Appeal allowed for statistical purposes, issues set aside for fresh determination. Emphasis on fair opportunity for evidence.

The appellant's appeal was allowed for statistical purposes, with all issues set aside to the AO/TPO for fresh determination. The Tribunal emphasized the need for the appellant to have a proper opportunity to present necessary evidence and explanations. The order was pronounced on 03-01-2019.

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Issues Involved:
1. Transfer Pricing Adjustment relating to international transactions of the Investment Banking Division.
2. Transfer Pricing Adjustment relating to Securities Broking transactions.
3. Claim for depreciation on goodwill.
4. Attribution of shortfall to all transactions versus proportion of international transactions under the Investment Banking Division.

Issue-wise Detailed Analysis:

1. Transfer Pricing Adjustment relating to international transactions of the Investment Banking Division:
The appellant contested the addition of Rs. 342,133,208 made by the AO/TPO under the directions of the DRP, arguing that the transfer pricing methodology they selected was disregarded. The AO/TPO used the Transactional Net Margin Method (TNMM) instead of the appellant's chosen method and rejected the comparable entities and multiple-year data used by the appellant. The DRP directed the AO to compute the margin using only three comparables: AK Capital Services Ltd., Batliwala & Karani Securities India Pvt. Ltd., and CIL Securities Ltd., rejecting adjustments for marketing and startup expenses. The Tribunal, noting the identical facts from an earlier year, set aside the matter back to the AO/TPO for fresh determination, emphasizing the need for proper opportunity for the appellant to present evidence and explanations.

2. Transfer Pricing Adjustment relating to Securities Broking transactions:
The appellant challenged the addition of Rs. 7,878,825 related to equity broking services. The AO/TPO, under the DRP's directions, rejected adjustments for differences in volumes transacted and research costs, and arbitrarily considered the top 10 third-party clients for determining the ALP. The Tribunal, aligning with the first issue, set aside this matter to the AO/TPO for fresh determination, ensuring the appellant is given a proper opportunity to present relevant evidence and explanations.

3. Claim for depreciation on goodwill:
The appellant claimed depreciation on goodwill amounting to Rs. 386,373,250, which was disregarded by the AO. The Tribunal noted the absence of discussion on this issue in the lower authorities' orders and decided to set aside this issue to the AO for consideration while adjudicating the assessment year.

4. Attribution of shortfall to all transactions versus proportion of international transactions under the Investment Banking Division:
The appellant raised an additional ground that the AO/TPO and DRP erred in attributing the entire shortfall of Rs. 342,133,208 to all transactions instead of restricting it to the proportion of international transactions under the Investment Banking Division. Since the main issue was set aside to the AO, the Tribunal allowed the appellant to raise this issue with the AO/TPO for a decision on whether the shortfall should be attributed to all transactions or only to the proportion of international transactions.

Conclusion:
The appeal of the appellant was allowed for statistical purposes, with all issues set aside to the AO/TPO for fresh determination, ensuring the appellant is given a proper opportunity to present necessary evidence and explanations. The order was pronounced in the open court on 03-01-2019.

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