EIGHT ROADS INVESTMENT ADVISORS LTD, MUMBAI V. ASST CIT CIR 6(2)(2), MUMBAI

ITA 1415/MUM/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 8721 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: K
• Assessment Year: 2012-2013
• Appeal Filed On: 01-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Transfer pricing; International transaction; Rule of consistency
• Section: 143(3)

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL K BENCH MUMB AI BEFORE SHRI G.S. PANNU, VICE- PRESIDENT AND SHRI PAWAN SINGH JUDICIAL MEMBER ITA NO. 1415/MUM/2017 (ASSESSMENT YEAR 2012-13 ) EIGHT ROADS INVESTMENTS PVT. LTD. [FORMERLY KNOWN AS FIL CAPITAL ADVISORS (INDIA) PVT. LTD. 304, 3 RD FLOOR, TOWERA PENINSULA BUSINESS PARK GANPATRAO KADAM MARG MUMBAI 400 013 PAN AABCF1370N VS. ACIT-6(2)(2) ROOM NO. 506, 5 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI 400 020 APPELLANT RESPONDE NT S.A. NO. 564/MUM/2018 (ASSESSMENT YEAR 2012-13 ) EIGHT ROADS INVESTMENTS PVT. LTD. [FORMERLY KNOWN AS FIL CAPITAL ADVISORS (INDIA) PVT. LTD. 304, 3 RD FLOOR, TOWERA PENINSULA BUSINESS PARK GANPATRAO KADAM MARG MUMBAI 400 013 PAN AABCF1370N VS. ACIT-6(2)(2) ROOM NO. 506, 5 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI 400 020 APPELLANT RESPONDE NT APPELLANT BY : SHRI NISHANT THAKKAR WITH MS. JASMIN AMALSADVAL A (ARS) RESPONDENT BY : SHRI ANAND MOHAN (CIT-DR) DATE OF HEARING : 11.09.2019 DATE OF PRONOUNCEMEN T : 11.09.2019 ORDERUNDER SECTION 254(1)OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER; 1. THE APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORDE R DATED 27.01.2017 PASSED UNDER SECTION 143(3) R/W SECTION 144C(13) OF THE INCOME TAX ITA NO. 1415 MUM 2017-EI GHT ROADS INVESTMENTS PVT. LTD. 2 ACT, 1961 (FOR SHORT 'THE ACT' ) FOR THE ASSESSMENT YEAR 201213, PASSED IN PURSUANCE OF DIRECTION OF THE DISPUTE RESOLUTION , PANEL-1 (DRP) MUMBAI DATED 29.11.2016. 2. BRIEF FACTS ARE, THE ASSESSEE A WHOLLY OWNED INDIAN SUBSIDIARY OF FIL CAPITAL MANAGEMENT (MAURITIUS) LTD. (FIL, MAURITIUS ), ENGAGED IN PROVIDING NONBINDING INVESTMENT ADVISORY SERVICES TO ITS OVERSEAS ASSOCIATE ENTERPRISES (A.E). THE ASSESSEE ALSO PROV IDES NON-BINDING INVESTMENT ADVISORY SERVICES TO ITS A.E., THEREFORE , IT IS A RISK MITIGATED ENTITY. FOR THE ASSESSMENT YEAR UNDER CONSIDERATION , THE ASSESSEE ENTERED INTO INTERNATIONAL TRANSACTION OF NONBINDING INVES TMENT ADVISORY SERVICES WITH ITS A.E. AND EARNED REVENUE OF RS. 26 .58 CRORE. THE ASSESSEE WHILE FILING RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION REPORTED INTERNATIONAL TRANSACTION WITH ITS AE. THE ASSESSEE ALSO FURNISHED ITS TRANSFER PRICING REPORT AS REQUIRED U NDER THE INCOME TAX ACT. FOR BENCH MARKING THE TRANSACTION, THE ASSE SSEE UNDERTOOK A STUDY BY ADOPTING TRANSACTION NET MARGIN METHOD (TNMM) AS MOST APPROPRIATE METHOD WITH OP/OC AS THE PROFIT LEVEL I NDICATOR ( PLI). BY CONSIDERING