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TMI Blog2020 (9) TMI 1281X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal by the assessee directed order of the assessee officer dated 24.10.2019 u/s. 144C read with section 143(3) passed pursuant to the direction of the Dispute Resolution Panel dated 5.9.2019. 2. Although assessee has raised various grounds, these are directed against transfer pricing adjustment of Rs. 8,37,42,465/-. In this regard the issues raised as summarised by the learned counsel of the assessee are as under :- (i) Treatment of the assessee as KPO instead of provider of nonbinding investment adversely services and related support services. (ii) Inclusion of the following comparables in the T.P. analysis :- Almondz Global Securities Ltd. Crisil Risk Infrastructure Solutions Ltd. ICRA Management Consulting Services Ltd. 3. Exclusion of the following comparables in the T.P. analyasis :- Cheers Interactive (India) Private Ltd ('Cheers Interactive') Cross Domain Solutions Private Ltd ('Cross Domain') 4. Brief facts of the case are as under :- Carlyle India Advisors Private Limited is a subsidiary of Carlyle Asia Investment Advisors Limited ('Carlyle Hong Kong') and is engaged in providing non-binding investment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s own case for the earlier years. 7. As regards the issue of the characterisation of the assessee as a KPO/high-end ITeS service provider the learned counsel of the assessee submitted that for this issue in assessee's own case for assessment year 13-14 and 14-15 the ITAT has held that the lower authority was not correct in re characterisation of the assessee as KPO in place of providing nonbinding investment advisory and related support services. 8. As regards the exclusion of comparable companies which are not comparable to the assessee, the learned counsel of the assessee submitted that ITAT in assessment year 13-14 had rejected KPO companies by observing that Eclerx services Ltd was not comparable to the assessee. Hence learned counsel of the assessee pleaded that on same lines the other 2 companies namely Cheers interactive and Crossdomain should also be rejected 9. For the purpose of inclusion of the three comparables as above learned counsel of the assessee submitted that this ITAT for assessment year 13-14 has accepted that the comparables namely Almondz Global Securities Ltd, Chrisil risk and infrastructure solutions limited and ICRA management consulting servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thority :- We have noted that on identical set of facts in assessee's own case for assessment years 2012-13 and 2013-14 in ITA No. 2366 6321 dated 27.02.2019, wherein the assessee‟s appeal for A.Y. 2013- 14 has raised specific ground for re-characterisation of assessee as a KPO in place of non binding investment advisory and related services. The Tribunal while considering the functional similarities/dissimilarity of the assessee with other comparable held that the assessee is engaged in providing non-binding investment advisory and related support services. Though, no specific finding is mentioned in the order for AY 2012-13 and 2013- 14, however, the objection of the revenue that the assessee is KPO, is virtually rejected. We have further seen that in appeal for AY 2007-08 the coordinate bench of the Tribunal after detail analysis of service agreement held that the assessee is providing non-binding investment advisory and related support services. The order of the Tribunal was upheld by Hon ble Bombay High Court in ITA No. 1286 of 2012 dated 22.02.2013 reported vide (2013) 357 ITR 584(Bom). 9. No change in the facts or the functions undertaken by the assessee is b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervices by the aforementioned company can safely be held to be comparable to the investment advisory services that were provided by the assessee during the year under consideration. The aforementioned company was rejected as a comparable by the TPO/DRP for the reason that it had failed the export filter. We have deliberated at length and are unable to persuade ourselves to subscribe to the exclusion of the aforementioned company viz. Crisil Risk and Infrastructure Solutions Ltd. as a comparable for benchmarking the international transactions of the assessee for the year under consideration. We find that the DRP had in the assesses own case for the immediately preceding year viz. A.Y. 2012-13 directed the TPO not to consider export filter as it was not a relevant filter in the case of the assessee, since the services were rendered by the assessee for the A.E in India and also investments were to be made in India. In our considered view as there is no change in the facts during the year under consideration as against that of the immediately preceding year viz. A.Y. 2012-13, therefore, upholding of the application of the export filter by the DRP by adopting an inconsistent approach ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esaid facts as the aforementioned company i.e. Almondz Global Securities ltd. which during the year under consideration viz. A.Y. 2013-14 was purely into research based investment advisory, thus are of the considered view that the same was rightly selected as a comparable by the assessee. Insofar, the rejection of the said company as a comparable by the TPO/DRP is concerned, we find that the same is for the reason that the said company had failed the export filter. We are unable to subscribe to the aforesaid view so taken by the lower authorities and for the reasons discussed at length by us hereinabove, that as observed by the DRP in the case of the assessee for A.Y. 2012-13 the export filter was not relevant in the case of the assessee, thus do not find any favour with the said observations so drawn by the lower authorities and are of the considered view that the TPO/DRP had wrongly rejected the aforementioned company viz. Almondz Global Services Ltd. as a comparable in the case of the assessee. In terms of our aforesaid observations, we direct the AO/TPO to include the abovementioned company viz. Almondz Global Services ltd., in the final list of comparables for the purpose of b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orities were not correct in re characterisation of the assessee as KPO/high-end ITeS service provider instead of provider of nonbinding investment advisory services and related support services. We also hold that following comparables should be included for the analysis. Almondz Global Securities Ltd. Crisil Risk Infrastructure Solutions Ltd. ICRA Management Consulting Services Ltd. 19. We also hold that Eclerx Services Ltd. comparable should be excluded. The assessing officer/transfer pricing officer is directed to make the necessary competition in light of directions as above. 20. In the result this appeal by the assessee is partly allowed. 21. In the Stay Application No. 28/mum/2020 the assessee is seeking stay of demand arising in the ITA appeal adjudicated by us above. Since the issue has been partly decided in favour of the assessee and matter remitted back to the Assessing Officer for fresh computation the request of stay of demand becomes infructous as the demand arising no longer survive. I22. In the result Stay Application is treated as infructuous as assessee s appeal has been partly allowed. Order pronounced under ITAT rules 34(4) on 04.09 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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