TaxTMI 
TaxTMI 
2018 (12) TMI 2015
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....ion / adjustment. 2. On the facts and in the circumstances of the case and in law, the learned AO erred and the Hon'ble CIT(A) further erred in upholding / confirming the action of the learned AO in rejecting the contention of the Appellant to compute the margin of the alleged comparable companies based on multiple year financial data. 3. The CIT(A) / AO erred on facts and circumstances of the case and in law by not taking cognizance of the functions and risk of the Appellant as outlined in the Transfer Pricing documentation and as submitted during the course of the proceedings and the learned CIT(A) further grievously erred in disregarding the functional and risk profile of the appellant by making certain incorrect, irrelevant and unsubstantiated observations. 4. On the facts and in the circumstances of the case and in law, the learned C1T(A) erred in not appreciating that the Appellant is essentially a non-binding investment advisory services provider. 5. The CIT(A) / AO erred on facts and circumstances of the case and in law in rejecting 2 comparables out of total 5 comparables, identified by the Appellant by way of detailed and methodical search process as formi....
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....tor and has conducted its search for comparables in prowess and capitaline database applying following filters: Reject companies having mfg sales to total sales ratio of more than 25% of sales Reject companies having trading sales to total sales ratio of more than 25% of sales Reject companies having fund based income to total income ratio of more than 25% Reject companies having R&D expenses to sales ratio of more than 5% of sales Reject companies with Imentory to total assets ratio of more than 5% The assessee arrived at five comparables and used three year data to arrive at the arithmetic mean of such margin at 10.25%, since its own margin has been computed at 10.64%, the assessee has treated the transactions to be at arm's length. 5. The AO has rejected the study conducted by the assessee on the ground that the assessee has not used the RPT filler and that functionally different companies were selected as comparables. He rejected four of the five comparables selected by the appellant, added two of his own comparables and arrived at a arithmetic mean of margins at 60.97% as against the appellant's margin of 10.64%. In light of the fact that the adjustment was mo....
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..... Ltd (ITA. No.6504/Mum/2012) 2008-09 Mumbai Tribunal ruling in case of Temasek Holdings Advisors (1) P. Ltd (ITA. No.968/Mum/2014) 2009-10 Mumbai Tribunal ruling in case of Temasek Holdings Advisors (1) P. Ltd (ITA. No. 776/Mum/2015) 2010-11 Mumbai Tribunal ruling in case of Temasek Holdings Advisors (1) P. Ltd (ITA. No. 477/Mum/2016) 2011-12 Mumbai Tribunal ruling in case of Temasek Holdings Advisors (1) P. Ltd (ITA. No. 1429/Mum/2017) 2012-13 Mumbai Tribunal ruling in case of AGM India Advisors Private Limited ITA No. 4801/MUM/2015) 2010-11 Mumbai Tribunal ruling in the case of Warburg Pincus India P. Ltd. (ITA No. 1612/Mum/2015) 2010-11 Mumbai Tribunal ruling in the case of Warburg Pincus India P. Ltd. (ITA No. 1717/Mum/2014) 2009-10 Mumbai Tribunal ruling in case of General Atlantic Private Limited (ITA No. 1019/MUM/2014) 2009-10 Delhi Tribunal ruling in case of Avenue Asia Advisors (ITA No. 6683/Del/2013) 2009-10 Mumbai Tribunal ruling in the case of Blackstone Advisors India P Ltd. (ITA No. 1581/Mum/2014) 2008-09 Bombay High Court decision in the case of Genea Atlantic 2006-07 Private Limited (ITA No. 1993 of 2013 and 8914/Mum/2010) 14. We may gainfu....
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....Hon'ble High Court of Bombay in the case of : CIT Vs. General Atlantic Pvt. Ltd. (ITA No. 8914 of 2010, dated 08.03.2016 - A.Y 200607), therein submitted that now when pursuant to the aforesaid judgment of the Hon'ble High Court the functional comparability of the aforesaid comparable was no more res- integra therefore the adverse inferences so drawn by the lower authorities were liable to be set aside. That on the other hand the Ld. D.R though conceded to the fact that the RPT in the case of the aforesaid comparable was 14%, but however drawing support from the director's report for the year under consideration, therein submitted that the focus area of the said comparable, viz ICRA Management Consulting Services Ltd. (supra) was not merely investment advisory functions, but rather the same was substantially functionally different. It was further averred by the Ld. D.R that a perusal of the 'Profit and loss account' of the aforesaid comparable, which formed part of the APB revealed that the said comparable unlike the assessee was not merely into providing services, but was also into sales, and as such no feasible comparison could be carried out as against the bu....