ITSELF AS THE TESTED PARTY, THE ASSESSE E UNDERTOOK A SEARCH PROCESS IN THE DATA BASES AND IDENTIFIED FOLLOWING FOUR COMPARABLES WITH AVERAGE ARITHMETIC MEAN OF 8.82% ON THE BASIS OF TH REE YEAR DATA. THE ASSESSING OFFICER REFERRED THE MATTER TO THE TPO FO R DETERMINATION OF ALP OF INTERNATIONAL TRANSACTION. FOR BENCHMARKING THE INTERNATIONAL ITA NO. 1415 MUM 2017-EI GHT ROADS INVESTMENTS PVT. LTD. 3 TRANSACTION, THE ASSESSEE ADOPTED TNM AS MOST APPRO PRIATE METHOD, OPERATING PROFIT/OPERATING COST WAS CONSIDERED AS P ROFIT LEVEL INDICATOR AND ASSESSEE COMPANY HAS TAKEN TESTED PARTY. THE AS SESSEE HAS SELECTED FOUR COMPARABLE COMPANY HAVING ARITHMETIC MEAN OF T HREE YEAR AVERAGE WEIGHTED MARGIN OF 8.82% IN THE FOLLOWING MANNER: SL.NO. NAME OF COMPARABLE THREE YEARS AVERAGE OP/OC SINGLE YEAR MARGIN OP/OC (FY- 11-12) 1 CYBER MEDIA RESEARCH CENTRE (FORMERLY IDC (INDIA) LTD. 9.85% -30.51% 2 ICRA MANAGEMENT CONSULTING SERVICES 1.93% 6.95% 3 INFORMED TECHNOLOGY (INDIA) LTD. 17.28% 8.26% 4 INTEGRATED CAPITAL SERVICES LTD. 0.95% -1.98% AVERAGE 8.82% -4.32% 3. THE TPO REJECTED ALL COMPARABLES OF THE ASSESSEE AN D SELECTED/INCLUDED LADDERUP CORPORATE ADVISORY PVT. LTD. AS COMPARABLE COMPANY WHOSE OP/OC IS 38.38% AND ACCORDINGLY, THE TPO SUGGESTED THE COMPUTATION IN THE FOLLOWING MANNER: AMOUNT A. OPERATING COST 247,253,988 B. ALP OP/OC MARGIN 38.38% C. ALP OPERATING PROFIT (AXB) 94,896,081 D. ALP VALUE OF INTERNATIONAL TRANSACTION (A+C) 342,150,069 E. ACTUAL VALUE OF INTERNATIONAL TRANSACTION 265,846,613 F. TP ADJUSTMENT (D-E) 76,303,456 4. THE TPO VIDE ORDER DATED 29.01.2016 WORKED OUT THE ADJUSTMENT OF RS. 7,63,03,456/-. ON RECEIPT OF ORDER OF TPO, THE ASS ESSING OFFICER PASSED ITA NO. 1415 MUM 2017-EI GHT ROADS INVESTMENTS PVT. LTD. 4 THE DRAFT ASSESSMENT ORDER PROPOSING THE AFORESAID ADDITION TO THE RETURN INCOME. THE ASSESSEE EXERCISED ITS OPTION TO FILE O BJECTION BEFORE THE DRP. THE OBJECTION OF ASSESSEE WAS REJECTED BY DRP VIDE DIRECTION DATED 29.11.2016. IN TERM OF DIRECTION OF DRP, THE ASSESSING OFFICER PASSED THE FINAL ASSESSMENT ORDER DATED 27.01.2017. AGGRIEVED BY THE ADDITIONS IN THE ASSESSMENT ORDER, THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE US. 5. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL: AGGRIEVED BY THE ORDER PASSED BY THE ASSISTANT COM MISSIONER OF INCOME TAX, CIRCLE - 6(2)(2), MUMBAI [HEREINAFTER REFERRED TO AS THE 'LEARNED AO'], AND BASED ON THE FACTS AND CIRCUMSTANCES OF THE CASE, E IGHT ROADS INVESTMENT ADVISORS PRIVATE LIMITED [HEREINAFTER REFERRED TO A S 'THE APPELLANT'] RESPECTFULLY CRAVES LEAVE TO PREFER AN APPEAL UNDER SECTION 253 OF THE INCOME- TAX ACT, 1961 ('ACT') IN PURSUANCE OF THE DIRECTION S ISSUED BY HONORABLE DISPUTE RESOLUTION PANEL - I (,DRP'), THEREBY INCRE ASING THE TOTAL TAXABLE INCOME OF THE APPELLANT TO RS 10,04,08,350 AS AGAIN ST THE TOTAL INCOME REPORTED IN THE RETURN OF