2018 (8) TMI 1950

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....nvestment Advisors Pvt. Ltd. selected by the Transfer Pricing Officer as a comparable. 3. Brief facts are, the assessee is an Indian Company. As stated by the Assessing Officer, assessee is engaged in the business of financial advisory services and in the relevant previous year, it has entered into international transaction relating to provision of investment sub-advisory services to its overseas Associated Enterprise (AE). For the assessment year under dispute, the assessee filed its return of income on 28th November 2011 declaring total income of Rs. 1,34,43,182. During the assessment proceedings, the Assessing Officer on examining the transfer pricing study report submitted by the assessee found that the assessee has earned a mark-up ....

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....and Future Capital Investment Advisors Ltd. finding them to be functionally different from the assessee. Proceeding further, the Assessing Officer selected Motilal Oswal Advisory Pvt. Ltd. as a comparable in addition to IIML Asset Advisors Ltd. and Future Capital Holdings Ltd. selected by the assessee. Since, the arithmetic mean of the three comparables selected by the Assessing Officer worked out to 38.38%, the arm's length price of the transaction with the A.E. was determined @ Rs. 8,54,43,244, as against the price charged by the assessee at Rs. 7,43,28,625. The resultant difference of Rs. 1,11,14,619, was treated as the transfer pricing adjustment and added to the income of the assessee. Being aggrieved of such addition made by the A....

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....n record. Though, the Assessing Officer selected Motilal Oswal Investment Advisors Pvt. Ltd., stating that it is functionally similar to the assessee, however, he himself has observed that this company is engaged in various activities including merchant banking / investment banking also. Notably, in course of hearing of appeal, the learned Commissioner (Appeals) has examined in detail the functionality of this company by analysing the documentary evidences available on record. On verifying the material on record, he has found that the company is into diversified activities including merchant banking / investment banking concerning private placement of equity, debt and convertible instrument covering international and domestic market, merger....