WELLS FARGO REAL ESTATE ADVISORS P. LTD, HYDERABAD V. DCIT CIR 14(3)(1), MUMBAI

ITA 1520/MUM/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0683 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-01-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 17-03-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V JENARDHANANDR
• Keywords: Transfer pricing; International transaction; Rule of consistency

Judgement Text

1 , INCOME-TAX APPELLATE TRIBUNAL -KBENCH MUMBAI , , BEFORE S/SH.RAJENDRA,ACCOUNTANT MEMBER AND AMARJIT SINGH,JUDICIAL MEMBER ./I.T.A./1520/MUM/2016, / ASSESSMENT YEAR: 2011-12 WELLS FARGO REAL ESTATE ADVISORS PVT.LTD. (PREVIOUSLY KNOWN AS WACHOVIA MANAGEMENT SERVICES PRIVATE LIMITED) PLOT NO.1263/1, ROAD NO.63A, JUBILEE HILLS, HYDERABAD-500 033. PAN:AAACW 7131 M VS. DCIT-CIRCLE-14 (3)(1) ROOM NO.475, 4 TH FLOOR, AAYAKAR BHAVAN M.K. ROAD, MUMBAI-400 020 ( /APPELLANT ) ( / RESPONDENT) / REVENUE BY: SHRI V. JENARDHANAN-DR /ASSESSEE BY: SHRI M.P. LOHIA / DATE OF HEARING: 01/11/2017 / DATE OF PRONOUNCEMENT: 17/01/2018 PER RAJENDRA, AM - CHALLENGING THE ORDER OF THE ASSESSING OFFICER,DATE D 27/11/2015,PASSED IN PURSUANCE OF THE DIRECTIONS OF THE DRP-2,MUMBAI,DTD. 27/11/2015,THE ASSESSEE HAS FILED PRESENT APPEAL. ASSESSEE-COMPANY,ENGAGED IN THE BUSINESS OF PROVIDI NG NON-BINDING INVESTMENT ADVISORY SERVICES AND SUPPORT SERVICES TO ITS ASSOCIATED ENT ERPRISE(AE),FILED ITS RETURN OF INCOME ON 29/11/2011,OFFERING TOTAL INCOME OF RS.2.58 CRORES. THE AO COMPLETED THE ASSESSMENT ON, 04/ 01/2016, U/S.143 (3) R.W.S.144C (13) OF THE ACT,DET ERMINING ITS INCOME AT RS. 5.87 CRORES. 2. DURING THE COURSE OF HEARING BEFORE US,THE AUTHORIS ED REPRESENTATIVE (AR)STATED THAT FIRST THREE GROUNDS WERE OF GENERAL NATURE,THAT THE ASSES SEE WAS NOT INTERESTED IN PRESSING GROUNDS OF APPEAL NO. 4 AND 7.THEREFORE,WE ARE NOT ADJUDIC ATING GROUNDS NO.1-3.GROUNDS NO. 4 AND 7 STAND DISMISSED,AS NOT PRESSED. 3. DURING THE ASSESSMENT PROCEEDINGS, THE AO FOUND THA T THE ASSESSEE HAS ENTERED INTO INTERNATIONAL TRANSACTIONS (IT.S) WITH ITS ASSOCIAT ED ENTERPRISES (AE).HE MADE A REFERENCE TO THE TRANSFER PRICING OFFICER (TPO) TO DETERMINE THE ARMS LENGTH PRICE (ALP) OF THE IT.S. HE PROPOSED AN UPWARD ADJUSTMENT OF RS.4.89 CRORES,VID E HIS ORDER DATED 27/01/2015. ACCORDINGLY, THE AO ISSUED A DRAFT ASSESSMENT ORDER AND IT WAS CHALLENGED BEFORE THE DRP. AFTER RECEIVING THE DIRECTIONS OF THE DRP,THE AO FI NALISED THE ASSESSMENT, AS STATED EARLIER. 4. EFFECTIVE GROUND OF APPEAL (GS.OA-5&6)IS ABOUT EXCL USION OF CERTAIN COMPARABLES AND INCLUSION OF TWO COMPARABLES.DURING THE TRANSFER PR ICING (TP) PROCEEDINGS, THE TPO FOUND THAT THE ASSESSEE HAD EARNED A NET PROFIT MARGIN OF 15.03% ON OPERATING COSTS, AS COMPARED TO THE WEIGHTED AVERAGE MARGIN OF 12.59% ON OPERATING COSTS CONSIDERING THE FINANCIAL DATA OF ITA/1520/M/16- WELLS FARGO REAL ESTATE ADVISORS PV T.LTD. 2 COMPARABLE COMPANIES FOR THE PAST THREE AY.S I.E. A Y.S 2009-10,2010-11AND 2011-12,THAT THE UPDATED MARGIN USING SINGLE YEAR DATA WORKED OU T AT 11.13% ON OPERATING COST, THAT IT HAD USED TNMM AS MOST APPROPRIATE METHOD, THAT IT CLAIM ED THAT IT.S UNDERTAKEN BY IT WERE AT ARMS LENGTH. IT HAD SELECTED FOLLOWING SEVEN COMPA RABLES:- ACCESS INDIA ADVISERS LTD.,FUTURE CAPITAL INVESTMEN T ADVISERS LTD.,ICRA MANAGEMENT CONSULTING SERVICES LTD., IDCI LIMITED , INFORMED T ECHNOLOGIES LTD., INTEGRATED CAPITAL SERVICES LTD. AND KINETIC TRUST LTD. BUT,DATA FOR THREE COMPARABLES, NAMELY ACCESS INDIA ADVISERS LTD., FUTURE CAPITAL INVESTMENT ADVISERS LTD. AND KINETIC TRUST LTD,WAS NOT AVAILABLE FOR THE YEAR UNDER CONSIDERATION.THEREFORE,THE STAND ALONE MARGIN WAS TAKEN FOR THE YEAR UNDER APPEAL.THE TPO REJECTED ALL THE COMPARABLES SELECTED BY THE ASSESS EE AND SELECTED THREE NEW COMPARABLES TO BENCHMARK THE IT.S. THE SUMMARY OF THE MARGINS AND BY COMPARABLE SELECTED BY THE TPO, CAN BE TABULISED AS UNDER: SN. NAME OF THE COMPANY MARGIN % 1 MOTILAL OSWAL ADVISERS INDIA PRIVATE LTD. 82.57 2 LADDERUP CORPORATE ADVISORY PRIVATE LTD. 52.42 3 MOTILAL OSWAL PRIVATE EQUITY ADVISERS INDIA PRIVA TE LTD. 32.38 ARITHMETIC MEAN 55.68 THE AO ISSUED DRAFT ORDER AFTER RECEIVING THE ORDER OF THE TPO. BEFORE THE DRP, THE ASSESSEE MADE ELABORATE SUBMISSIONS AND RELIED UPON MANY CAS E LAWS. AFTER CONSIDERING THE AVAILABLE MATERIAL, THE DRP HELD THAT MOAIPL WAS NOT A VALID COMPARABLE TO BENCHMARK THE OF THE IT.S, THAT THE TPO WAS JUSTIFIED IN REJECTING ALL T HE COMPARABLE SELECTED BY THE ASSESSEE, THAT HE HAD RIGHTLY ADOPTED THE SINGLE YEAR DATA AS AGAI NST THE THREE YEARS DATA USED BY THE ASSESSEE, THAT THE COMPARABLES SELECTED BY THE ASSE SSEE WERE FUNCTIONALLY DIFFERENT. 5. DURING THE COURSE OF HEARING BEFORE US,THE UTHORIS ED REPRESENTATIVE(AR)STATED THAT THE DRP WAS NOT JUSTIFIED IN APPROVING THE REJECTION OF THE COMPARABLES SELECTED BY THE ASSESSEE, THAT IT HAD WRONGLY APPROVED TWO NEW COMPARABLES, T HAT THE NEW COMPARABLES WERE FUNCTIONALLY DIFFERENT FROM THE ASSESSEE,THAT COMPA RABLES SELECTED BY THE ASSESSEE WERE RENDERING THE SIMILAR SERVICES AS PROVIDED BY IT,TH AT THE TRIBUNAL HAD APPROVED THE COMPARABLES,SELECTED BY THE ASSESSEE, FOR BENCHMARK ING THE IT IS RELATED WITH NON-BINDING INVESTMENT ADVISORY SERVICES. HE RELIED UPON THE CA SE OF TEMASEK HOLDINGS ADVISERS INDIA PRIVATE LTD.(ITA/477/MUM/2016-AY.2011-12,DATED-11/0 8/2017). ITA/1520/M/16- WELLS FARGO REAL ESTATE ADVISORS PV T.LTD. 3 THE DEPARTMENTAL REPRESENTATIVE(DR)CONTENDED THAT I DC WAS A VALID COMPARABLE FOR SUPPORT SERVICE SYSTEM BUT NOT FOR THE NON-BINDING ADVISORY SERVICES,THAT INFORMED TECHNOLOGY WAS NOT IN THE BUSINESS OF PROVIDING NON -BINDING INVESTMENT ADVISORY SERVICES,THAT IT WAS PROVIDING ITE-S,(SN.15,LPB 1 P G 189),THAT ICRA WAS SHOWING FLUCTUATING PROFITS,THAT IT WAS RIGHTLY TAKEN OUT O F THE LIST OF VALID COMPARABLES,(SN.18,19 OF INDEX, PTC ALL SCRIPTS). ABOUT MOTILAL OSWAL PRIVAT E EQUITY ADVISERS INDIA PRIVATE LTD.AND LADDER THE DR STATED THAT BOTH WERE CARRYING OUT FU NCTIONS THAT WERE SIMILAR TO THE PARENT COMPANY OF THE ASSESSEE. 5.1. IN HIS REJOINDER THE AR STATED THAT IN THE AY.2009- 10 THERE WERE TWO ENTITIES I.E.IDC AND ICE(INDIA),THAT INDIA RESEARCH MEDIA WAS DIFFERENT FROM IDC INDIA,THAT CYBER MEDIA RESEARCH LTD WAS KNOWN AS IDC(INDIA)LTD.