INCOME FILED BY THE APPEL LANT OF RS 2,39,74,420. GROUND 1 THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LEARNED AO, BASED ON THE DIRECTIONS OF THE HON'BLE DRP, ERR ED IN RE-COMPUTING THE ARM'S LENGTH PRICE OF THE INTERNATIONAL TRANSACTION UNDERTAKEN BY THE APPELLANT RELATING TO NON-BINDING INVESTMENT ADVISORY AND REL ATED SERVICES AND ENHANCING THE COST PLUS MARK-UP FROM 18.26% TO 38.3 8% AS A RESULT OF REJECTION OF COM PARABLES IDENTIFIED BY THE APPELLA NT AND INCLUDING AN ADDITIONAL COMPARABLE. GROUND 2 THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LEARNED AO, BASED ON THE DIRECTIONS OF THE HON'BLE DRP, ERR ED IN MAKING AN UPWARD TRANSFER PRICING ADJUSTMENT OF RS 7,63,03,456 IN DE TERMINING THE ARM'S LENGTH PRICE OF THE INTERNATIONAL TRANSACTION UNDERTAKEN B Y THE APPELLANT RELATING TO PROVISION OF NON-BINDING INVESTMENT ADVISORY AND RE LATED SERVICES ON ACCOUNT OF THE FOLLOWING: A) REJECTING THE ECONOMIC ANALYSIS UNDERTAKEN AND D OCUMENTATION MAINTAINED BY THE ASSESSEE AND ALL THE COMPANIES SE LECTED AS COMPARABLES BY THE ASSESSEE IN THE TRANSFER PRICING DOCUMENTATI ON; ITA NO. 1415 MUM 2017-EI GHT ROADS INVESTMENTS PVT. LTD. 5 B) IDENTIFYING LADDERUP CORPORATE ADVISORY PRIVATE LIMITED (LADDERUP) AS AN ADDITIONAL COMPARABLE FROM THE SEARCH PROCESS CO NDUCTED BY THE ASSESSEE WITHOUT CONSIDERING THE FACT THAT LADDERUP HAS EARNED REVENUES FROM RENDERING SERVICES IN THE NATURE OF INVESTMENT /MERCHANT BANKING SERVICES; C) REJECTING THE USE OF CONTEMPORANEOUS AND MULTIPL E YEAR DATA AVAILABLE FOR COMPUTING THE ALP AS ON THE DATE OF FILING OF R ETURN OF INCOME AND RELYING ONLY ON THE SINGLE YEAR DATA (I.E. FOR THE YEAR ENDED 31 MARCH 2012) FOR THE PURPOSE OF DETERMINING THE ALP; AND D) NOT GRANTING THE APPELLANT THE BENEFIT OF WORKIN G CAPITAL ADJUSTMENT AND ADJUSTMENT FOR DIFFERENCE IN RISK PROFILE. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, VARY, OMI T, SUBSTITUTE OR AMEND ANY OR ALL OF THE ABOVE GROUNDS OF APPEAL, AT ANY TIME BEFORE OR AT, THE TIME OF THE APPEAL, SO AS TO ENABLE THE HON'BLE INCOME -TAX APP ELLATE TRIBUNAL TO DECIDE THIS APPEAL ACCORDING TO LAW. 6. WE HAVE HEARD THE SUBMISSION OF LD. AR OF THE ASSES SEE AND LD. DR FOR THE REVENUE AND PERUSED THE MATERIAL AVAILABLE ON R ECORD. THE LD. AR OF THE ASSESSEE SUBMITS THAT HE HAS TWO FOLD SUBMISSIO NS, FIRSTLY THAT LADDERUP CORPORATION ADVISORY PVT. LTD. (LADDERUP) WAS WRONGLY INCLUDED AS A COMPARABLE AND THE SAME IS NOT FUNCTI ONALLY COMPARABLE WITH THE ASSESSEE. SECONDLY, THE COMPARABLE COMPANY SELECTED BY ASSESSEE WERE WRONGLY EXCLUDED BY TPO/CONFIRMED BY DRP. FOR INCLUSION OF COMPARABLE SELECTED BY ASSESSEE, THE L D. AR OF THE ASSESSEE SUBMITS THAT THREE OF THE COMPARABLE I.E. ICRA MAN AGEMENT CONSULTING SERVICES LIMITED, IDC (INDIA) LIMITED AND INFORMED TECHNOLOGIES LIMITED WERE HELD TO BE COMPARABLE WITH THE ASSESSE E-COMPANY IN ASSESSEES OWN CASE