TaxTMI 
TaxTMI 
2014 (10) TMI 864
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....he income of the Appellant [out of the total addition of Rs. 122,087,265 as proposed by the Learned Transfer Pricing Officer-I (I), New Delhi (hereinafter referred to as 'Ld. TPO')/ Ld. AO in its draft assessment order under section 143(3) read with section 144C] by holding that its international transaction pertaining to provision of non-binding financial advisory and consultancy services do not satisfy the arm's length principle prescribed under the Income Tax Act, 1961 ('the Act'). 3. On facts and in law, the Hon'ble DRP, Ld. AO and Ld. TPO erred in disregarding the Assessee's use of multiple year/ prior years' data in contravention of the provision of section 92C of the Act read with Rule 10B and Rule 10D(4) of the Income Tax Rules, 1962 ('Rules'). 4. On facts and in law, the Hon'ble DRP, Ld. AO and Ld. TPO erred in disregarding the doctrine of impossibility of performance in contravening Section 92D of the Act read with Rule 10D(4) of the Rules, which mandate the use of contemporaneous data for the determination of ALP of international transactions. 5. On facts and in law, the Hon'ble DRP and Ld. AO err....
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....g the reimbursement of expenses received from AE as part of the "non-binding financial advisory and consultancy services" transaction of the Appellant and re-computing the Profit Level Indicator CPLI') after considering such reimbursements as part of the operating revenue and operating cost. 11. On facts and in law, the Hon'ble DRP, Ld. AO and Ld. TPO erred in not providing the benefit of (+/-) 5 percent range mentioned in proviso to section 92C(2) of the Act while computing the ALP. 12. On the facts and in the circumstances of the case, the Ld. AO erred in initiating penalty proceedings under section 271 (1)( c) of the Act. 13. On the facts and in the circumstances of the case, the Ld. AO erred in levying interest under section 2348 and 234C of the Act. 14. On facts and in law the Ld. AO made computational errors in calculating the interest under section 2348 and 234C of the Act. The above 'Grounds of Appeal' are all independent and without prejudice to one and another. The appellant also craves leave to supplement, to cancel, amend, add and/or otherwise alter or modify, any or all, grounds of appeal stated here....
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.... known as CDC Advisers Private Limited) was incorporated as a private limited company in India on March 26, 1998. The primary objective of Actis India is to provide investment advisory services to its AEs (primarily Actis) which includes identifying and evaluating investment and disposition opportunities in India. The services/ functions performed by Actis India in this regard are subject to agreement entered between AEs and Actis India. Under the agreement, Actis India shall, inter-alia: a) Identify, create, evaluate, screen, review, conduct due-diligence, carry out investment analysis and research, report on new opportunities for the possible investment by the funds managed by the AE, and advise on such particular factors relating thereto as Actis India considers relevant for consideration by the AE; b) Identify, create, evaluate, screen, review, conduct due diligence, carry out investment analysis and research, report on new opportunities for the possible disposal of an investment and advise on such particular factors relating thereto as Actis India considers relevant for consideration by the AE; c) In its capacity as advisor, recommend for considerati....
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....round nos. 1, 4 and 5 are general in nature. 4.1. Ground nos. 3 and 8 are dismissed as 'not pressed'. 4.2. Ground no.9 is withdrawn without prejudice to the rights of the assessee to claim risk adjustment in future years. 4.3. Ground No 12 is dismissed as " premature." Ground Nos.13 & 14 are consequential in nature. 4.4. This leaves us with ground No 2,6,7,10 and 11. 4.5. Ground No.2 read with ground Nos. 6 and 7 are on the issue of selection of comparables. 5. We first take up the arguments of the assessee that DRP and the AO have erred in selection of Motilal Oswal Investment Advisors (P) Ltd., as a comparable. The submissions of the Assessee on this issue is that the functional profile of M/s Motilala Oswal Investment Advisors (P) Ltd., is not comparable to the functional profile of the assessee and that it was held so by the Tribunal in the case of M/s Carlyle India Advisors (P) ltd., Vs DCIT, Circle 10(1) Mumbai in ITA No.7367/MUM/2012 of ITAT "K" Bench of the Mumbai Tribunal vide order dt. 07.02.2014. 5.1. Ld. DR relies on the order of the DRP and also on the functional profile of M/s Motilal Oswal Investment Advisors(P) Ltd., given in the Transfe....
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....successfully as against 14 completed in the immediately preceding year. A close look at the financial statements of the said company show that the income from operations have been shown only as advisory fees whereas it is admittedly an undisputed fact that the said company is engaged in diversified activities. Segmental reporting is not available. Profit and loss account appears to be only of consolidated accounts. The said company is registered with SEBI as a merchant banker and the Director's report show that it is into take over, acquisitions, disinvestments etc. In the absence of specific data it is not possible to make comparison. It can therefore be safely said that the said company being into merchant banking and cannot be cosndiered as a comparable. We, accordingly direct the AO not to consider MOIA Pvt.Ltd. as a comparable for the determination of ALP and redetermine the ALP excluding MOIA Pvt.Ltd. (as per our findings) and including M/s IDC( as per the directions of the DRP) in the light of the provisions of S.92C(2) r.w.s. 92C(2A) of the Act. Ground no. 4.1 and ground no.9 are accordingly allowed. 5.5. This decision is followed by another Co-Ordinate Bench of the ....
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....ts in the international markets". As per page 15/AR: "The company is a research company, primarily dealing in research and survey services and products. It does not have any physical inventories. Thus, paragraph 4(ii) of the order is not applicable." As per page 31/AR: "12) The company is a single segment company in the business of market research and management consultancy. No further disclosures are required under AS-17, other than those already provided in the financial statements". As per the website http://www/cybermedia.co.in/static/products, the company has following products since long time ago: Products: When Cyber Media launched its first product in 1982, Dataquest, a print magazine on computers (which was barely a $ 20 million industry those days) and the first computer magazine, it was with a clear focus which was to educate India about technology and facilitate computer users to leverage information technology to bring about progress within the country. Dataquest completes 3 decades this year and continues to maintain similar objectives. Though these 3 decades, CyberMedia has launched numerous media properties for t....