(PG.423 OF THE PB),THAT CYBER MEDIA(INDIA) LTD. WAS IN THE FIELDS OF MARKET RESEARCH AND MANAGEMENT CONSULTANCY,THAT PAGE 452 OF THE PB WAS ABOUT HOLDING COMPANY,THAT INFORMED TECHNOLOGY WAS ENGAGED IN ITE.S,THAT IT WAS ON THE SAME VERTICAL,THAT FLUCTUATION IN PROFIT WAS NO T TO BE SEEN,THAT PROFIT FLUCTUATION COULD NOT BE REASON FOR REJECTING ANY COMPARABLE,THAT FUNCTIO NAL COMPARABILITY WAS TO BE SEEN AND NOT THE PROFIT,THAT IN THE MATTER OF AGM ALL THE ARGUME NTS OF THE DR WERE CONSIDERED BY THE TRIBUNAL. HE REFERRED TO PAGES 423,451,821,823 AND 843 OF THE PAPER BOOK. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US.WE FIND THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF PROVIDING NO N BINDING ADVISORY SERVICES,THAT IT HAS USED TNMM TO DETERMINE THE ALP OF THE IT.S. ENTERED INTO BY IT WITH ITS AE.S.,THAT PLI SHOWN BY IT WAS OP/OC,THAT PROFIT MARGIN OF THE IT. S. FOR THE YEAR UNDER CONSIDERATION, ON THE BASIS OF DATA OF THREE AY.S,WAS 15.03%,THAT IT HAD SELECTED FOUR COMPARABLES ON SINGLE YEAR BASIS,THAT THE AVERAGE SHOWN BY THEM WAS 11.3%,THAT THE TPO REJECTED ALL THE COMPARABLES SELECTED BY THE ASSESSEE,THAT HE SELECTED THREE NEW COMPARABLES,THAT AVERAGE OF THE NEW COMPARABLES WAS 55.68% ,THAT THE AO MADE TP ADJUSTM ENT OF RS.4.89 CRORES TO THE TOTAL INCOME OF THE ASSESSEE,AS SUGGESTED BY THE TPO,THAT THE DRP UPHELD THE REJECTION OF THE COMPARABLES SELECTED BY THE ASSESSEE,THAT IT ALSO R EJECTED ONE OF THE COMPARABLES USED BY THE TPO,THAT THE MARGIN OF THE TWO COMPARABLES WAS 42.4 %,THAT IN PURSUANCE OF THE DIRECTIONS OF THE DRP THE AO MADE ADDITION OF RS.3.92 CRORES. 6.1. WE FIND THAT IN THE CASE OF TEMASEK HOLDING ADVISER S INDIA PRIVATE LTD (SUPRA),THE TRIBUNAL HAD DEALT WITH THE IDENTICAL FACTS,THAT TE MASEK WAS ALSO ENGAGED IN PROVIDING NON- BINDING INVESTMENT ADVISORY SERVICES TO ITS AE, THA T IT HAD SELECTED THE EIGHT COMPARABLES, INCLUDING THE SEVEN COMPARABLES SELECTED BY THE ASS ESSEE, FOR DETERMINING THE ALP OF THE ITA/1520/M/16- WELLS FARGO REAL ESTATE ADVISORS PV T.LTD. 4 IT.S, THAT OPERATING MARGIN WAS BASED ON MULTIPLE Y EARS, THAT SINGLE YEAR MARGIN FOR THE AY. UNDER CONSIDERATION WAS 13.53%, THAT THE TPO REJECT ED ALL THE COMPARABLES SELECTED BY THE ASSESSEE AND SUBSTITUTED BY A SET OF THREE NEW COMP ARABLES, THAT THE NEW COMPARABLES WERE THE SAME THAT WERE SELECTED BY THE TPO FOR THE MATT ER UNDER CONSIDERATION, THAT THE DRP CONFIRMED THE REJECTION MADE BY THE TPO OF THE COMP ARABLES SELECTED BY THE ASSESSEE, THAT IT HELD THAT MOIAPL WAS NOT A VALID COMPARABLE, THAT A FTER RECEIVING THE ORDER OF THE DRP,THE AO SCALED-DOWN THE TP ADJUSTMENT, THAT THE ASSESSEE OBJECTED TO EXCLUSION OF THE COMPARABLE SELECTED BY IT AS WELL AS INCLUSION OF TWO NEW COMP ARABLES, THAT THE REPRESENTATIVES OF BOTH THE SIDES MADE ALMOST IDENTICAL ARGUMENTS BEFORE US THAT WERE MADE IN THE CASE OF TEMASEK BEFORE THE TRIBUNAL,THAT THE TRIBUNAL DECIDED THE M ATTER IN FAVOUR OF THE ASSESSEE.WE WOULD LIKE TO REFER THE RELEVANT PORTION OF THE ORDER OF THE TRIBUNAL, DELIVERED IN THE CASE OF TEMASEK (SUPRA) AND IT READS AS UNDER: ( PARA 7-14). 7. THE LD. A.R HAD ASSAILED BEFORE US THE REJECTION O F THE COMPANIES SELECTED BY THE ASSESSEE AS COMPARABLES AND SUBSTITUTION OF THE SAME BY A SET O F 2 NEW COMPANIES, VIZ. M/S LADDER UP CORPORATE ADVISORY PVT. LTD. AND M/S MOTILAL OSWAL PVT. EQUIT Y ADVISORS PVT. LTD. BY THE TPO, WHICH AS OBSERVED BY US HEREINABOVE HAD BEEN UPHELD BY THE D RP. THAT AT THE VERY OUTSET IT WAS AVERRED BY THE LD. A.R THAT WITHOUT POINTING OUT ANY SUBSTANTIAL V ARIANCE EITHER AS REGARDS THE FUNCTIONALITY OR ANY OTHER FACTOR, THE COMPARABLES CANNOT BE SHIFTED ARB ITRARILY BY THE TPO IN DIFFERENT YEARS. THE LD. A.R RESTRICTING HIMSELF TO THE EXCLUSION OF TWO COMPANI ES SELECTED BY THE ASSESSEE AS COMPARABLE, VIZ. ICRA MANAGEMENT CONSULTANCY SERVICES LIMITED AND IN FORMED TECHNOLOGIES LIMITED, THEREIN SUBMITTED THAT IF THE EXCLUSION OF THE SAID COMPANI ES AS A COMPARABLE BY THE A.O/TPO IS SET ASIDE, THE N THE CASE OF THE ASSESSEE WOULD BE WITHIN THE SAFE H ARBOR OF (+)/(-) 5% PARAMETERS, AND IN THE BACKDROP OF THE SAID FACTUAL POSITION NO AVERRMENTS WOULD BE REQUIRED TO BE PLACED IN CONTEXT OF IDC INDIA LIMITED AND ICRA ONLINE LIMITED. 8 . THE LD. A.R ASSAILING THE REJECTION OF M/S. ICRA MANAGEMENT CONSULTANCY SERVICES LIMITED BY THE TPO, WHICH THEREAFTER HAD BEEN UPHELD BY THE DRP, THEREIN DREW OUR ATTENTION TO PAGE NO. 30 - PARA 4.12 OF THE ORDER OF THE DRP. IT WAS SUBMITTED BY THE L D. A.R THAT THE DRP HAD UPHELD THE REJECTION OF THE AFORESAID COMPARABLE BY THE TPO FO R THE REASON THAT HIS PREDECESSOR IN THE CASE OF TH E ASSESSEE FOR THE IMMEDIATELY PRECEDING YEAR, I.E A. Y. 2010-11, HAD UPHELD THE REJECTION OF THE SAID COMPARABLE BY THE TPO. IT WAS THUS SUBMITTED BY THE LD. A.R THAT THE UPHOLDING OF THE REJECTION OF THE AFORESAID COMPARABLE, VIZ. ICRA MANAGEMENT CONSULTA NCY SERVICES LIMITED DURING THE YEAR UNDER CONSIDERATION WAS ONLY SUPPORTED BY THE OBSERVATION S RECORDED BY THE DRP IN RESPECT OF THE SAID COMPARABLE IN THE CASE OF THE ASSESSEE FOR THE IMME DIATELY PRECEDING YEAR, VIZ. A.Y. 2010-11, AND NOT ON THE BASIS OF ANY NEW FACTS. THE LD. A.R REFERRIN G TO THE AFORESAID OBSERVATIONS OF THE DRP SUBMITTE D THAT THE ITAT, MUMBAI BENCH K , VIDE ITS ORDER PASSED IN THE CASE OF THE ASSESSEE , MARKED AS: TEMASEK HOLDING ADVISORS INDIA PRIVATE LIMITED VS. DCIT, CIRCLE 14(3)(1), MUMBAI, IN ITA NO. 776/MUMBAI OF 2015 FOR A.Y. 2010-11 , DATED 25.02.2016 , HAD CATEGORICALLY HELD THAT THE AFORESAID COMPARABLE, VIZ. ICRA MANAGEMENT CONSULTA NCY SERVICES LIMITED WAS A GOOD COMPARABLE QUA THE FUNCTIONS OF THE ASSESSEE, AND AS SUCH HAD DIRECTED THAT IT BE INCLUDED IN THE LIST OF THE FI NAL COMPARABLES. THE LD. A.R DREW OUR ATTENTION TO PAGE NO. 53 OF THE APB, WHEREIN THE TRIBUNAL WHILE DISPOSING OF THE APPEAL OF THE ASSESSEE FOR A.Y. 20 10-11 HAD OBSERVED AS UNDER:- HERE IT IS NOT THE CASE WHERE THERE IS ANY UNIQUE FUNCTIONS MATERIALLY AFFECTING THE REVENUE OR NET MARGINS VIS--VIS THE FUNCTIONS PERF ORMED BY ICRA. HENCE ON FUNCTIONAL LEVEL IT IS A GOOD COMPARABLE. AS STATED