FOR A.Y. 2010-11 IN ITA NO. 740 3/MUM/2014 DATED 25.10.2016. THE LD. AR OF THE ASSESSEE FILED THE COPY OF DECISION OF TRIBUNAL. FOR LADDERUP, THE LD. AR SUBMITS THAT EVEN IF THIS ITA NO. 1415 MUM 2017-EI GHT ROADS INVESTMENTS PVT. LTD. 6 COMPARABLE IS RETAIN AND THREE COMPARABLE NAMELY IC RA MANAGEMENT CONSULTING SERVICES LIMITED, IDC (INDIA) LIMITED AN D INFORMED TECHNOLOGIES LIMITED ARE INCLUDED IN FINAL SET OF C OMPARABLE, THE AVERAGE MARGIN WOULD BE WITHIN TOLERANCE RANGE. 7. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE SUPPO RTED THE ORDER OF LOWER AUTHORITIES. THE LD. DR FURTHER SUBMITS THAT THE TPO AND THE LD. DRP HAS GIVEN A COGENT REASONING WHILE EXCLUDING TH E COMPARABLE SELECTED BY ASSESSEE. 8. WE HAVE CONSIDERED THE SUBMISSION OF THE PARTIES AN D PERUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE NOTED THAT TH ERE IS NO DISPUTE ABOUT THE SELECTION OF MOST APPROPRIATE METHOD FOR BENCH MARKING OF INTERNATIONAL TRANSACTION. FURTHER THERE IS NO DISP UTE FOR THE CALCULATION OF ASSESSEES OPERATING MARGIN. THE NARROW DISPUTE ABOUT THE SET OF COMPARABLE AND THE DETERMINATION OF THEIR MARGIN. O N THE BASIS OF SINGLE YEAR MARGIN, THE ASSESSEE HAS ARRIVED ON AVERAGE AR ITHMETIC MEAN OF 4.32% OF FOUR COMPARABLE SELECTED BY ASSESSEE. TH E LD. TPO REJECTED ALL THE COMPARABLE OF THE ASSESSEE AND ADOPTED LADD ERUP WHOSE MARGIN IS AT 38.38%. WE HAVE NOTED THAT ON SAME SET OF FAC T IN ASSESSEES APPEAL FOR A.Y. 2010-11 IN ITA NO. 7403/MUM/2014 DA TED 25.10.2016, ICRA MANAGEMENT CONSULTANCY SERVICES LTD. INFORMED TECHNOLOGY AND IDC (INDIA) LTD. WERE HELD TO BE A GOOD COMPARA BLE. THE RELEVANT ITA NO. 1415 MUM 2017-EI GHT ROADS INVESTMENTS PVT. LTD. 7 PART OF THE FINDING OF TRIBUNAL IN RESPECT OF VARIO US COMPARABLE IS EXTRACTED BELOW: (A) ICRA MANAGEMENT CONSULTANCY SERVICES LTD . 24. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIES A ND PERUSED THE MATERIAL AVAILABLE ON RECORD IN THE LIGHT OF THE DECISIONS R ELIED UPON. FROM THE DOCUMENTARY EVIDENCES BROUGHT ON RECORD BY THE ASSE SSEE, WE HAVE OBSERVED THAT THE ASSESSEE IS ALSO PROVIDING NONBINDING INV ESTMENT ADVISORY SERVICE IN VARIOUS SECTORS SUCH AS INFRASTRUCTURE, RETAIL, TELECOMMUNICATION AND NETWORKING EQUIPMENT, HEALTH CARE, FINANCIAL INTERM EDIARIES, DESIGN AND ENGINEERING RELATED TO INFRASTRUCTURE, MEDIA AND CO MMUNICATION. THUS, AS COULD BE SEEN, THOUGH, THE SERVICE PROVIDED BY THE ASSESSEE COVERS THE WIDE SPECTRUM OF ACTIVITIES, HOWEVER, THE NATURE OF SERV ICE IS VIRTUALLY ONE VIZ. ADVISORY SERVICES. THE SAME IS THE CASE WITH THE CO MPARABLE. THOUGH, IT IS ALLEGED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE, THE COMPARABLE IS PROVIDING SERVICE THROUGH VARIOUS SECTORS, HOWEVER, THE NATURE OF SERVICE IS ADVISORY. WE HAVE ALSO NOTED THAT ABSOLUTELY SIMILA R ARGUMENT WAS ADVANCED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE IN RELAT ION TO