STANDARD CHARTERED PVT EQUITY ADVISORTY INDIA P.LTD, MUMBAI V. DCIT CIR 1(3), MUMBAI

ITA 1924/MUM/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 4863 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 10 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: K
• Assessment Year: 2010-2011
• Appeal Filed On: 28-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: CHANDANI SHAH A RS
• Keywords: Transfer pricing; International transaction; Rule of consistency

Judgement Text

P A G E | 1 ITA NO. 1924/MUM/2016 A.Y. 2010 - 11 STANDARD CHARTERED PRIVATE EQUITY ADVISORY INDIA PVT. LTD. VS. DEPUTY COMMISSIONER OF INCOME TAX IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH, MUMBAI BEFORE SHRI G.S.PANNU , VICE PRESIDENT AND SHRI RAVISH SOOD, JUDICIAL MEMBER ITA NO . 1924/MUM/2016 (ASSESSMENT YEAR: 2010 - 11 ) STANDARD CHARTERED PRIVATE EQUITY ADVISORY INDIA PRIVATE LIMITED , CRESCENZO, 7 TH FLOOR, C - 38 - 39, G - BLOCK, BANDRA KURLA COMPLEX, BANDRA EAST, MUMBAI - 400 051. VS. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 1(3), AAYAKAR BHAVAN, MUMBAI PAN AADCM7746F (APPELLANT) (RESPONDENT) APPELLANT BY: S HRI DHANESH BAFNA & MS. CHANDANI SHAH , A.RS RESPONDENT BY: MS. NILU JAGGI , D.R DATE OF HEARING: 14 .11 .2018 DATE OF PRONOUNCEMENT: 0 8 .02 .2019 O R D E R PER RAVISH SOOD, JM THE PRESENT APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) - 58, MUMBAI DATED 22.01.2016, WHICH IN TURN ARISES FROM THE ORDER PASSED BY THE A.O UNDER SEC.143(3) R.W.S 144C OF THE INCOME TAX ACT, 1961 (FOR SHORT I.T. ACT), D ATED 30.04.2014 FOR A.Y. 2010 - 11. THE ASSESSEE ASSAILING THE ORDER OF THE CIT(A) HAS RAISED BEFORE US THE FOLLOWING GROUND S OF APPEAL: P A G E | 2 ITA NO. 1924/MUM/2016 A.Y. 2010 - 11 STANDARD CHARTERED PRIVATE EQUITY ADVISORY INDIA PVT. LTD. VS. DEPUTY COMMISSIONER OF INCOME TAX EACH OF THE GROUNDS AND/ OR SUB - GROUNDS OF THE APPEAL ARE INDEPENDENT AND WITHOUT PREJUDICE TO THE OTHERS. 1. ON THE FAC TS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE HON'BLE COMMISSIONER OF INCOME - TAX (APPEALS) - 58 ('CIT(A)') ERRED IN UPHOLDING THE ACTION OF THE LD . ASSESSING OFFICER ('AO') LD . TRANSFER PRICING OFFICER ('TPO') IN CONFIRMING THE ADDITION TO THE EXTENT OF RS.1,91,94,922/ - TO THE INCOME OF THE APPELLANT BY HOLDING THAT ITS INTERNATIONAL TRANSACTIONS PERTAINING TO THE PROVISION OF INVESTMENT ADVISORY/ RESEARCH SERVICES DO NOT SATIS F Y THE ARM'S LENGTH PRINCIPLE ENVISAGED UNDER THE INCOME TAX ACT,1961 ('THE ACT'). 