EARLIER, IN THE EARLIER YEARS, THE TPO HAS ACCEPTED ICRA TO BE A COMPARABLE AND IN LAT ER YEARS THE TRIBUNAL IN A.YS 2008-09 & 2009-10 HAS HELD ICRA MANAGEMENT TO BE GO OD COMPARABLE QUA THE FUNCTIONS OF THE ASSESSEE AND THERE BEING NO MATERI AL CHANGE ON FACTS, FUNCTIONAL ITA/1520/M/16- WELLS FARGO REAL ESTATE ADVISORS PV T.LTD. 5 PROFILE OR ANY OTHER FACTOR IN THIS YEAR, THEN AS MATTER OF CONSISTENCY, WE DO NOT WANT TO DEVIATE FROM OUR FINDINGS GIVEN IN THE EARL IER YEARS. THERE CANNOT BE A PICK AND CHOOSE OF COMPARABLES EVERY YEAR UNLESS THERE A RE SOME MATERIAL DIFFERENCE IN FACTS AND CIRCUMSTANCES COMPELLING TO TAKE A DIFFER ENT CONCLUSION. THUS, WE HOLD THAT ICRA MANAGEMENT IS A GOOD COMPARABLE AND SHOULD BE INCLUDED IN THE LIST OF FINAL COMPARABLES. IT WAS FURTHER SUBMITTED BY THE LD. A.R THAT IN THE EARLIER YEARS THE TPO HAD HIMSELF ACCEPTED ICRA MANAGEMENT CONSULTANCY SERVICES LIMITED AS A COMPAR ABLE, WHILE FOR IN THE LATER YEARS, VIZ. A.Y. 2008-09 AND 2009-10 THE TRIBUNAL HAD HELD THE AFORE SAID COMPANY TO BE A GOOD COMPARABLE. THE LD. A.R IN SUPPORT OF HIS AFORESAID CONTENTION THEREIN DREW OUR ATTENTION TO THE OBSERVATIONS OF THE COORDINATE BENCH OF THE TRIBUNAL RECORDED IN THE CA SE OF THE ASSESSEE FOR A.Y. 2007-08 AND 2008-09, REPORTED AS TEMASEK HOLDING ADVISORS (I) PRIVATE LIMITED VS. DC IT 3(3), MUMBAI (2013) 38 TAXMANN.COM 80 (MUMBAI-TRIB), DATED 30.08.2013 (PAGE 26 OF APB), AND THE ORDER PASSED BY THE TRIBUNAL WHILE DISPOSING OF THE APPEAL OF THE REVEN UE, REPORTED AS DCIT, CIRCLE 3(3), MUMBAI VS. TEMASEK HOLDING ADVISORS PRIVATE LIMITED (2014) 47 TAXAMANN.COM 311(MUMBAI-TRIB) (PAGE NO. 32-33 OF APB). IT WAS THUS IN THE BACKDROP OF THE AFOR ESAID FACTUAL POSITION AVERRED BY THE LD. A.R THAT THE A.O/TPO WITHOUT PLACING ON RECORD ANY MATERIAL WHICH COULD GO TO PROVE THAT THE AFORESAID COMPARABLE ,VIZ. ICRA MANAGEMENT CONSULTA NCY SERVICES LIMITED DURING THE YEAR UNDER CONSIDERATION WAS FOUND TO BE EITHER FUNCTIONALLY O R OTHERWISE AT VARIANCE, AS IN COMPARISON TO THE PRECEDING YEARS, THUS WERE NOT JUSTIFIED IN MOST AR BITRARILY EXCLUDING IT FROM THE FINAL LIST OF THE COMPARABLES. THE LD. A.R FURTHER REFERRING TO PAGE 10 OF THE ORDER OF THE TPO FOR THE YEAR UNDER CONSIDERATION THEREIN SUBMITTED THAT THE FUNCTIONS PERFORMED, ASSETS USED AND RISK TAKEN (FAR) OF TH E AFORESAID COMPARABLE AS AGAINST THAT OF THE ASSESSE E COMPANY DURING THE YEAR UNDER CONSIDERATION WAS CONCEDEDLY THE SAME AS IN THE A.Y. 2010-11, AND DRE W OUR ATTENTION TO PAGE 9-10 OF THE TPO ORDER FOR THE AFORESAID PRECEDING YEAR, I.E A.Y. 2010-11 (COP Y PLACED ON RECORD). IT WAS THUS SUBMITTED BY THE L D. A.R THAT NOW WHEN THE FACTS INVOLVED IN CONTEXT OF THE AFORESAID COMPARABLE DURING THE YEAR UNDER CONSIDERATION WERE THE SAME AS AGAINST THOSE OF THE IMMEDIATELY PRECEDING YEAR, VIZ. A.Y. 2010-11, WHEREIN THE SAID COMPANY HAD BEEN ACCEPTED BY THE T RIBUNAL AS A GOOD COMPARABLE, COUPLED WITH THE FACT THAT EVEN IN THE PRECEDING YEARS ALSO IT WAS A CCEPTED AS A COMPARABLE, THEREFORE, IN THE ABSENCE OF ANY SUBSTANTIAL VARIANCE, EITHER FUNCTIONALLY OR OTHERWISE DURING THE YEAR UNDER CONSIDERATION, THE SAID COMPARABLE COULD NOT BE SUMMARILY REJECTED. THE LD. A.R FURTHER SUBMITTED THAT THE ORDER OF THE ITAT, MUMBAI IN THE CASE OF THE ASSESSEE FOR A.Y. 2008-09 WHEREIN ICRA MANAGEMENT CONSULTANCY SERVICES LIMITED WAS HELD TO BE A GOOD COMPARABLE, HAD BEEN UPHELD BY THE HONBLE HIGH COURT OF BOMBAY IN CIT-3 VS. TAEMASK HOLDINGS ADVISORS PVT. LTD (I TA NO. 1051 0F 2014); DT. 17.11.2016, AND PLACED ON RECORD A COPY OF THE ORDER OF THE HON BLE HIGH COURT. IT WAS FURTHER AVERRED BY THE LD. A.R THAT THE ITAT, MUMBAI BENCH K, IN THE CASE OF AGM INDIA ADVISORS (P) LTD. VS. DCIT, 10(1), MUMBAI (2016) 70 TAXMANN.COM 219 (MUM) , HAD HELD ICRA MANAGEMENT CONSULTANCY SERVICES LIMITED AS A GOOD COMPARABLE, SPECIFICALLY TAKING NOTE OF THE FACT THAT IT WAS ACCEPTED AS SUCH BY THE TPO IN THE EARLIER YEAR AS WELL AS IN THE SUCCEEDING YEAR. IT WAS AVERRED BY T HE LD. A.R THAT THE TRIBUNAL IN THE CASE OF AGM INDIA ADVISORS (P) LTD. (SUPRA) HAD ACCEPTED ICRA MANAGEMENT CONSULTANCY SERVICES LIMITED AS A GOOD C OMPARABLE, AFTER DELIBERATING ON THREE ISSUES, VIZ. (I). SKILL TESTS (II). FUNCTIONAL COMPARABILIT Y AND (III). CONSISTENCY. THE LD. A.R REFERRING TO THE JUDGMENT OF THE HONBLE HIGH COURT OF DELHI IN THE CASE OF RAMPGREEN SOLUTION P. LTD. , THEREIN TOOK US THROUGH PARA 31 OF THE ORDER OF THE HONBLE HIGH COURT, AND SUBMI TTED THAT IT WAS HELD BY THE HIGH COURT THAT A BROAD COMPARABILITY ON INDUSTRY B ASE WAS NOT TO BE PERMITTED, AND AS SUCH HIGH END AND LOW END CANNOT BE COMPARED. THE LD. A.R TOOK US THROUGH THE RELEVANT EXTRACTS OF THE ORDER PASSED BY THE TRIBUNAL IN ITS CASE FOR A.Y. 2010-11, AND T HEREIN AVERRED THAT THE TRIBUNAL AFTER DELIBERATING AT LENGTH HAD HELD ICRA MANAGEMENT CONSULTANCY SERVICE S LIMITED AS FUNCTIONALLY COMPARABLE. IT WAS SUBMITTED BY THE LD. A.R THAT THERE CANNOT BE CHERR Y PICKING OF COMPARABLES, AND UNLESS SOME MATERIAL DIFFERENCE HAD ARISEN DURING THE YEAR UNDER CONSIDE RATION AS IN COMPARISON TO THE EARLIER YEAR, THE SA ME COULD NOT BE WHIMSICALLY REJECTED AS A COMPARABLE. THE LD. A.R AVERRED THAT A FRESH FILTER CANNOT BE INTRODUCED FOR THE FIRST TIME BEFORE THE TRIBUNAL, BECAUSE IF THAT BE PERMITTED, THEN ALL THE COMPARAB LES PUT UP BY THE TPO WILL BE LIABLE TO BE EXCLUDED. IT WAS LASTLY SUBMITTED BY THE LD. A.R THAT NOW WHEN THE FUNCTIONAL COMPARABILITY OF ICRA MANAGEMENT CON SULTANCY SERVICES LIMITED HAD DULY BEEN APPRECIATED BY THE TRIBUNAL IN THE CASE OF THE ASSE SSEE IN THE EARLIER YEARS, THEN IN THE BACKDROP OF THE PRINCIPLE OF CONSISTENCY, A DIFFERENT VIEW ON THE SAME SET OF FUNCTIONAL PROFILE CANNOT BE DRAWN. PER CONTRA, LD. DEPARTMENTAL REPRESENTATIVE (FOR SHORT D.R) IN ORDER TO DRIVE HOME HIS CONTENTION THAT ICRA MANAGEMENT CONSULTANCY SERVICES LIMITED COULD NOT BE ACCEPTED AS A COMPARABLE, THEREIN RELIED ON THE ORDER OF THE ITAT, DELHI IN THE CASE OF MOTOROLA SOLUTION INDIA (P) LTD. VS. ACIT, ITA/1520/M/16- WELLS FARGO REAL ESTATE ADVISORS PV T.LTD. 6 CIRCLE-2 (2014) 48 TAXMANN.COM 248 (DELHI-TRIB) , AND TOOK US THROUGH PARA 143-145 OF THE ORDER. THE LD. D.R FURTHER