THIS COMPARABLE IN CASE OF TEMASEC HOLDINGS ADVISORS INDIA PVT. LTD. ( SUPRA) IN A.Y. 201011. THE TRIBUNAL, AFTER CONSIDERING THE SUBMISSIONS OF THE LEARNED DEPARTMENTAL REPRESENTATIVE AND ALSO THE PROPOSITION ADVANCED BY HIM IN RELATION TO THE PRINCIPLES OF RES JUDICATA AND THE DECISION OF KALP ETTA ESTATES LTD. (SUPRA) RELIED UPON BY HIM IN THIS REGARD, ULTIMATELY TREAT ED THIS COMPANY AS A GOOD COMPARABLE OBSERVING AS UNDER: 20. AT THE OUTSET, THIS COMPARABLE WAS SUBJECT MAT TER OF CONSIDERATION BEFORE THE TRIBUNAL IN AY 2008-09 & 2 009-10, WHEREIN THIS COMPANY WAS HELD TO BE GOOD COMPARABLE BOTH ON THE GROUND OF FUNCTIONAL SIMILARITY AND IN VIEW OF PRIN CIPLES OF CONSISTENCY AS IT WAS HELD TO BE A GOOD COMPARABLE BY THE TPO IN THE EARLIER YEARS. FROM THE PERUSAL OF THE ANNUAL R EPORT, WHICH IS APPEARING FROM PAGES 156 TO 187 OF THE PAPER BOOK, WE FIND THAT IT IS ESSENTIALLY PROVIDING CONSULTANCY SERVICES IN DI VERSIFIED AREAS, LIKE IN GOVERNMENT SECTORS, INFRASTRUCTURE, ENERGY, CORPORATE ADVISORY, BANKING AND FINANCIAL SERVICES, ETC. IT F OCUSES ON CONSULTANCY AND ADVISORY WHICH IS ITS CORE AREA AND COMPETENCY. THE REVENUE GENERATION IS PURELY FROM CONSULTANCY F EES WHICH IS EVIDENT FROM PROFIT AND LOSS ACCOUNT AS ON 31ST MAR CH 2010 (APPEARING AT PAGE 176 OF THE PAPER BOOK). THE TPO IN HIS ORDER ITA NO. 1415 MUM 2017-EI GHT ROADS INVESTMENTS PVT. LTD. 8 HAS NOTED THAT ITS CONSULTATION OR ADVISORY OPERATI ONS RANGES IN VARIOUS FIELDS WHICH HAVE BEEN TABULATED BY HIM AT PAGES 9 TO 11 OF THE ORDER, WHICH ACCORDING TO HIM ASSESSEE IS NOT P ERFORMING. ON THE PERUSAL OF THE DIRECTORS REPORT AND ALSO THE R EMARKS OF THE TPO, WE FIND THAT THE ICRA MANAGEMENT IS PROVIDING CONSULTANCY SERVICES IN A MYRIAD AREAS RANGING FROM DEVELOPMENT , TRANSPORTATION, URBAN INFRASTRUCTURE, ENERGY SECTOR , BANKING AND FINANCIAL SERVICES AND ADVISING CROSS BORDER M&A TR ANSACTION ETC. SOME OTHER OBSERVATION MADE BY THE TPO IS THAT ICRA HAS PARTICIPATED IN VARIOUS INTERNATIONAL FORUMS, PARTN ERED WITH FOREIGN COMPANY IN MULTIPLE PROJECTS AND HAS A VERY BIG CLI ENT BASE UNLIKE ASSESSEE. HOWEVER ALL THESE FACTS DO NOT AFFECT THE CORE COMPETENCY AND FUNCTIONS OF THE SAID COMPANY, WHICH IS ADVISOR Y, BECAUSE IN ALL THE FIELDS IT IS RENDERING ONLY ADVISORY AND CONSUL TANCY SERVICES. THE WHOLE REVENUE IS AGAIN FROM CONSULTANCY/ADVISOR Y FEES. IN THE INSTANT CASE ALSO, THE ASSESSEE IS PROVIDING INVEST MENT ADVISORY SERVICES TO ITS AE IN DIVERSE INDUSTRIES LIKE, INFR ASTRUCTURE, TELECOM, MEDIA, BANKING ETC. TO ENABLE THE AE TO TAKE DECISI ON FOR MAKING INVESTMENTS. THE FUNCTIONS OF CONSULTANCY/ADVISORY HAVE TO BE SEEN AS ITS CORE COMPETENCE AREA AND NOT IN THE FIELD IN WHICH SUCH CONSULTANCY IS GIVEN. UNDER THE TNMM, ONE HAS TO SE E THE TRANSACTION UNDERTAKEN ARE COMPARABLE OR NOT AND WH ETHER ANY ADJUSTMENT IS REQUIRED TO OBTAIN A RELIABLE RESULT, BECAUSE UNDER