TMI Blog2019 (3) TMI 1883X X X X Extracts X X X X X X X X Extracts X X X X ..... (supra), has accepted this company as a comparable, we hold that Informed Technologies India Ltd., should be treated as comparable. Motilal Oswal Private Equity Advisors Pvt. Ltd.- As decided in BLACKSTONE ADVISORS INDIA PVT. LTD. AND VICE-VERSA [ 2018 (11) TMI 1732 - ITAT MUMBAI] upheld the decision of the learned Commissioner (Appeals) in rejecting this company as a comparable to an investment advisory service provider. Thus we direct the Assessing Officer to exclude this company from the list of comparables. Ladderup Corporate Advisory Pvt. Ltd. - This company has been rejected as a comparable to an investment advisory service provider. Though, these decisions of the Tribunal pertain to different assessment years, however, the basic facts on which the company has been rejected as a comparable remain same. In view of the aforesaid, we direct the Assessing Officer to exclude Ladderup Corporate Advisory Pvt. Ltd. from the list of comparable. Assessee s appeal is partly allowed. - IT(TP)A no. 933/Mum/2016 - - - Dated:- 15-3-2019 - SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER For the Assessee : Shri Faroq Irani For the Reve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee, the Assessing Officer rejected the transfer pricing study report as well as the comparables selected by the assessee, though, he accepted TNMM as the most appropriate method. Having done so, the Assessing Officer proceeded to select three new comparables with arithmetic mean of 55.68%. The list of comparables selected by the Transfer Pricing Officer are as under: Sl.no. Company Name OP/OC 1. Motilal Oswal Investment Advisors Pvt. Ltd. 82.23% 2. Ladderup Corporate Advisory Pvt. Ltd. 52.42% 3. Motilal Oswal Private Equity Advisors Pvt. Ltd. 32.38% Arithmetic Mean 55.68% 5. Since the profit margin shown by the assessee @ 20% is much lower than the arithmetic mean of the comparables selected by the Transfer Pricing Officer, he made an upward adjustment of ₹ 47,34,638, to the arm's length price. On the basis of such adjustment made by the Transfer Pricing Officer, the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany is not functionally similar to the assessee. He submitted, the function of the assessee is that of a fund manager and not investment advisor. Therefore, this company cannot be selected as comparable. Further, he submitted, the decisions relied upon by the learned Sr. Counsel for the assessee having not been rendered in assessee s own case may not be applicable. 11. We have considered rival submissions and perused material on record. At the very outset, we propose to deal with the contentions of the learned Departmental Representative that the assessee is providing the services as fund manager. On a perusal of the impugned order of the Transfer Pricing Officer it is noticed that the assessee is providing services to its AE in two segments i.e., non binding Investment Advisory Services and Investment Management Services. In fact, the Transfer Pricing Officer himself was accepted the price charged to the AE for investment management services to be at arm's length. He has made adjustment only with regard to the price charged for investment advisory services. Therefore, the contention of the learned Departmental Representative that the assessee is providing investment manag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as a comparable by the DRP. Even otherwise also, the observations of the Transfer Pricing Officer on difference in skill set between the assessee and the comparable company appears to be not on the basis of proper analysis of fact and more on assumption and presumption. As regards other functional differences of this comparable pointed by the learned Departmental Representative, it needs to be mentioned, neither Transfer Pricing Officer nor DRP have deliberated on those aspects. Since these issues raised by the learned Departmental Representative are completely new issues and never raised at any stage earlier, we do not consider it appropriate to deal with them as it requires verification of fresh facts. Therefore, respectfully following the decisions of the Tribunal cited before us by the learned Authorised Representative, we direct the Assessing Officer to accept this company as a comparable. 12. The same view has been expressed by the Tribunal in Blackstone Advisors India Pvt. Ltd., ITA no.928/Mum./2016, dated 30th November 2018, and Wells Fargo Real Estate Advisors Pvt. Ltd. v/s DCIT, dated 15th April 2016. Respectfully following the consistent view of the Hon'ble Juri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is necessary to observe, in case of other assessees engaged in providing non binding investment advisory services akin to the assessee for the very same assessment year, the Tribunal has held that IDC (India) Ltd. is a good comparable. In this context, we refer to the decisions of the Tribunal in case of AGM India Advisory Pvt. Ltd. (supra) and Temasek Holdings Advisors India Pvt. Ltd. v/s DCIT, 87 taxmann.com 168 (Mum.). Moreover, in assessee s own case in the earlier assessment years, this company having been found to be functionally similar was accepted as a comparable. In view of the aforesaid, we direct the Assessing Officer to include this company as a comparable. 17. The same view has been reiterated by the Tribunal in Blackstone Advisors India Pvt. Ltd., ITA no.928/Mum./2016 Anr., dated 30th November 2018. It is relevant to observe, the aforesaid decisions of the Tribunal also pertain to assessment year 2011 12. Moreover, in a number of decisions cited before us by learned Authorised Representative, the Hon'ble Jurisdictional High Court has also accepted this company as a comparable to investment advisory service provider. Though, the aforesaid decisions of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... easoning of the Transfer Pricing Officer and learned DRP. 23. We have considered rival submissions and perused material on record. The basic issue which arises for consideration is, whether Motilal Oswal Private Equity Advisors Pvt. Ltd., is functionally similar to the assessee. As could be seen, the Tribunal while considering the aforesaid issue in case of Blackstone Advisors India Pt. Ltd., ITA no. 928/Mum./2016, dated 30th November 2018, has upheld the decision of the learned Commissioner (Appeals) in rejecting this company as a comparable to an investment advisory service provider. The observations of the Tribunal in this regard is reproduced below for better appreciation: 27. We have considered rival submissions and perused materials on record in the light of the decisions relied upon. As could be seen from the facts on record, though, the aforesaid company has four business verticals, however, the segmental details are not available in the annual report. Further, in case of Temasek Holding Advisors India Pvt. Ltd. (supra), the Tribunal, while considering the comparability of the aforesaid company to an investment advisory services provider held that this company canno ..... X X X X Extracts X X X X X X X X Extracts X X X X
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