2020 (1) TMI 1171

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....g on behalf of the assessee submitted that the assessee is providing Investment Advisory Services. The assessee is subsidiary of Clear Capital Partner, Cyprus. The assessee entered in international transaction within group entity based in Singapore. The assessee applied Transactional Net Margin Method (TNMM) as most appropriate method to benchmark its international transactions. The assessee selected seven comparables to determining the arm's length price of the international transactions. The TPO accepted TNMM as the most appropriate method however, the TPO excluded certain comparables selected by the assessee and introduced fresh comparables. The arithmetic mean of the final set of comparables selected by the TPO was42.66% as against ....

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.... tax deducted at source by the deductor, provisions of section 205 of the Act bars the Department to recover TDS amount on whose behalf the amount has already been deducted. 4. Aggrieved against the assessment order the assessee filed appeal before CIT(A). The first appellate authority in respect of TP adjustment granted part relief to the assessee in deleting some of the comparables selected by the TPO . However, the CIT(A) erred in accepting Goldman Sachs and AGM India Advisors Pvt. as comparables. The ld. Authorized Representative for the assessee pointed that both these companies are rendering services to their subsidiaries / AEs only. Thus, they fail Related Party Transaction (RPT) filter. Though their inclusion would not materially....

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....es. The final set of comparables selected by the TPO are as under:- S.No. Name of the comparable OP/TC (%) 1. Future Capital Investment Advisors Ltd. 15.71 2. Future Capital Holdings Ltd.(Segment-Investment advisory) 31.68 3. IDFC Investment Advisors Ltd. 36.62 4. ICRA Online Ltd. 41.77 5. Kshiti Investment Advisory Co.Ltd. 32.33 6. Motilal Oswal Investment Advisors Pvt. Ltd. 97.87   ARITHMETIC MEAN 42.66 7. The assessee assailed the findings of TPO and the final list of comparables before the CIT(A). The CIT(A) finally selected following four comparables. (1) Goldman Sachs (2) AGM India Advisors Pvt. Ltd. (3) ICRA Management Consultan....

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....1,70,725/-. The ld. Authorized Representative for the assessee has drawn our attention to the mails and TDS summary statement furnished before CIT(A) as Annexure-4 to substantiate that the deductor has confirmed deduction of tax at source on interest payments to the assessee. 9. The Hon'ble Bombay High Court in the case of Yashpal Sahni (supra) has held that where the assessee has been able to establish that the tax has been deducted at source, section 205 of the Act bars to recover TDS amount from the assessee (deductee). The relevant extract of the judgment of Hon'ble High Court in this regard is reproduced herein below:- 24. As stated earlier, in the present case the petitioner-assessee has established that from his s....

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....y the demand to the extent tax has been deducted from his income. It was further specified that section 205 of the Income-tax Act, 1961 puts a bar on direct demand against the assessee in such cases and the demand on account of tax credit mismatch in such situations cannot be enforced coercively. 2. However, instances have come to the notice of the Board that these directions are not being strictly followed by the field officers. 3. In view of the above, the Board hereby reiterates the instructions contained in its letter dated 01.06.2015 and directs the assessing officers not to enforce demands created on account of mismatch of credit due to non-payment of TDS amount to the credit of the Government by the deductor. These ....