TNMM THE NET MARGIN ARE LESS AFFECTED BY TRANSACTIO NAL DIFFERENCES AND IS MORE TOLERANT TO SOME MINOR FUNCTIONAL DIFFE RENCES BETWEEN CONTROLLED AND UNCONTROLLED TRANSACTIONS. HOWEVER, IF ANY UNIQUE FUNCTION OR PROPERTY SIGNIFICANTLY AFFECTS THE OPER ATING COSTS OR NET MARGIN OR HAS A BEARING IN THE GENERATION OF REVENU E ITSELF, THEN IT CANNOT BE CONSIDERED TO BE A FIT COMPARABLE FOR BEN CHMARKING THE NET MARGINS. HERE IT IS NOT THE CASE WHERE THERE IS ANY UNIQUE FUNCTIONS MATERIALLY AFFECTING THE REVENUE OR NET M ARGINS VIS--VIS THE FUNCTIONS PERFORMED BY ICRA. HENCE ON FUNCTIONA L LEVEL IT IS A GOOD COMPARABLE. AS STATED EARLIER, IN THE EARLIER YEARS, THE TRANSFER PRICING OFFICER HAS ACCEPTED ICRA TO BE A COMPARABLE AND IN LATER YEARS THE TRIBUNAL IN AY 2008-09 & 200 9-10 HAS HELD ICRA MANAGEMENT TO BE GOOD COMPARABLE QUA THE FUNCT IONS OF THE ASSESSEE AND THERE BEING NO MATERIAL CHANGE ON FACT S, FUNCTIONAL PROFILE OR ANY OTHER FACTOR IN THIS YEAR, THEN AS M ATTER OF CONSISTENCY, WE DO NOT WANT DO DEVIATE FROM OUR FIN DINGS GIVEN IN THE EARLIER YEARS. THERE CANNOT BE A PICK AND CHOOS E OF COMPARABLES EVERY YEAR UNLESS THERE ARE SOME MATERI AL DIFFERENCE IN FACTS AND CIRCUMSTANCES COMPELLING TO TAKE A DIF FERENT CONCLUSION. THUS, WE HOLD THAT ICRA MANAGEMENT IS A GOOD COMPARABLE AND SHOULD BE INCLUDED IN THE LIST OF FI NAL COMPARABLES. 25. AGAIN, IN THE CASE AGM INDIA ADVISOR PVT. LTD. (SUP RA), THE TRIBUNAL, AFTER CONSIDERING ALMOST SIMILAR ARGUMENT OF THE LEARNED DEPARTMENTAL REPRESENTATIVE, FOLLOWED THE DECISION IN TEMASEC HO LDINGS ADVISORS INDIA ITA NO. 1415 MUM 2017-EI GHT ROADS INVESTMENTS PVT. LTD. 9 PVT. LTD. (SUPRA) UPHOLDING THE COMPANY AS A COMPAR ABLE. WHILE DOING SO, THE BENCH ALSO TOOK NOTE OF THE DECISION RELIED UPO N BY THE LEARNED DEPARTMENTAL REPRESENTATIVE WHICH WERE ALSO CITED B EFORE US. UNDISPUTEDLY, THE AFORESAID DECISIONS OF THE COORDINATE BENCH AR E FOR THE VERY SAME ASSESSMENT YEAR I.E., ASSESSMENT YEAR 201011. THER EFORE, RESPECTFULLY FOLLOWING THE AFORESAID DECISIONS OF THE COORDINAT E BENCH, WE INCLUDE THIS COMPANY AS A COMPARABLE. B. IDC (INDIA) LTD . 26. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIES A ND PERUSED THE MATERIAL AVAILABLE ON RECORD IN THE LIGHT OF THE DECISIONS R ELIED UPON. ON A PERUSAL OF THE INFORMATION AVAILABLE IN THE WEBSITE AND ANNUAL REPORT OF THE COMPANY, WE HAVE NOTED THAT IT IS PRIMARILY ENGAGED IN THE B USINESS OF MARKET RESEARCH AND MANAGEMENT CONSULTANCY. THEREFORE, THE CONTENTI ON OF THE LEARNED DEPARTMENTAL REPRESENTATIVE THAT IT IS A PRODUCT CO MPANY MAY NOT BE CORRECT. FURTHER, WE HAVE NOTED THAT IN CASE OF TEM ASEC HOLDINGS ADVISORS INDIA PVT. LTD. (SUPRA), THE VERY SAME ARGUMENT OF IDC INDIA LTD. BEING A PRODUCT COMPANY AND PROVIDES GO TO MARKET SERVICE W AS ADVANCED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE. HOWEVER, REJEC TING SUCH CONTENTIONS OF