PLACED RELIANCE ON THE ORDER OF THE ITAT, MUMBAI K BENCH IN THE CASE OF : MAERSK GLOBAL CENTRES (INDIA)(P). LTD. VS. ACIT ( 2014) 43 TAXMANN. COM. 100 (MUMBAI TRIB) . THE LD. D.R DURING THE COURSE OF HEARING OF THE A PPEAL AVERRED THAT FOR THE PURPOSE OF ADJUDICATING THE PRESENT APPEAL OF THE ASSESSEE, TH E EARLIER ORDERS PASSED BY THE TRIBUNAL IN THE ASSE SSES OWN CASE CANNOT BE CHARACTERIZED AS A PRECEDENT. TH E LD. D.R IN ORDER TO DRIVE HOME HIS AFORESAID CONTENTION, RELIED ON THE FOLLOWING JUDGMENTS OF TH E HONBLE SUPREME COURT :- (I) DALBIR SINGH & OTHERS VS. STATE OF PUNJAB (1979) 3 SCC 745 (II). KTMTM ABDUL KAYOOM & ANR VS. CIT (1962) SUPP (1) SCR 518 (III). FIDA HUSSAIN & OTHERS VS. MORADABAD D EV. AUTHORITY (2011) 12 SCC 615 (IV). EXECUTIVE ENGINEER, DHENKANAL MINOR IRR IGATION VS. N.C BUDHIRAJA (2001) 2 SCC 721 THE LD. D.R THUS ON THE BASIS OF MATERIAL PLACED ON RECORD, THEREIN SUBMITTED THAT ICRA MANAGEMENT CONSULTANCY SERVICES LIMITED COULD NOT BE ACCEPTED AS A COMPARABLE AND HAD RIGHTLY BEEN EXCLUDED BY THE TPO AND UPHELD BY THE DRP. 9. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES F OR BOTH THE PARTIES, PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL PLACED ON RE CORD. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE FACTS OF THE CASE AND FIND THAT THE DRP AS A MA TTER OF FACT RELYING ON THE ORDER PASSED BY HIS PREDECESSOR IN THE CASE OF THE ASSESSEE FOR A.Y. 20 10-11, WHEREIN THE REJECTION OF THE AFORESAID COMPARABLE, VIZ. ICRA MANAGEMENT CONSULTANCY SERVIC ES LIMITED BY THE TPO WAS UPHELD BY HIS PREDECESSOR, HAD MERELY GONE BY THE SAID VERY REASO N AND UPHELD THE REJECTION OF THE SAID COMPARABLE DURING THE YEAR UNDER CONSIDERATION. WE FIND THAT T HE REJECTION OF THE AFORESAID COMPARABLE BY THE AO/TPO IN A.Y. 2010-11 HAD BEEN SET ASIDE BY THE TR IBUNAL IN THE CASE OF THE ASSESSEE, REPORTED AS TEMASEK HOLDING ADVISORS INDIA PRIVATE LIMITED VS. DCIT, CIRCLE 14(3)(1), MUMBAI, VIDE ORDER DATED 25.02.2016 , WHEREIN THE TRIBUNAL HAD CATEGORICALLY HELD THAT THE AFORESAID COMPANY, VIZ. ICRA MANAGEMENT CONSULTANCY SERVICES LIMITED WAS A GOOD COMPARABLE AND HAD DIRECTED THE INCLUSION OF THE SAME IN THE LIST OF THE FINAL COMPARABLES. WE A RE OF THE CONSIDERED VIEW THAT NOW WHEN THE ORDER O F THE AO/TPO IN THE CASE OF THE ASSESSEE FOR THE IMME DIATELY PRECEDING YEAR, VIZ. A.Y. 2010-11, THEREIN EXCLUDING THE AFORESAID COMPARABLE, VIZ. ICRA MANAG EMENT CONSULTANCY SERVICES LIMITED HAD BEEN SET ASIDE BY THE TRIBUNAL, THEREFORE, THE REJECTION OF THE SAID COMPARABLE, VIZ. ICRA MANAGEMENT CONSULTANCY SERVICES LIMITED BY THE A.O DURING THE YEAR UNDER CONSIDERATION, PURSUANT TO THE DIRECTION OF THE DRP, WHO HAD MERELY ADOPTED THE OBSERVATIONS OF HIS PREDECESSOR ON A.Y. 2010-11, THUS CANNOT BE UPHELD AND IS LIABLE TO BE VACATED ON THE SAID C OUNT ITSELF. WE ARE FURTHER PERSUADED TO SUBSCRIBE TO THE CONTENTION OF THE LD. A.R THAT CHERRY PICKING O F THE COMPARABLES EVERY YEAR BY THE TPO, WITHOUT POINTING OUT THAT THE FACTS IN CONTEXT OF THE COMPA RABLES ACCEPTED IN THE PRECEDING YEARS HAD CHANGED DURING THE YEAR UNDER CONSIDERATION, CANNOT BE PERM ITTED. WE FURTHER FIND THAT THE AFORESAID COMPARABLE, VIZ. ICRA MANAGEMENT CONSULTANCY SERVIC ES LIMITED HAD ALSO BEEN HELD TO BE A GOOD COMPARABLE BY THE TRIBUNAL IN THE CASE OF THE ASSES SEE FOR A.Y(S). 2007-08, 2008-09 AND 2009-10, WHILE FOR IN THE EARLIER YEARS THE TPO HIMSELF HAD ACCEPTED THE SAID COMPANY AS A COMPARABLE. WE FURTHER FIND THAT THE ORDER OF THE ITAT, MUMBAI IN THE CASE OF THE ASSESSEE FOR A.Y. 2008-09 WHEREIN ICRA MANAGEMENT CONSULTANCY SERVICES LIMITED WAS HE LD TO BE A GOOD COMPARABLE, HAD BEEN UPHELD BY THE HONBLE HIGH COURT OF BOMBAY IN CIT-3 VS. TAEMASK HOLDINGS ADVISORS PVT. LTD (IT A NO. 1051 0F 2014); DT. 17.11.2016. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE CO NTENTIONS OF THE LD. D.R AND ARE NOT PERSUADED TO ACCEPT HIS CONTENT ION THAT ICRA MANAGEMENT CONSULTANCY SERVICES LIMITED WAS FUNCTIONALLY DIFFERENT AS IN COMPARISON TO THE ASSESSEE BEFORE US. WE HAVE DELIBERATED ON THE JUDGMENTS OF THE HONBLE APEX COURT AND FIND THAT IT HAS BEEN HELD THAT A DECISION OF T HIS COURT ON SPECIFIC FACTS DOES NOT OPERATE AS A PRECEDENT FOR FUTURE CASES. WE ARE OF THE CONSIDERED VIEW THAT TH ERE CANNOT BE A SECOND VIEW ON THE SAID ASPECT, BUT THE N, AS HELD BY THE HONBLE APEX COURT, IF THE COURT DECIDES A CERTAIN ISSUE FOR A CERTAIN SET OF FACTS, THEN, THAT ISSUE STANDS DETERMINED FOR ANY OTHER M ATTER ON THE SAME SET OF FACTS . WE ARE OF THE CONSIDERED VIEW THAT NOW WHEN THE L D. D.R HAD FAILED TO ESTABLISH AS TO HOW THE FACTS INVOLVED IN THE PRESE NT CASE ARE FOUND TO BE DISTINGUISHABLE IN CONTEXT OF THE AFORESAID COMPARABLE, VIZ. ICRA MANAGEMENT CONS ULTANCY SERVICES LIMITED OR THE ASSESSEE IN THE YEAR BEFORE US, AS IN COMPARISON TO THOSE OF THE PR ECEDING YEARS, THEREFORE, THE PRINCIPLE ENUNCIATED BY THE HONBLE APEX COURT IN THE AFORESAID CASES WOULD NOT ASSIST THE CASE OF THE DEPARTMENT. WE RATHER ITA/1520/M/16- WELLS FARGO REAL ESTATE ADVISORS PV T.LTD. 7 ARE OF THE CONSIDERED VIEW THAT NOW WHEN THE FACTS IN RESPECT OF THE ASSESSEE OR THE COMPARABLES HAVE NOT WITNESSED ANY CHANGE DURING THE YEAR UNDER CONS IDERATION, AS IN COMPARISON TO THE EARLIER YEARS, THEREFORE, THE AFORESAID PRINCIPLE SO LAID DOWN BY THE HONBLE SUPREME COURT WOULD GO TO SUPPORT THE CONTENTION OF THE ASSESSEE THAT IN CASE OF NO CHANG E IN THE FUNCTIONAL PROFILE OF THE ASSESSEE OR ICRA MANAGEMENT CONSULTANCY SERVICES LIMITED, THE LATTER CANNOT BE REJECTED AS A COMPARABLE DURING THE YEAR UNDER CONSIDERATION. WE THUS IN THE BACKDROP OF OUR AFORESAID OBSERVATIONS ARE OF THE CONSIDERED VIEW THAT NOW WHEN ICRA MANAGEMENT CONSULTANCY SERV ICES LIMITED HAD BEEN HELD TO BE A GOOD COMPARABLE IN THE CASE OF THE ASSESSEE FOR THE PREC EDING YEARS BY THE TRIBUNAL, AND THE ORDER OF THE TRIBUNAL FOR A.Y. 2008-09 HAD EVEN BEEN UPHELD BY THE HONBLE HIGH COURT OF BOMBAY WHILE DISMISSING THE APPEAL OF THE DEPARTMENT FOR A.Y. 20 08-09, THEREFORE, WE ARE NOT PERSUADED TO ACCEPT TH E AFORESAID CONTENTIONS OF THE LD. D.R. THUS IN THE T OTALITY OF THE AFORESAID FACTS, WE ARE OF THE CONSI DERED VIEW THAT THERE IS NO REASON FOR US TO TAKE A VIEW DIVERGENT FROM THAT ARRIVED AT BY THE TRIBUNAL IN T HE CASE OF THE ASSESSEE FOR THE PRECEDING YEARS, AND T HUS SET ASIDE THE ORDER OF THE AO/TPO REJECTING THE AFORESAID COMPARABLE AND DIRECT THAT THE SAME BE IN CLUDED IN THE FINAL LIST OF THE COMPARABLES. 