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TMI Blog2018 (11) TMI 1731X X X X Extracts X X X X X X X X Extracts X X X X ..... red TNMM as the most appropriate method by conducting analysis wherein the operating margin over operating cost is used as the profit level indicator. 3. In respect of the investment advisory services rendered, the assessee has used TNMM analysis for benchmarking the price. The Profit level indicator (PLI) used is Operating Profit to Operating Cost. The assessee's margin was 15 percent and the arithmetic mean of the comparables was computed at 15.20 percent. On the basis of this analysis, the assessee has concluded that transaction with its AEs is at arm's length. 4. The AO referred the matter to the TPO u/s.92C. The TPO rejected TP study and proposed inclusion of following comparables. Name of the Comparables OP/OC Motilal Oswal Investment Advisors Pvt. Ltd., 82.51% Ladderup Corporate Advisory Pvt. Ltd., 52.42% 5. However, TPO did not agree with the inclusion of Icra Management Consulting Services Ltd., and IDC (India) Ltd., in the list of comparables for deciding the arm's length price. Accordingly transfer pricing adjustment of Rs. 18,04,89,850/- was made by the TPO. Against the above order of AO / TPO, assessee approached to the CIT(A). 6. By the impugned orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, (ITA 1564/Mum/2015) dated 30.04.2015 (5) Bain Capital Advisors (India] Pvt.Ud,(ITA 4l3/Mum/2015] dated 15th May 2015 (6) Wells Fargo Real Estate Advisors PvtLtd.flTA 1093/Mum/2015] dated 27.05.2015 Two cases of Future Capital Investment Advisers Ltd. and Future Capital Holdings Limited (Investment Segment] mentioned in para 7 of ITAT order date dl8/l. 1/2015 for A.Y. 2010-11 areas under: 1] Future Capital Investment Advisors Ltd, 2] Future Capital Holdings Mmitedflnvestment Advisory Segment) 4.6. It appears from the records that the TPO rejected the list of five comparables submitted by the assessee in the TPSR of November 2011 of PWC & CO. and also rejected the list of two comparables of IMCS and IDC having average arithmetic mean of (--) 15.07 %, that is, negative arithmetic mean and included the following two case of Motilal Oswal and Ladder up Corporate Advisory having average arithmetic mean of 67.47% even though the names of both these companies s " comparables" were rejected by the ITAT and the Bombay High Courts in assessee's own case. 4.7 Prima facie it would appear that the six cases mentioned in paragraph 12 on page 12/13 of the ITAT order for A.Y.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0-11, the TPO has included Motilal Oswal Investment Advisors Pvt. Ltd., as comparable. However, the ITAT vide order dated 22/08/2014 has directed for exclusion of same, which reads 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 the business of rendering investment advisory and related support services to its principal Carlyle Hong Kong. The dispute raised in ground no.4 relates to whether (i) KLG Capital Services Ltd (KLG); (ii) KJMC Corporate Advisors (India) Limited (KJMC) and (iii) Motilal Oswal Investment Advisors Pvt Ltd (MOIAPL) are functionally comparable cases or not considering the decision of the Tribunal as well as the judgment of the Bombay High Court relied upon by the assessee. Regarding MOIAPL, assessee relied heavily on the order of the Tribunal in its own case for the AY 2008-2009, a copy of which is placed at page 282 of the paper book. On perusal of the said order of the Tribunal, we find that it is decided in favour of the assessee vide ITA No.7367/Mum/2012 (AY 2008-2009), dated 7.2.2014. On perusal of par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Hon'ble Bombay High Court, we do not find any infirmity in the order of the CIT(A) for excluding Motilal Oswal India Ltd., from the list of comparables. Similarly we found that in the following judicial pronouncements, the Tribunal have directed for exclusion of Ladderup Corporate Advisory Pvt. Ltd., DCIT v. General Atlantic Pvt. Ltd. [2018) 91 taxmann.com 406 (Mum-Trib) Temasek Holding Advisors Pvt. Ltd. v. DCIT [2017] 87 taxmann.com 168 (Mum-Trib) Wells Fargo Real Estate Advisors Pvt. Ltd. v. DCIT [2018] taxmann.com 18 (Mum-Trib) 11. We had gone through the orders of the Tribunal wherein under similar facts and circumstances, the Tribunal have directed for exclusion of Ladderup Corporate Advisory Pvt. Ltd., in case of companies engaged in rendering non-banking investment advisory services. 12. Similarly in the following cases, the Tribunal have directed for inclusion of Icra Management Consulting Services Ltd., in case of assessee's engaged in rendering non-banking investment advisory services. AGM India Advisors Pvt. Ltd. v. DCIT [2017] 79 taxmann.com 86 (Mum-Trib) Goldman Sachs (India) Securities Pvt. Ltd. v. ACIT [2017] 78 taxmann.com 142 (Mum-Trib) 13. We had ..... X X X X Extracts X X X X X X X X Extracts X X X X
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