2. IN DOING SO, THE HON BLE CIT(A)/ LD. AO/TPO GROSSLY ERRED IN: 2.1 NOT APPRECIATING THE FACT THAT IN RESPECT OF THE INTERNATIONAL TRANSACTION, NONE OF THE CONDITIONS SET OU T IN SECTION 92C(3) OF THE ACT ARE SATISFIED AND THEREFORE, IT IS INCORRECT TO DISREGARD THE TRANSFER PRICING ANALYSIS CARRIED OUT BY THE APPELLANT AND TO RE - DETERMINE THE ARM S - LENGTH PRICE . 2.2 IN NOT APPLYING MULTIPLE YEAR DATA FOR COMPARABLE COMPANIES AND USING DATA FOR THE FINANCIAL YEAR 2009 - 10 ALONE. 2.3 NOT INCLUDING ONE COMPARABLE COMPANY I.E. CYBER MEDIA RESEARCH LTD. SELECTED BY THE APPELLANT ON THE GROUND THAT IT IS FUNCTIONALLY NOT COMPARABLE TO THE FUNCTIONS PERFORMED BY THE APPELLANT. THE APPELLANT THEREFORE PRAYS THAT THE AFORESAID ADJUSTMENT BE DELETED. THE APPELLANT CRAVES LEAVE TO ADD TO, ALTER, AMEND OR WITHDRAW ALL OR ANY OF THE ABOVE GROUNDS OF APPEAL. 2. BRIEFLY STATED, THE ASSESSEE COMPANY WHICH IS ENGAGED IN INVESTMENT RESEARC H AND ADVISORY ACTIVITIES HAD E - FILED ITS RETURN OF INCOME FOR A.Y. 2010 - 11 ON 12.10.2010, DECLARING TOTAL INCOME AT RS.4,73,54,612/ - . SUBSEQUENTLY, THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT UNDER SEC. 143(2). 3. DURING THE COURSE OF T HE ASSESSMENT PROCEEDINGS THE A.O MADE A REFERENCE UNDER SEC.92CA(1) OF THE I.T. ACT TO THE ADDL. CIT, TRANSFER PRICING OFFICE - II(4), MUMBAI (FOR SHORT TPO) FOR DETERMIN ING THE ALP OF THE INTERNATIONAL TRANSACTIONS OF THE ASSESSEE FOR THE YEAR UNDER CONS IDERATION. IN THE COURSE OF THE PROCEEDINGS , IT WAS OBSERVED BY THE TPO THAT THE ASSESSEE HAD DURING THE YEAR UNDER CONSIDERATION PROVIDED RESEARCH SERVICES TO ITS ASSOCIATED ENTERPRISES (FOR SHORT A . E) P A G E | 3 ITA NO. 1924/MUM/2016 A.Y. 2010 - 11 STANDARD CHARTERED PRIVATE EQUITY ADVISORY INDIA PVT. LTD. VS. DEPUTY COMMISSIONER OF INCOME TAX IN CONNECTION WITH INVESTMENT OPPORTUNITIES IN INDIA. THE ASSESSEE HAD ADOPTED TRANSACTIONAL NET MARGIN METHOD (FOR SHORT TNMM) FOR BENCHMARKING ITS INTERNATIONAL TRANSACTIONS. THE PROFIT LEVEL INDICATOR (FOR SHORT PLI) WAS THE O PERATING PROFIT/ COST . IT WAS NOTICED BY T HE TPO THAT THE ASSESSEE HAD IDENTIFIED SIX COMPANIES AS COMPARABLES FOR BENCHMARKING THE ALP OF ITS INTERNATIONAL TRANSACTIONS. AS PER THE TP STUDY REPORT THE PLI OF THE ASSESSEE WAS 15% AS AGAINST THE A RITHMETIC MEAN OF 15.68% OF TH E SIX COMPARABLES, AS UNDER: SR. NO. PARTICULARS OP/TC 1. CRISIL LTD. (SEGMENT RESEARCH) 47.81% 2. FUTURE CAPITAL HOLDINGS LTD. (INVESTMENT ADVISORY SEG . ) - 2.71% 3. FUTURE CAPITAL INVESTMENT ADVISORS LTD. 23.46% 4. INDIAN VENTURE CAPITAL LTD. - 4.39% 5. KSHITIJ INVESTMENT ADVISORY CO. LTD. 23.46% 6. QUANTUM ADVISORS PVT. LTD. 6.42% AVERAGE MEAN 15.68% THE ASSESSEE ON BEING DIRECTED BY THE TPO TO SUBMIT AN UPDATE OF THE COMPARABLES FOR THE YEAR UNDER CONSIDERATION VIZ. A.Y. 2010 - 11 EXCLUDED THREE OF THE COMPA RABLES VIZ. (I) INDIAN VENTURE CAPITAL LTD.; (II) CRISIL LTD. (SEGMENT - RESEARCH); AND (III) QUANTUM ADVISORS PVT. LTD. FURTHER, THE ASSESSEE ADDED ONE ADDITIONAL COMPARABLES I.E. IDC INDIA LTD. [NOW KNOWN AS CYBER MEDIA RESEARCH LTD.]