10. THE LD. A.R ASSAILING THE REJECTION BY THE AO/TPO OF M/S. INFORMED TECHNOLOGIES LIMITED WHICH WAS SELECTED BY THE ASSESSEE COMPANY AS A COM PARABLE, THEREIN DREW OUR ATTENTION TO PAGE 13 OF THE ORDER OF THE TPO. IT WAS SUBMITTED BY THE LD. A .R THAT THE TPO BEING OF THE VIEW THAT AS THE AFORESAID COMPARABLE HAD RECEIVED DATA OUTSOURCING CHARGES, I.E BPO INCOME OF RS.1.75 CRORE AND WAS REGISTERED WITH SOFTWARE TECHNOLOGY PARK INDIA (STP I), THUS IT WAS FUNCTIONALLY NOT COMPARABLE WITH THE ASSESSEE COMPANY. IT WAS SUBMITTED BY THE LD. A .R THAT THE TPO HOLDING A CONVICTION THAT THE SERVICES OF THE AFORESAID COMPARABLE, AS GATHERED F ROM THE ANNUAL REPORT, WAS AS THAT OF A BPO, BUT UNLIKE THE INDUSTRY WHICH WITNESSED GROWTH YEAR TO YEAR, THE INCOME OF THE AFORESAID COMPARABLE HAD WITNESSED A DOWNSLIDE, THUS DOUBTED THE VERACITY O F THE STATE OF AFFAIRS OF THE SAID COMPARABLE AND H AD EXCLUDED THE SAME FROM THE FINAL LIST OF THE COMPAR ABLES. IN THE BACKDROP OF THE AFORESAID FACTS IT WA S SUBMITTED BY THE LD. A.R THAT THE AFORESAID COMPARA BLE, VIZ. INFORMED TECHNOLOGIES LIMITED WAS ENGAGED IN OFFERING A RANGE OF DATA MANAGEMENT SERV ICES TO THE FINANCIAL SECTOR, I.E DATA BASED DEVELOPMENT AND DATA VALIDATION AND MAINTENANCE SER VICES. IT WAS SUBMITTED BY THE LD. A.R THAT THE ANNUAL REPORT OF THE AFORESAID COMPARABLE INDICAT ED THAT IT COLLECTED AND ANALYZED DATA ON FINANCIAL FUNDAMENTALS, CORPORATE GOVERNANCE, DIRECTOR/EXECUT IVE COMPENSATION AND CAPITAL MARKET, WHICH CAN BE COMPARED TO THE FUNCTIONS PERFORMED BY THE ASSESSEE . THE ASSESSEE SUBMITTED BEFORE THE DRP THAT DECLINING TURNOVER FILTER MAY BE APPROPRIATE IN S CALE BASED OPERATIONS RATHER THAN IN A SERVICE ENTI TY, AS IN THE LATTER CASE THE MARGINS ARE NOT DEPENDENT ON THE SCALE OR SIZE OF OPERATIONS. IT WAS SUBMITT ED BY THE ASSESSEE THAT A DECLINING TURNOVER FILTER WOULD NOT ALWAYS INCREASE THE RELIABILITY OF AN ANA LYSIS AND HENCE SHOULD NOT BE CONSIDERED AS A FACTOR IMPA CTING PROFITABILITY AND COMPARABILITY. THE LD. A.R SUBMITTED BEFORE US THAT THE TPO IN HIS ORDER PASSE D IN THE CASE OF THE ASSESSEE FOR A.Y. 2009-10 AND A.Y. 2010-11 HAD CONSIDERED THE AFORESAID COMPANY, VIZ. INFORMED TECHNOLOGIES LIMITED AS A COMPARABLE TO THE FUNCTIONS PERFORMED BY THE ASSESS EE. IT WAS THUS AVERRED BY THE LD. A.R THAT NOW WHEN IT REMAINS AS A MATTER OF FACT THAT THE AFORES AID COMPANY, VIZ. INFORMED TECHNOLOGIES LIMITED WAS FUNCTIONALLY COMPARABLE, AND DURING THE YEAR UN DER CONSIDERATION THE FUNCTIONS PERFORMED BY IT WERE SIMILAR TO THOSE IN A.Y. 2010-11 AND 2009-10, THEREFORE, THE SAME COULD NOT BE WHIMSICALLY EXCLUDED BY THE TPO AS A COMPARABLE DURING THE YEAR UNDER CONSIDERATION. THE LD. A.R IN ORDER TO SUBSTANTIATE HIS AFORESAID CONTENTION PLACED ON REC ORD THE ANNUAL REPORT ALONG WITH THE FINANCIAL STATEMENTS OF THE AFORESAID COMPARABLE, VIZ. INFORM ED TECHNOLOGY INDIA PVT. LTD. FOR THE IMMEDIATELY PRECEDING YEAR, I.E A.Y. 2010-11. THAT ON THE OTHER HAND THE LD. D.R DRAWING OUR ATTENTION TO THE ORDE R OF THE TPO AND THE ANNUAL REPORT OF THE AFORESAID COMPARABLE FOR THE YEAR UNDER CONSIDERATION (PAGE 262 ), THEREIN AVERRED THAT AS THE SAID COMPARABLE UNLI KE THE ASSESSEE WAS A BPO AND NOT INTO THE INVESTMENT ADVISORY BUSINESS, THEREFORE, THE SAME WAS FUNCTIONALLY INCOMPARABLE AND HAD RIGHTLY BEEN REJECTED BY THE TPO. THE LD. D.R IN ORDER TO F ORTIFY HIS AFORESAID CONTENTION, THEREIN SUBMITTED THAT AS STOOD GATHERED FROM THE FINANCIAL STATEMEN TS OF THE AFORESAID COMPARABLE (PAGE 253 OF APB), THE LATTER UNLIKE THE ASSESSEE HAD PAID A HEFTY SAL ARY AGGREGATING TO RS. 63,64,818/- DURING THE YEAR UNDER CONSIDERATION. THUS IN THE TOTALITY OF THE CO NTENTIONS RAISED BEFORE US AND AFTER REFERRING TO T HE MATERIAL PLACED ON OUR RECORD, IT WAS SUBMITTED BY THE LD. D.R THAT THE AFORESAID COMPARABLE WAS FUNCTIONALLY DIFFERENT, AND HAD RIGHTLY BEEN EXCLUD ED BY THE TPO FROM THE FINAL LIST OF THE COMPARABLE S. 11. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES F OR BOTH THE PARTIES, PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL PRODUCED BEF ORE US. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE FACTS OF THE CASE AND FIND THAT IN THE CASE OF THE ASSESSEE FOR THE IMMEDIATELY PRECEDING YEAR, I. E A.Y. 2010-11, THE AFORESAID COMPARABLE HAD BEEN ACC EPTED BY THE TPO AS A GOOD COMPARABLE, AND WAS CONSEQUENTLY INCLUDED IN THE FINAL LIST OF COMPARAB LES. WE FIND OURSELVES TO BE IN AGREEMENT WITH THE ITA/1520/M/16- WELLS FARGO REAL ESTATE ADVISORS PV T.LTD. 8 CONTENTION OF THE LD. A.R THAT NOW WHEN THE AFORESA ID COMPARABLE HAD BEEN ACCEPTED BY THE TPO IN THE IMMEDIATELY PRECEDING YEAR, I.E A.Y. 2010-11, T HEREFORE, WITHOUT POINTING OUT ANY SUBSTANTIAL VARIANCE, EITHER FUNCTIONALLY OR OTHERWISE, IT WOUL D BE ABSOLUTELY IMPERMISSIBLE ON THE PART OF THE TPO TO WHIMSICALLY REJECT THE SAID COMPARABLE DURING TH E YEAR UNDER CONSIDERATION. WE ARE FURTHER PERSUADED TO SUBSCRIBE TO THE CONTENTION OF THE LD. A.R THAT THOUGH DECLINING TURNOVER FILTER MAY BE APPROPRIATE IN SCALE BASED OPERATIONS, BUT THE SAME CANNOT BE APPLIED TO THE EXCLUSION OF THE OTHER RELEVANT FACTORS FOR DRAWING OF ADVERSE INFERENCES IN THE CASE OF A SERVICE ENTITY, AS MARGINS IN THE LATTER CASE ARE NOT DEPENDENT ON THE SCALE OR SIZE OF OPER ATIONS. THUS IN THE BACKDROP OF OUR AFORESAID OBSERVATIONS, WE ARE OF THE CONSIDERED VIEW THAT NO W WHEN THE COMPARABLE, VIZ. INFORMED TECHNOLOGIES LIMITED HAD BEEN CONSIDERED AS A GOOD COMPARABLE QUA THE FUNCTIONS PERFORMED BY THE ASSESSEE IN A.Y. 2009-10 AND A.Y. 2010-11, THEREFOR E, IN THE ABSENCE OF ANY MATERIAL CHANGE, THERE IS NO REASON AS TO WHY THE SAME IS TO BE REJECTED AS A COMPARABLE DURING THE YEAR UNDER CONSIDERATION. WE THUS IN THE BACKDROP OF OUR AFORESAID OBSERVATIONS ARE NOT PERSUADED TO SUBSCRIBE TO THE CONTENTIONS O F THE LD. D.R WHO HAD TRIED TO IMPRESS UPON US THAT I N LIGHT OF CERTAIN FACTS IN RESPECT OF THE AFORESAI D COMPARABLE, WHICH WERE NOT THERE BEFORE THE TRIBUNA L IN THE PRECEDING YEARS, IT COULD SAFELY BE CONCLUDED THAT THE SAME WAS FUNCTIONALLY DIFFERENT AS IN COMPARISON TO THE ASSESSEE. WE THUS ARE OF TH E CONSIDERED VIEW THAT THE AFORESAID COMPARABLE, VIZ. INFORMED TECHNOLOGIES LIMITED HAD RIGHTLY BEEN SELECTED BY THE ASSESSEE AS A COMPARABLE, THEREFORE , SET ASIDE THE ORDER OF THE AO/TPO AND DIRECT THAT THE SAME BE INCLUDED IN THE FINAL LIST OF THE COMPA RABLES. 