that it is engaged in four different bus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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