. RESULTANTLY, THE FINAL SET OF FOUR COMPARABLES SELECTED BY THE ASSESSEE FOR BENCHMARKING ITS INTERNATIONAL TRANSACTIONS FOR THE YEAR UNDER CONSIDERATION WAS AS UNDER: SR. NO. NAME OF COMPARABLE COMPANY OP/TC 1. CYBER MEDIA RESEARCH LIMITED (FORMERLY KNOWN AS IDC (I) LTD) 12.75% 2. FUTURE CAPITAL HOLDINGS LTD. INVESTMENT ADVISORY SEGMENT 15.21% 3. FUTURE CAPITAL INVESTMENT ADVISORS LTD. 16.75 P A G E | 4 ITA NO. 1924/MUM/2016 A.Y. 2010 - 11 STANDARD CHARTERED PRIVATE EQUITY ADVISORY INDIA PVT. LTD. VS. DEPUTY COMMISSIONER OF INCOME TAX 4. KSHITIJ INVESTMENT ADVISORY CO. LTD. 31.59% ARITHMETIC MEAN 19.08% ASSESSEE MARGIN 15.00% 4. T HE TPO BEING OF THE VIEW THAT CYBER MEDIA RESEARCH LIMITED [FORMERLY KNOWN AS IDC (I) LTD.] WAS FU N CTIONALLY INCOMPARABLE TO THE ASSESSEE , EXCLUDED THE SAME FROM THE FINAL LIST OF C OMPARABLES. APART THEREFROM, THE TPO INCLUDED A NEW COMPARABLE VIZ. MOTILAL OSWAL INVESTMENT ADVISORS PVT. LTD. IN THE FINAL LIST OF COMPARABLES. ON THE BASIS OF HIS AFORESAID DELIBERATIONS THE TPO RECASTED THE FINAL S ET OF COMPARABLES , AS UNDER: SR. NO. NAME OF COMPARABLES COMPANY OP/TC 1. FUTURE CAPITAL HOLDINGS LTD. INVESTMENT ADVISORY 15.21% 2. FUTURE CAPITAL INVESTMENT ADVISORS LTD. 16.75% 3. KSHITIJ INVESTMENT ADVISORY CO. LTD. 31.59% 4. MOTILAL OSWAL INVESTMENT ADVISORS PVT. 97.98% ARITHMETIC MEAN 40.36% ASSESSE S MARGIN 15.00% APPLYING THE AVERAGE MEAN OF 40.36% OF THE AFOREMENTIONED COMPARABLES THE TPO WORKED OUT A TP ADJUSTMENT OF RS.7,87,67,513/ - ,AS UNDER: PARTICULARS AS PER ASSESSEE INVESTMENT ADVISORY INCOME 35,71,87,068 OPERATING COST 31,05,97,450 OPERATING PROFIT 4,65,89,618 OPERATING MARGIN 15.00% ALP OP MARGIN 40.36% ALP OP 12,53,57,131 VARIATION 7,87,67,513 5% OF I.T. 1,78,59,353 CONCLUSION: NO BENEFIT UNDER PROVISO 2 TO SECTION 92C(2) ADJUSTMENT 7,87,67,513 P A G E | 5 ITA NO. 1924/MUM/2016 A.Y. 2010 - 11 STANDARD CHARTERED PRIVATE EQUITY ADVISORY INDIA PVT. LTD. VS. DEPUTY COMMISSIONER OF INCOME TAX 5. THE A.O AFTER RECEIVING THE ORDER PASSED BY THE TPO UNDER SEC. 92CA (3), DATED 16.01.2014 MADE A TP ADJUSTMENT OF RS.7,87,67,513/ - IN RESPECT OF THE INTERNATIONAL TRANSACTIONS OF THE ASSESSEE AND ASSESSED ITS TOTAL INCOME AT RS.12,61,22,130/ - . 6. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). THE CIT(A) AFTER DELIBERATING AT LENGTH ON THE CONTENTION S ADVANCED BY THE ASSESSEE DIRECTED THE AO/TPO TO EXCLUDE MOTILAL OSWAL INVESTMENT ADVISORS PVT. LTD. FROM THE FINAL LIST OF CO MPARABLES. HOWEVER, THE CIT(A) NOT FINDING FAVOUR WITH THE CLAIM OF THE ASSESSEE THAT CYBER MEDIA RESEARCH LTD. [FORMERLY KNOWN AS IDC (I) LTD.] WAS WRONGLY EXCLUDED BY THE TPO FROM THE FINAL LIST OF COMPARABLES, REJECTED THE SA ME . ON THE BASIS OF HIS AFOR ESAID DELIBERATIONS THE CIT(A) RECASTED THE FINAL LIST OF COMPARABLES IN TERMS OF HIS AFORESAID OBSERV ATIONS, AS UNDER: SR. NO. NAME OF COMPARABLE COMPANY ASSESSEES SET (OP/OC) TPOS SET OP/TC FINAL SET (OP/OC) 1. MOTILAL OSWAL INVESTMENT ADVISORS PVT. LTD. NOT TAKEN 97.89% REJECTED 2. FUTURE CAPITAL HOLDINGS LTD. INVESTMENT ADVISORY SEGMENT 15.21% 15.21% 15.21% 3. FUTURE CAPITAL INVESTMENT ADVISORS LD. 16.75% 16.75% 16.75% 4. KSHITIJ INVESTMENT ADVISORY CO. LTD. 31.59% 31.59% 31.59% 5. CYBER MEDIA RESEARCH LTD. 12.75% REJECTED REJECTED ARITHMETIC MEAN 19.08% 40.36% 21.18% IN THE BACKDROP OF HIS AFORESAID OBSERVATIONS THE CIT(A) DIRECT ED THE TPO TO ADOPT THE ARITHMETIC MEAN OF 2 1.18% OF THE AFORESAID COMPARABLES FOR DETERMINING THE ALP OF THE INTERNATIONAL TRANSACTIONS OF PROVIDING INVESTMENT ADVISORY SERVICES BY THE ASSESSEE TO ITS A . ES DURING THE YEAR UNDER CONSIDERATION. 7. THE ASSESSEE BEING AGGRIEVED WITH THE ORDER OF THE CIT( A) HAS CARRIED THE MATTER IN APPEAL BEFORE US. THE LD. AUTHORIZED P A G E | 6 ITA NO. 1924/MUM/2016 A.Y. 2010 - 11 STANDARD CHARTERED PRIVATE EQUITY ADVISORY INDIA PVT. LTD. VS. DEPUTY COMMISSIONER OF INCOME TAX REPRESENTATIVE (FOR SHORT A.R) FOR THE ASSESSEE AT THE VERY OUTSET OF THE HEARING OF THE APPEAL SUBMITTED THAT THE ONLY GRIEVANCE OF THE ASSESSEE PERTAIN ED TO THE EXCLUSION OF CYBER MEDIA RESEARCH LTD. [FORMERLY KNOWN AS IDC (I NDIA ) LTD] BY THE LOWER AUTHORITIES FROM THE FINAL LIST OF COMPARABLES. IT WAS SUBMITTED BY THE LD. A.R THAT THE ASSESSEE WAS RENDERING NON - BINDING INVESTMENT ADVISORY/RESEARCH SERVICES IN CONNECTION WITH INVESTMENT O PPORTUNITIES IN INDIA TO ITS A . ES ON A FIXED COST (+) MARK - UP BASIS , AND HAD EARNED A MARK - UP OF 15% OF THE COST DURING THE YEAR UNDER CONSIDERATION. IT WAS THE CONTENTION OF THE LD. A.R THAT THE ASSESSEE IN ITS T.P STUDY REPORT HAD BENCHMARK ED ITS INTERNA TIONAL TRANSACTIONS BY SELECTING SIX COMPARABLE COMPANIES HAVING A MEAN MARGIN OF 15.68% (USING MULTIPLE YEAR DATA). IT WAS FURTHER SUBMITTED BY THE LD. A.RT HAT THE ASSESSEE AS DIRECTED BY THE TPO FOR USING SINGLE YEAR DATA FOR THE YEAR UNDER CONSIDERATIO N VIZ. F.Y. 2009 - 10 HAD FURNISHED A SET OF FOUR COMPARABLES HAVING