12. WE NOW ADVERT TO THE NEW COMPARABLES WHICH HAD BEE N INCLUDED BY THE TPO IN THE FINAL LIST OF COMPARABLES. THE LD. A.R STRONGLY ASSAILING THE INCLUSION OF M/S. LADDERUP CORPORATE ADVISORY PRIVATE LIMITED AS A COMPARABLE BY THE TPO, WHICH T HEREAFTER HAD BEEN UPHELD BY THE DRP, THEREIN SUBMITTED THAT THE AFORESAID COMPANY WAS FUNCTIONAL LY NOT COMPARABLE AND HAD WRONGLY BEEN INCLUDED BY THE TPO IN THE FINAL SET OF COMPARABLES. THE LD. A.R DREW OUR ATTENTION TO THE PROFIT AND LOSS ACCOUNT OF THE SAID COMPARABLE (PAGE 322 OF APB) AND THE SCHEDULE FORMING PART OF THE SAM E (PAGE 329 ), WHICH REVEALED THAT THE MAIN SOURCE OF THE SAID COMPARABLE WAS BY WAY OF FINANCIAL AND MANAGEMENT CONSULTANCY FEES, AND THUS WAS ENTIRELY DIFFERENT FROM THE ACTIVITIES OF THE ASSESSEE COMPANY WHICH WAS NOT INTO THE BUSINESS OF MANAGING ANYBODYS FINANCES. THE LD. A.R FURTHER DREW OUR ATTENTION TO THE CASH FLOW STATEMENT OF THE A FORESAID COMPARABLE FOR THE YEAR UNDER CONSIDERATIO N (PAGE 323 ), SCHEDULE 16 WHICH FORMED PART OF THE ACCOUNTS FOR THE YEAR (PAGE 330 ) AND SEGMENT INFORMATION (PAGE 334 ), WHICH THEREIN DID GO TO FORTIFY THE CLAIM OF THE ASSESSEE THAT THE AFORESAID COMPARABLE WAS INTO FINANCIAL AND MANAGEMENT CONSU LTANCY. THE LD. A.R FURTHER REFERRING TO THE COMPANIES GENERAL BUSINESS PROFILE (PAGE 338 ) THEREIN SUBMITTED THAT THE AFORESAID COMAPARABLE, VIZ. M/S. LADDERUP CORPORATE ADVISORY PRIVATE LIMITED, U NLIKE THE ASSESSEE COMPANY WAS ENGAGED IN THE BUSINESS OF FINANCIAL AND MANAGEMENT CONSULTANCY. THE LD. A.R FURTHER DREW OUR ATTENTION TO THE INFORMATION ABOUT THE AFORESAID COMPARABLE AS HAD B EEN DOWNLOADED ON 12.03.2014 FROM ITS AFORESAID SITE, VIZ. WWW.LADDERUP.COM/ABOUT-LADDERUP.HTM (PAGE 340 ), WHICH REVEALED THAT THE SAID COMPARABLE, VIZ. LADDERUP CORPORATE ADVISORY PRIVATE LIMITED WA S FORMED IN 2007 AS A SUBSIDIARY COMPANY OF M/S. LADDERUP FINANCE LIMITED, AND WAS ENGAGED IN T HE BUSINESS OF INVESTMENT BANKING. IT WAS SUBMITTED BY THE LD. A.R THAT THE AFORESAID DOWNLOA DED EXTRACT REVEALED THAT THE SAID COMPARABLE WAS FORMED AS A SEPARATE GROUP ENTITY OFFERING INVESTME NT BANKING, CORPORATE FINANCE AND CORPORATE ADVISORY SERVICES. THUS IN THE BACKDROP OF THE AFO RESAID FACTUAL MATRIX, IT WAS SUBMITTED BY THE LD. A.R THAT IT STOOD REVEALED BEYOND ANY SCOPE OF DOUBT T HAT THE AFORESAID COMPARABLE, VIZ. M/S. LADDERUP CORPORATE ADVISORY PRIVATE LIMITED WAS INTO INVEST MENT BANKING BUSINESS, WHICH BY NO MEANS COULD BE COMPARED WITH THE INVESTMENT ADVISORY BUSINESS AS THAT OF THE ASSESSEE COMPANY. THE LD. A.R RELYING ON THE ORDER OF THE TRIBUNAL SO PASSED IN T HE CASE OF GENERAL ATLANTIC (P) LIMITED VS. DCIT, CIRCLE 3(1), MUMBAI (2013) 32 TAXMANN.COM 178 (MUMB AI TRIB) (PAGE 85-97 OF APB), WHICH THEREAFTER HAD BEEN AFFIRMED BY THE HONBLE HIGH COURT OF BOMBAY IN THE CASE OF CIT-3, MUMBAI VS. GENERAL ATLANTIC (P) LIMITED. (2016) 68 TAXMAN N.COM 88 (PAGE 98-101 OF APB), THEREIN SUBMITTED THAT PURSUANT TO THE AFORESAID JUDGMENT O F THE HONBLE JURISDICTIONAL HIGH COURT , THE ISSUE THAT AN INVESTMENT ADVISOR CANNOT BE COMPARED TO A MERCHANT BANKER IS NO MORE RES-INTEGRA. IT WAS THUS SUBMITTED BY THE LD. A.R THAT NOW WHEN THE AFO RESAID COMPARABLE, VIZ. M/S LADDERUP CORPORATE ADVISORY PRIVATE LIMITED WAS FUNCTIONALLY DIFFERENT AS IN COMPARISON TO THE ASSESSEE COMPANY, THEREFORE, IT COULD BY NO MEANS BE ADOPTED AS A COM PARABLE AND THUS WAS LIABLE TO BE EXCLUDED FROM THE FINAL LIST OF THE COMPARABLES. THAT ON THE OTHER HA ND THE LD. D.R SUBMITTED THAT AS PER THE ANNUAL REPORT OF THE AFORESAID COMPARABLE, THE LATTER WAS IN THE BUSINESS OF CORPORATE ADVISORY SERVICES AND HAD RECEIVED ADVISORY FEES. IT WAS SUBMITTED BY THE LD. D.R THAT THE AFORESAID COMPARABLE, VIZ. LADDERUP CORPORATE ADVISORY SERVICES LIMITED HAD RE CEIVED MERCHANT BANKING REGISTRATION IN THE MONTH OF JULY, 2010 FROM SEBI, BUT NO ACTUAL INCOME WAS RECEIVED FROM THE SAID ACTIVITY. THUS IN THE ITA/1520/M/16- WELLS FARGO REAL ESTATE ADVISORS PV T.LTD. 9 BACKDROP OF THE AFORESAID FACTS IT WAS SUBMITTED B Y THE LD. D.R THAT THE AFORESAID COMPARABLE WAS DERIVING INCOME ONLY FROM ADVISORY SERVICES, AND AS SUCH IF THE FUNCTIONING OF THE ASSESSEE COMPANY WERE PITTED AS AGAINST THAT OF THE AFORESAID COMPAR ABLE, IT STOOD REVEALED THAT THE SAID COMPARABLE WA S PROVIDING ADVISORY FUNCTIONS ON RESTRUCTURING LIKE THE ASSESSEE, AS WELL AS PROVIDING ADVISORY SERVICE S ON ACQUISITION, I.E IN THE MANNER THE ASSESSEE COMP ANY HELPED ITS AE IN CARRYING OUT ACQUISITIONS. IT WAS THUS SUBMITTED BY THE LD. D.R THAT THE FUNCTION S OF THE AFORESAID COMPARABLE, VIZ. LADDERUP CORPORATE ADVISORY SERVICES LIMITED WERE SIMILAR TO THAT OF THE ASSESSEE COMPANY, AND AS SUCH AFTER THOROUGH VETTING AND VERIFICATION OF THE SAID FUNCT IONAL COMPARABILITY THE SAME HAD BEEN INCLUDED IN T HE FINAL SET OF COMPARABLES BY THE TPO. THE LD. D.R IN SUPPORT OF HIS AFORESAID CONTENTION THEREIN PLACED ON RECORD THE COPY OF THE ORDER PASSED BY A COORDIN ATE BENCH OF THE TRIBUNAL, I.E ITAT, DELHI, IN THE CASE OF AVENUE ASIA ADVISORS PRIVATE LIMITED VS. DCIT, CIR CLE 2(1), NEW DELHI, A.Y. 2009-10 , WHEREIN THE TRIBUNAL REFERRING TO THE AFORESAID COM PARABLE, VIZ. LADDERUP CORPORATE ADVISORY SERVICES LIMITED, HAD THEREIN HELD THAT THOUGH THE AFORESAID COMPANY WAS PLANNING TO EXPAND ITS WINGS BY VENTURING INTO MERCHANT BANKING ACTIVITIES AND BROA DEN ITS HORIZON, WHICH REVEALED THAT DURING THE YEA R IT WAS NOT ENGAGED IN MERCHANT BANKING ACTIVITIES. IT WAS THUS IN THE BACKDROP OF THE AFORESAID FACTS SUBMITTED BY THE LD. D.R THAT THE AFORESAID COMPARA BLE WAS NOT ENGAGED IN MERCHANT BANKING ACTIVITIES DURING THE YEAR UNDER CONSIDERATION AND HAD RIGHTLY BEEN INCLUDED BY THE TPO IN THE FINAL LIST OF THE COMPARABLES. 11. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES O F BOTH THE PARTIES, PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL PLACED ON RE CORD BEFORE US. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE FACTS OF THE CASE AND FIND THA T THE AFORESAID COMPARABLE, VIZ. LADDERUP CORPORATE ADVISORY PVT. LIMITED IS REGISTERED AS A CATEGORY O NE MERCHANT BANKING WITH SEBI AND IS ENGAGED IN RENDERING MERCHANT BANKING SERVICES W.E.F JULY 2010 , WHICH FACTUAL POSITION STANDS DULY SUBSTANTIATED FROM THE PERUSAL OF THE WEB PORTAL EXTRACTS OF THE AFORESAID COMPANY. WE FURTHER FIND THAT AS PER THE ANNUAL REPORT THE AFORESAID COMPARABLE IS ENGAGED IN ONLY ONE SEGMENT, WHICH INCLUDES MERCHANT BANKING. WE THUS IN THE BACKDROP OF THE VERY FACT T HAT THE AFORESAID COMPARABLE IS ENGAGED IN THE MERCHANT BANKING/INVESTMENT BANKING AND OTHER SIMIL AR ACTIVITIES, ARE OF THE CONSIDERED VIEW THAT THE SAME CANNOT BE CONSIDERED AS FUNCTIONALLY COMPARABL E TO THE ASSESSEE COMPANY WHICH IS ENGAGED IN THE BUSINESS OF RENDERING NON BINDING INVESTMENT ADVISO RY SERVICES. WE ARE FURTHER NOT IMPRESSED BY THE AVERRMENT OF THE LD. D.R WHO BY REFERRING TO THE O BSERVATIONS RECORDED BY THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF AVENUE ASIA (SUPRA) HAD THE REIN AVERRED THAT THOUGH THE AFORESAID COMPARABLE WAS PLANNING TO EXPAND ITS WINGS BY VENTURING INTO MERCHANT BANKING ACTIVITIES AND BROADEN ITS HORIZON, WHICH REVEALED THAT DURING THE YEAR IT WAS NOT ENGAGED IN MERCHANT BANKING ACTIVITIES, HAD THEREIN TRIED TO DRIVE HOME HIS CONTENTION THAT THE AFORESAID COMPARABLE WAS NOT INVOLVED IN MERCHANT BANKING ACTIVITIES. WE ARE OF THE CONSIDERED VIEW T HAT THE AFORESAID OBSERVATIONS OF THE COORDINATE BENCH OF THE TRIBUNAL WERE RECORDED IN CONTEXT OF A .Y. 2009-10 INVOLVED IN THE CASE BEFORE THEM, WHILE FOR THE YEAR BEFORE US IN THE PRESENT APPEAL IS A.Y. 2011-12. THUS THE CASE LAW RELIED UPON BY T HE LD. D.R IS DISTINGUISHABLE ON FACTS, AND AS SUCH FO R THE FOREGOING REASON WOULD BE OF NO ASSISTANCE TO HIM TO SUPPORT HIS AFORESAID CONTENTION. THAT IN TH E BACKDROP OF THE AFORESAID FACTS AS HAD BEEN BROUG HT TO OUR NOTICE, AND AS SUCH ARE IRREBUTTABLY SUPPORT ED BY THE RECORDS PRODUCED BEFORE US, WE HOLD A STRONG CONVICTION THAT NOW WHEN THE AFORESAID COMPA RABLE, VIZ. LADDER UP CORPORATE ADVISORY PVT. LTD. IS ENGAGED IN MERCHANT BANKING/INVESTMENT BANK ING AND OTHER SIMILAR ACTIVITIES DURING THE YEAR UNDER CONSIDERATION, THEREFORE, THE SAME CANNOT BE CONSIDERED AS FUNCTIONALLY COMPARABLE TO THE ASSESSEE COMPANY WHICH IS ENGAGED IN RENDERING NON BINDING INVESTMENT ADVISORY SERVICES. WE THUS ARE PERSUADED TO SUBSCRIBE TO THE CONTENTION OF THE LD. A.R THAT THE AFORESAID COMPARABLE, VIZ. LADDER UP CORPORATE ADVISORY PVT. LTD. IS FUNCTIONALLY INC OMPARABLE TO THE ASSESSEE COMPANY AND HAD WRONGLY BEEN INCLUDED BY THE AO/TPO IN THE FINAL LI ST OF THE COMPARABLES. WE THUS IN LIGHT OF OUR AFORESAID OBSERVATIONS DIRECT THE AO/TPO TO EXCLUDE THE AFORESAID COMPARABLE, VIZ. LADDERUP CORPORATE ADVISORY PVT. LTD. FROM THE FINAL LIST OF COMPARABLES. 12. THE LD. A.R FURTHER ASSAILING THE INCLUSION OF M/S . MOTILAL OSWAL EQUITY ADVISORS PRIVATE LIMITED BY THE AO/TPO IN THE FINAL SET OF COMPARABL ES, WHICH WAS UPHELD BY THE DRP, THEREIN SUBMITTED THAT THE AFORESAID COMPARABLE OPERATED IN 4 DIFFERENT BUSINESS VERTICAL, I.E FINANCIAL ADVIS ORY, INVESTMENT ADVISORY, MANAGEMENT AND FACILITATION SE RVICES AND IDENTIFYING INVESTMENT OPPORTUNITIES. IT WAS AVERRED BY THE LD. A.R THAT AS NO SEGMENTAL DA TA WAS AVAILABLE IN THE ANNUAL REPORT AND INCOME FROM THE ADVISORY SERVICES CONSTITUTED ONLY 42.10% OF THE TOTAL OPERATING INCOME, THEREFORE, NO FEASIBLE COMPARISON OF THE ASSESSEE COMPANY COULD B E CARRIED OUT AS AGAINST THE AFORESAID COMPARABLE. IT WAS FURTHER SUBMITTED BY THE LD. A.R THAT THE TP O WITHOUT PLACING ON RECORD THE SEARCH PROCESS ON THE BASIS OF WHICH THE AFORESAID COMPANY WAS SELECT ED AS A COMPARABLE, HAD THEREIN MOST ARBITRARILY ITA/1520/M/16- WELLS FARGO REAL ESTATE ADVISORS PV T.LTD. 10 PROCEEDED WITH AND INCLUDED THE SAME IN THE FINAL L IST OF COMPARABLES. THE LD. A.R IN SUPPORT OF HIS AFORESAID CONTENTION THAT THE SELECTION OF A COMPAR ABLE BY THE TPO WITHOUT PLACING ON RECORD THE SEARCH PROCESS CANNOT BE SUSTAINED, THEREIN RELIE D ON THE ORDER PASSED BY THE TRIBUNAL IN THE CASE O F THE ASSESSEE ITSELF FOR A.Y. 2010-11, REPORTED AS TEMASEK HOLDING ADVISORS INDIA PRIVATE LIMITED VS. DCIT, CIRCLE 14(3)(1) (67 TAXMANN.COM 221) (MUM BAI TRIB) , WHEREIN THE TRIBUNAL HAD HELD AS UNDER:- BEFORE ANALYZING EACH AND EVERY COMPARABLE, IN THE BACKGROUND OF THE ARGUMENTS MADE BEFORE US AND MATERIAL PLACED ON RECORD, IT IS NOTICED THAT NOWHERE IN THE TPOS ORDER IT IS MENTIONED WHAT SELECTION PROCESS HAS BEEN ADOPTED FOR INCLUDING THE TWO COMPARABLES BY THE TPO. WHAT ARE THE CRITER IA, KEY WORDS, QUANTITATIVE AND QUALITATIVE FILTERS APPLIED FOR SELECTING THE COMPA RABLES. IF RULES PROVIDES FOR SELECTION CRITERION OF COMPARABLE, THEN SAME HAS TO BE ADHERED TO STRICTLY BY EITHER PARTIES. IF A PARTICULAR MECHANISM OF SEARCH PROCES S IS TO BE DONE SCIENTIFICALLY BY THE ASSESSEE THEN SAME APPLIES TO THE TPO ALSO, OTHERWI SE IT WILL ALWAYS CREATE SUSPICION OF CHERRY PICKING OF THE COMPARABLES BY THE PARTIES . THERE CANNOT BE TWO DIFFERENT STANDARDS UNDER THE LAW, ONE FOR THE ASSESSEE AND O NE FOR THE TPO. SO FAR AS SELECTION OF THE COMPARABLES BY THE TPO, NOTHING HA S BEEN BROUGHT ON RECORD BEFORE US, THAT TPO HAS ADOPTED ANY SCIENTIFIC METHOD FOR SELECTION OF HIS TWO COMPARABLES, I.E. MOTILAL OSWAL INVESTMENT ADVISORY PVT. LTD. AN D FUTURE CAPITAL HOLDINGS LTD. FROM THE PERUSAL OF PARA 9.2 OF THE TPOS ORDER IT APPEARS THAT, HE HAS TRIED TO PICK- UP THE TWO COMPARABLES FROM THE ACCEPT AND REJECT M ATRIX OF COMPANIES BY THE ASSESSEE DURING ITS SEARCH PROCESS. SUCH AN APPROAC H CLEARLY INDICATES CHERRY PICKING, WHICH APPROACH CANNOT BE ACCEPTED. ALTERNATIVELY, IT WAS SUBMITTED BY THE LD. A.R THAT NOT ONLY THE TPO HAD RESORTED TO CHERRY PICKING PROCESS WHILE SELECTING THE AFORESAID COMPARABLE, B UT ALL THE MORE HAD AFFORDED ONLY A ONE DAY NOTICE TO PLACE ITS OBJECTIONS IN CONTEXT OF THE SELECTION OF THE AFORESAID COMPARABLE, VIZ. MOTILAL OSWAL EQUITY ADVISORS PRIVATE LIMITED. THE LD. A.R FURTHE R SUBMITTED THAT THE AFORESAID COMPANY, VIZ. MOTILAL OSWAL EQUITY ADVISORS PRIVATE LIMITED WAS F UNCTIONALLY INCOMPARABLE TO THE ASSESSEE COMPANY, AND IN SUPPORT OF HIS AFORESAID CONTENTION RELIED ON THE DIRECTORS REPORT PLACED AT PAGE NO . 