THE LEARNED DEPARTMENTAL REPRESENTATIVE, TRIBUNA L INCLUDED THIS COMPANY AS A COMPARABLE HOLDING AS UNDER: 22. THIS COMPARABLE THOUGH ACCEPTED BY THE TPO AS A GOOD COMPARABLE, HOWEVER, THE DRP HAS ADDITIONALLY REJEC TED THIS COMPARABLE. IN ASSESSMENT YEAR 2008-09, THE TRIBUNA L HAS HELD TO BE A GOOD COMPARABLE, FIRSTLY, ON THE GROUND THAT T HIS COMPANY IS ALSO ENGAGED IN THE ADVISORY AND CONSULTANCY SERVIC ES FOR THE PURPOSE OF INVESTMENT MADE IN VARIOUS SECTORS AND S ECONDLY, IT HAS BEEN FOUND TO BE GOOD COMPARABLE BY THE TPO IN THE ASSESSMENT YEAR 2007-08 AND 2009-10. ONCE COMPANY H AS BEEN HELD TO BE GOOD COMPARABLE CONSISTENTLY FOR THREE Y EARS THEN WITHOUT ANY CHANGE IN THE MATERIAL FACTS, IT CANNOT BE HELD THAT THIS COMPARABLE COULD BE REJECTED IN THIS YEAR. MOR EOVER, IN THE CASE OF CARLYLE ADVISORY INDIA LTD., ITAT MUMBAI BE NCH, REPORTED IN 43 TAXMAN.COM 184, THE TRIBUNAL HELD TH AT THIS ITA NO. 1415 MUM 2017-EI GHT ROADS INVESTMENTS PVT. LTD. 10 COMPANY IS A GOOD COMPARABLE WITH THE COMPANIES REN DERING INVESTMENT ADVISORY SERVICES. THIS DECISION OF THE CARLYLE ADVISORS HAVE ALSO UPHELD BY THE HONBLE BOMBAY HIG H COURT. MOREOVER, WE HAVE ALREADY DISCUSSED THE FUNCTIONS P ERFORMED BY THE IDC INDIA LTD WHILE DEALING WITH LD. COUNSELS ARGUMENT THAT FUNCTIONS OF ADVISORY SERVICES ARE QUITE SIMILAR TO THE FUNCTIONS OF THE ASSESSEE AND, THEREFORE, WE ACCEPT THE ASSESSEE S CONTENTION THAT THIS COMPARABLE CANNOT BE REJECTED. ACCORDINGL Y, SAME IS DIRECTED TO BE INCLUDED IN THE COMPARABILITY LIST. 27. IN CASE OF AGM INDIA ADVISORS PVT. LTD. (SUPRA), TH E COORDINATE BENCH AFTER CONSIDERING THE VERY SAME ARGUMENT ADVANCED B Y THE LEARNED DEPARTMENTAL REPRESENTATIVE AND FOLLOWING THE DECIS ION RENDERED IN TEMASEC HOLDINGS ADVISORS INDIA PVT. LTD. (SUPRA), HELD THAT THE COMPANY IS A GOOD COMPARABLE. WHILE DOING SO, THE TRIBUNAL HAD GIVEN A CATEGORICAL FINDING THAT IDC INDIA LTD. IS NOT A PRODUCT COMPAN Y. SINCE THE AFORESAID DECISIONS OF THE TRIBUNAL ARE FOR THE VERY SAME ASS ESSMENT YEAR, THEY WILL SQUARELY APPLY TO THE FACTS OF THE PRESENT CASE. MO REOVER, WE HAVE NOTED THE FACT THAT IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 200910, THIS COMPANY HAS BEEN ACCEPTED AS A COMPARABLE BY THE TR ANSFER PRICING OFFICER / DRP. THAT BEING THE CASE, WE DO NOT SEE ANY JUSTI FIABLE REASON FOR EXCLUDING THIS COMPANY. AS FAR AS THE DECISION REND ERED IN CASE OF TEVAPHARM PVT. LTD. (SUPRA), AFTER CAREFULLY READIN G THE SAID ORDER, WE HAVE NOTED THAT NOWHERE THE TRIBUNAL HAS HELD THAT IDC I NDIA LTD. IS A PRODUCT COMPANY. ON THE CONTRARY, IT WAS EXCLUDED SINCE THE TRIBUNAL FOUND IT FUNCTIONALLY DISSIMILAR TO THAT ASSESSEE. THE DECIS ION OF ACTIS ADVISORS PVT. LTD. (SUPRA) IS ALSO FACTUALLY DISTINGUISHABLE, HEN CE, WOULD NOT BE APPLY. THEREFORE, RESPECTFULLY FOLLOWING THE DECISIONS OF THE COORDINATE BENCH OF THE TRIBUNAL REFERRED TO ABOVE, WE HOLD THAT IDC IN DIA LTD. IS A COMPARABLE TO THE ASSESSEE. C. INFORMED TECHNOLOGIES LTD. 35. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIES A ND PERUSED THE MATERIAL AVAILABLE ON RECORD IN THE LIGHT OF THE DECISIONS R ELIED UPON. ON A PERUSAL OF THE MATERIAL ON RECORD, WE HAVE NOTED THAT THIS COM PANY IS BASICALLY ENGAGED ITA NO. 1415 MUM 2017-EI GHT ROADS INVESTMENTS PVT. LTD. 11 IN PROVIDING DATA MANAGEMENT SERVICE TO THE FINANCI AL SECTOR. CONSIDERING THE AFORESAID FACT, THE TRIBUNAL IN TEMASEK HOLDING S ADVISORS (I) PVT. LTD. (SUPRA), WHILE INCLUDING THE COMPANY AS A COMPARABL E HAS OBSERVED AS UNDER: (V) INFORMED TECHNOLOGIES LTD . THIS COMPANY MOSTLY OFFERS RANGE OF DATA MANAGEMENT SERVICES TO THE FINANCIAL SECTOR IN USA. IT COLLECTS AND ANALYSES DATA OF FINANCIAL FUN DAMENTALS, CORPORATE GOVERNANCE AND CAPITAL MARKET. IT OUTSOUR CE SERVICES I.E., BPO SERVICES CONSISTING OF FINANCIAL DATA BAS E AND BACK OFFICE ACTIVITIES FOR RESEARCH AND ADVISORY REPORTS . THUS, THE DATA OUTSOURCING CHARGES ARE MOSTLY RELATED TO ANALYSING OF DATA BASED ON WHICH ADVISE IS GIVEN FOR THE INVESTMENT P URPOSE IN INDIA. MOREOVER, THIS COMPANY HAS BEEN ACCEPTED BY THE TPO IN THE YEAR 200910. THUS, IT IS A GOOD COMPARABLE. 36. WE DO NOT FIND ANY MATERIAL DIFFERENCE BETWEEN THE FACTS IN ASSESSEES CASE AND IN CASE OF TEMASEK HOLDINGS ADVISORS (I) PVT. L TD. (SUPRA) ON THE BASIS OF WHICH THE TRIBUNAL INCLUDED IT AS A COMPARABLE. MOREOVER, THERE IS NO DISPUTE THAT THE TRANSFER PRICING OFFICER HAS ACCEP TED THIS COMPANY AS A COMPARABLE IN ASSESSEES OWN CASE FOR ASSESSMENT YE AR 200910. THAT BEING THE CASE, IN OUR CONSIDERED OPINION, THE COMPANY SH OULD BE TREATED AS COMPARABLE TO THE ASSESSEE. 9. IN VIEW OF THE AFORESAID DISCUSSION, WHEREIN IN ASS ESSEES OWN CASE ICRA MANAGEMENT CONSULTING SERVICES LTD., IDC (INDI A) LTD. AND INFORMED TECHNOLOGIES LTD. WERE CONSIDERED TO BE A COMPARABLE COMPANY, THEREFORE, IN OUR VIEW ALL THREE COMPARABL E SHOULD BE TREATED AS COMPARABLE TO THE ASSESSEE. THEREFORE, FOLLOWING THE RULE OF CONSISTENCY, WE DIRECT THE ASSESSING OFFICER/TPO TO INCLUDE THE ABOVE THREE COMPARABLE AS COMPARABLE AND TO DETERMINE ALP AFRESH AS PER THE OBSERVATION MADE HEREINABOVE. FOR EXCLUSION OF LADD ERUP, THE LD. AR ITA NO. 1415 MUM 2017-EI GHT ROADS INVESTMENTS PVT. LTD. 12 HAS NOT SERIOUSLY PRESSED, THEREFORE, THE GROUND RE LATED TO EXCLUSION THEREOF IS TREATED AS NOT PRESSED. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. S.A. NO. 564/MUM/2018 11. AS WE HAVE ALLOWED THE APPEAL OF ASSESSEE, THEREFOR E, THE S.A. FILED BY ASSESSEE HAS BECOME INFRUCTUOUS. ORDER PRONOUNCED IN THE OPEN COU RT ON 11/09/2019. SD/- SD/- G.S. PANNU PAWAN SI NGH VICE-PRESIDENT JUDICIAL MEMBER MUMBAI, DATE: 11.09.2019 SK COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. DR K BENCH, ITAT, MUMBAI 6. GUARD FILE BY ORDER, DY./ASST. REGISTRAR ITAT, MUMBAI