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TMI Blog2018 (7) TMI 2106X X X X Extracts X X X X X X X X Extracts X X X X ..... AO )/transfer Pricing Officer ( TPO ) of making an adjustment of ₹ 81,80,657/- to the international transaction of provision of Investment Advisory Services by the Appellant. 2. Without prejudice to ground 1, on the facts and in the circumstances of the case, the AO erred in inadvertently adjusting an amount of ₹ 81,80,657/- instead of ₹ 81,08,657/- thereby resulting in an erroneous addition to the extent of ₹ 72,000/- A perusal of Grounds of appeal reveal, the solitary dispute relates to addition of ₹ 81,80,657/- made by the Transfer Pricing Officer while determining the Arm s Length Price of international transaction of provision of Investment Advisory Services by the assessee to its Associate Enterprise. 3. The facts relevant to address the controversy raised in this appeal can be summarized as follows. The appellant before us is a company incorporated under the Companies Act, 1956, and is, inter alia, engaged in the business of providing non-binding investment advisory services. For the year under consideration, it filed its return of income declaring total income of ₹ 4,83,69,560/-, which was subject to scrutiny assessment whereby ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considering the aforesaid average margin of 59.98% and comparing that assessee s margin of 22%, an adjustment of ₹ 4,65,91,035/- was worked out to bring the stated value of the international transactions to the Arm s Length Price. The Assessing Officer passed a draft assessment order u/s. 143(3) r.w.s. 144C(1) r.w.s. 92CA of the Act, dated 03.03.2015, determining the total income after including the Transfer Pricing adjustment of ₹ 4,65,91,035/- worked out by the TPO against which the assessee raised various objections before the DRP. The DRP after considering the submissions of the assessee passed directions, dated 22.12.2015, in terms of which the Assessing Officer, worked out the final assessment by making a Transfer Pricing addition of ₹ 81,80,657/-, which was based on re-working done by the TPO in compliance to the directions of the DRP dated 22.12.2015(supra). Not being satisfied with the assessment, assessee is in appeal before us assailing the addition of ₹ 81,80,657/- as per the Grounds of appeal before us. 4. Though the assessee has raised an omnibus Ground of appeal challenging the addition of ₹ 81,80,657/-, but the specific points raise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed was found functionally incomparable. The co-ordinate Bench followed earlier decision of the Mumbai Bench in the case of Temasek Holdings Advisors (I)(P.) Ltd. vs. DCIT (supra), wherein it was found that Ladderup Corporate Advisory Private Limited was, inter alia, a Category-1, Merchant Banking Company registered with SEBI. It was noted that said company was engaged in Merchant Banking activities w.e.f. July 2010 onwards and, therefore, the Bench held that the same could not be treated as comparable to a concern engaged in provision of non-binding investment advisory services. In fact, the decision of our Co-ordinate Bench in the case of DCIT vs. General Atlantic (P.) Ltd.(supra), has also been rendered for A.Y. 2011-12 itself, which is the year under consideration before us and, therefore, the factual findings of the Co-ordinate Bench are fully applicable to the case before us. Thus, following the aforesaid precedents, which have been rendered under identical circumstances, we uphold the plea of the assessee for exclusion of Ladderup Corporate Advisory Private Limited from the final set of comparable in order to arrive at Arm s Length Price. 8. The next plea of the assessee s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal had found IDC (India) Ltd. (now known as Cyber Media Research Ltd.) to be a good comparable to the activity of providing investment advisory services. The decision of the Tribunal was founded on its earlier decision of Carlyle India Advisors (P.) Ltd.(supra). The aforesaid aspect was confirmed by the Hon ble Bombay High Court also. The aforesaid decision of Hon ble High Court has been referred by the learned representative to show that earlier decision in the case of Carlyle India Advisors (P.) Ltd (supra), has been further affirmed by the Hon ble Bombay High Court. The learned representative also referred to the decision of the Tribunal in the case of AGM India Advisors (P.) Ltd. v. DCIT (supra), which has been rendered for A.Y. 2011-12 i.e. the assessment year which is under consideration before us also. Notably, in AGM India Advisors (P.) Ltd (supra), the tested transaction was also providing of non-binding investment advisory services and IDC (India) Ltd. was found to be a good comparable by the Tribunal. The aforesaid decisions, in our view, clearly support the proposition sought to be convassed by the assessee for inclusion of Cyber Media Research Ltd. (formerly known ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also, we are unable to persuade ourselves to the plea of the learned CIT-DR. Firstly, the said decision is in the context of A.Y. 2007-08 and, therefore, the activities of IDC (India) Ltd, noted by the Tribunal, cannot ipso facto be construed as comparable to the activities of the assessee in the instant year which is A.Y. 2011-12. In fact, similar situation in the context of A.Y. 2009-10 itself has been considered by our Co-ordinate Bench in the case of TPG Capital India (P.) Ltd. v. DCIT (supra), wherein also the tested transaction was providing of investment advisory services. In the said decision reliance placed by the Revenue in the case of Tevapharm (P.) Ltd. (supra), in order of justify the exclusion of IDC (India) Ltd. did not find favour with the Bench. Therefore, on the issue of inclusion of IDC (India) Ltd. (later known as Cyber Media Research Ltd.) we also, uphold the plea of the assessee and direct that the said concern be included in the final set of comparable for the purpose of computing the Arm s Length Price. On this aspect, it may also be noted that for A.Y. 2012-13, the TPO vide its order, dated 27.01.2016, under section 92CA(3) accepted the inclusion of the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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