343-344 OF THE APB, WHICH REVEALED THAT UNLIKE THE ASSESSE E COMPANY WHICH WAS ENGAGED IN THE BUSINESS AS THAT OF AN INVESTMENT ADVISOR, THE AFOR ESAID COMPARABLE WAS INVOLVED IN MAKING INVESTMENTS IN PORTFOLIO COMPANIES. THUS IN NUTSHEL L, THE CONTENTION OF THE LD. A.R WAS THAT THE AFORESAID COMPARABLE, VIZ. MOTILAL OSWAL EQUITY PRI VATE LIMITED WAS AN INVESTMENT BANKER/ASSET MANAGER AND WAS MANAGING THE FUNDS, UNLIKE THE ASSE SSEE COMPANY WHICH WAS ENGAGED IN THE BUSINESS AS THAT OF AN INVESTMENT ADVISOR, AND AS SUCH BEING FUNCTIONALLY DIFFERENT THUS COULD NOT BE SELECTED AS A COMPARABLE. PER CONTRA, IT WAS SUBMITTED BY THE LD. D.R THAT THE CLAIM OF THE ASSESSEE THAT THE AFORES AID COMPARABLE, VIZ. MOTILAL OSWAL EQUITY PVT. LIMITED HAD DURING THE YEAR LAUNCHED A FUND WAS FACTUALLY NOT CORRECT. IT WAS SUBMITTED BY THE LD. D.R THAT T HE ANNUAL ACCOUNTS OF THE AFORESAID COMPARABLE REVEALED THAT IT WAS PROVIDING ADVISORY SERVICES TO VARIOUS FUNDS AND HAD NOT LAUNCHED ANY FUNDS OF IT S OWN. THE LD. D.R REFERRING TO SCHEDULE J OF THE ANNUAL REPORT OF THE AFOREMENTIONED COMPARABLE, THEREIN SUBMITTED THAT THE LATTER DURING THE YEAR U NDER CONSIDERATION HAD AN INCOME FROM ADVISORY FEES OF RS. 5,30,41,908/- AND A MANAGEMENT FEE OF RS.6,6 9,13,428/-, ON THE BASIS OF WHICH IT COULD SAFELY B E CONCLUDED THAT THE SAID COMPARABLE, VIZ. MOTILAL OS WAL EQUITY PVT. LIMITED WAS FUNCTIONALLY COMPARABLE TO THE ASSESSEE COMPANY AND HAD RIGHTLY BEEN INCLUDED IN THE FINAL LIST OF THE COMPARABLES BY THE A.O/TPO. 13. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES O F THE BOTH THE PARTIES, PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL PLACED ON RECORD. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION T O THE FACTS OF THE CASE AND ARE OF THE CONSIDERED VIE W THAT AS PER THE FACTS AVAILABLE ON RECORD, IT STA NDS DULY SUBSTANTIATED FROM THE DIRECTORS REPORT (PAG E 343 OF APB) THAT THE AFORESAID COMPARABLE WAS CARRYING OUT INVESTMENTS IN PORTFOLIO COMPANIES. WE FIND THAT A PERUSAL OF THE DIRECTORS REPORT OF T HE AFORESAID COMPARABLE REVEALS THAT DURING THE YEAR U NDER CONSIDERATION IT HAD MANAGED INDIA BUSINESS EXCELLENCE FUND I AND INDIA REALITY EXCELLENCE FUND I (IREF-I), AND WAS FURTHER CONTEMPLATING TO RAISE IREF-II WITH A CORPUS OF BETWEEN RS.500-750 C RORES IN FINANCIAL YEAR 2012. WE ARE OF THE CONSIDERED VIEW THAT THE FUNCTIONAL ANALYSIS OF THE AFORESAID COMPARABLE SUBSTANTIALLY PLACES IT AT A VARIANCE AS AGAINST THE ASSESSEE COMPANY WHICH IS E NGAGED IN THE BUSINESS AS THAT OF AN INVESTMENT ADVISOR. WE FURTHER FIND THAT FROM A PERUSAL OF THE ANNUAL REPORT OF THE AFORESAID COMPARABLE FOR FINANCIAL YEAR 2010-11, IT STANDS REVEALED THAT THE LATTER OPERATES 4 DIFFERENT BUSINESS VERTICALS, VI Z. ITA/1520/M/16- WELLS FARGO REAL ESTATE ADVISORS PV T.LTD. 11 FINANCIAL ADVISORY, INVESTMENT ADVISORY, MANAGEMENT AND FACILITATION SERVICES AND IDENTIFYING INVESTMENT OPPORTUNITIES. WE FIND THAT DESPITE THE AFORESAID MULTIPLE SECTORS OF OPERATIONS, NO SEGMENTAL DATA IS AVAILABLE IN THE ANNUAL REPORT, AND THE INCOME FROM THE ADVISORY OPERATING CONSTITUTE ONLY 42.10% OF ITS TOTAL OPERATING INCOM E. WE ARE FURTHER OF THE CONSIDERED VIEW THAT AS OBSERVED BY US HEREINABOVE, THE AFORESAID COMPARABL E UNLIKE THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANAGING AND ADVISING FUNDS IN THE GROWTH CAPITAL A S WELL AS REAL ESTATE SPACE. THAT A PERUSAL OF SCHEDULE E TO THE BALANCE SHEET OF THE AFORESAID COMPARABLE THEREIN REVEALS THAT THE LATTER HAD MADE INVESTMENTS IN ONE OF THE FUNDS MANAGED BY IT, I.E INDIA REALITY EXCELLENCE FUND. THUS IN THE TOTALI TY OF THE AFORESAID FACTS WE ARE OF THE CONSIDERED VIE W THAT FUNCTIONS PERFORMED BY THE AFOREMENTIONED COMPARABLE, VIZ. MOTILAL OSWAL EQUITY PVT. LIMITED, WHICH IS INTO MANAGING AND INVESTMENT INTO FUNDS, CANNOT BE COMPARED TO THE ASSESSEE WHOSE FUNCTIONS ARE STRICTLY LIMITED TO AS THAT OF AN INVESTMENT ADVISOR. THUS IN LIGHT OF OUR AFORESAID OBSERVATIO NS WE ARE OF THE CONSIDERED VIEW THAT THE AFOREMENTIONED COMPARABLE, VIZ. MOTILAL OSWAL EQUIT Y PVT. LTD. IS FUNCTIONALLY INCOMPARABLE WITH THE ASSESSEE COMPANY AND HAD WRONGLY BEEN INCLUDED IN T HE LIST OF THE FINAL COMPARABLES. WE THUS DIRECT THE AO/TPO TO EXCLUDE THE AFORESAID COMPARABLE FROM THE FINAL LIST OF THE COMPARABLES. 14. THAT IN LIGHT OF OUR AFORESAID OBSERVATIONS WE HERE IN DIRECT THE A.O/TPO TO RECOMPUTE THE ALP OF THE ASSESSEE COMPANY. THE A.O/TPO ARE DIRECT ED THAT IF THE ALP OF THE ASSESSEE IS FOUND WITHIN THE SAFE HARBOR OF (+)/(-) 5% PARAMETERS, TH EN NO ADDITION WOULD BE CALLED FOR IN THE HANDS OF THE ASSESSEE. THE APPEAL OF THE ASSESSEE IS THUS ALLOWE D IN TERMS OF OUR AFORESAID OBSERVATIONS. RESPECTFULLY FOLLOWING THE ABOVE ORDER, WE HOLD THA T THE DRP WAS NOT JUSTIFIED IN RESTRICTING THE COMPARABLE SELECTED BY THE ASSESSEE AS WELL AS IN APPROVING THE TWO NEW COMPARABLES SELECTED BY THE TPO, THAT THE IT.S ENTERED INTO BY THE ASSESSEE WERE AT ARMS LENGTH. ACCORDINGLY, GROUND NUMBER FIVE AND SIX ARE DECIDED IN FAVOUR OF THE ASSESSEE. 7. GROUND NUMBER EIGHT,DEALING WITH +/(-)5% VARIATION, IN OUR OPINION, NEEDS NO ADJUDICATION AS WE HAVE DECIDED GS.AO 5 & 6 IN FAVOUR OF THE ASS ESSEE. NINTH GROUND IS ABOUT INTEREST TO BE LEVIED U/S.234B OF THE ACT.AS THE GROUND IS CONS EQUENTIAL NATURE, SO, WE ARE NOT ADJUDICATING THE SAME.10 TH GROUND OF APPEAL PERTAINS TO INITIATION OF PENALTY U/S.271 (1) (C) OF THE ACT, IS PREMATURE,SO,WE DISMISS IT. AS A RESULT, APPEAL F ILED BY THE ASSESSEE STANDS PARTLY ALLOWED. . ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH JANUARY, 2018. 17 , 2018 SD/- SD/- ( / AMARJIT SINGH ) ( !' / RAJENDRA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; /DATED : 17.01.2018. JV.SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR K BENCH, ITAT, MUMBAI / , , . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.