BEEN A MEAN MARGIN O F 19.08%. THE LD. A.R SUBMITTED THAT THE TPO REJECTED CYBER MEDIA RESEARCH LTD. [FORMERLY KNOWN AS IDC (I NDIA ) LTD] AND FURTHER SELECTED MOTILAL OSWAL INVESTMENT ADVISOR S CO. LTD. AS A COMPARABLE. ACCORDINGLY, AS PER THE FINAL LIST OF COMPARABLES THE MEAN MARGIN WORKED OUT AT 40.36% , ON THE BASIS OF WHICH AN ADJUSTMENT OF RS.7,87,67,513/ - WAS SUGGESTED BY THE TPO. THE LD. A.R SUBMITTED THAT THOUGH THE CIT(A) IN ALL FAIRNE SS EXCLUDED MOTILAL OSWAL INVESTMENT ADVISORS CO. LTD. FROM THE FINAL LIST OF COMPARABL ES, BUT UPHELD THE ORDER OF THE AO/TPO TO THE EXTENT CYBER MEDIA RESEARCH LTD. [FORMERLY KNOWN AS IDC (I) LTD] WAS EXCLUDED BY THEM FROM THE FINAL LIST OF COMPARABLES. 8. THE LD. A.R IN ORDER TO DRIVE HOME HIS CONTENTION THAT CYBER MEDIA RESEARCH LTD. [FORMERLY KNOWN AS IDC (I NDIA ) LTD] WAS RIGHTLY SELECTED AS A COMPARABLE FOR BENCHMARKING THE INTERNATIONAL TRANSACTIONS OF THE ASSESSEE, SUBMITTED THAT THE SAID COMPANY WA S P A G E | 7 ITA NO. 1924/MUM/2016 A.Y. 2010 - 11 STANDARD CHARTERED PRIVATE EQUITY ADVISORY INDIA PVT. LTD. VS. DEPUTY COMMISSIONER OF INCOME TAX ENGAGED IN THE BUSINESS OF MARKET RESEARCH AND MANAGEMENT CONSULTANCY WHICH WAS IDENTIFIED AS ITS ONLY PRIMARY BUSINESS SEGMENT. IN ORDER TO FORTIFY HIS AFORESAID CLAIM THAT THE AFOREMENTIONED COMPANY VIZ. CYBER MEDIA RESEARCH LTD. WAS FUNCTIONALLY COMPA RABLE TO THE ASSESSEE, IT WAS SUBMITTED BY THE LD. A.R THAT THE NOTES TO THE ACCOUNTS OF THE COMPANY FOR THE YEAR UNDER CONSIDER CONSIDERATION REVEALED THAT THE LAT T ER WAS IN RECEIPT OF MARKET RESEARCH INCOME AND HAD INCURRED RESEARCH AND SURVEY EXPENSES . APART THEREFROM, IT WAS SUBMITTED BY THE LD. A.R THAT THE CIT( A ) WHILE JUSTIFYING EXCLUSION OF THE AFOREMENTIONED COMPANY VIZ. CYBER MEDIA RESEARCH LTD. FROM THE FINAL LIST OF COMPARABLES HAD WRONGLY REFERRED TO THE WEBSITE I.E WWW.CYBERMEDIA.CO.IN WHICH BELONGED TO CYBER MEDIA RESEARCH LTD. WHICH WAS THE HOLDING COMPANY OF THE AFOREMENTIONED COMPARABLE VIZ. CYBER MEDIA RESEARCH LTD./IDC (INDIA) LTD. THE LD. A.R FURTHER SUBMITTED THAT AS THE CORE FUNCTIONS OF CYBER MEDIA RESEARCH LTD. WAS MARKET RESEARCH AND MANAGEMENT AND CONSULTANCY , HENCE THE SAME WAS COMPARABLE TO THE NON - BINDING INVESTMENT ADVISORY SERVICES RENDER E D BY THE ASSESSEE. IT WAS FURTHER SUBMITTED BY THE LD. A.R THAT THE AFOREMENTIONED COMPANY VI Z. CYBER MEDIA RESEARCH LTD. [FORMERLY KNOWN AS IDC (I NDIA ) LTD] WAS ACCEPTED BY THE TPO AS A COMPARABLE WHILE BENCHMARKING THE INTERNATIONAL TRANSACTIONS OF THE ASSESSEE FOR THE EARLIER YEARS I.E A.Y. 2007 - 08 AND A.Y. 2008 - 09 AS WELL AS THE SUBSEQUENT YEA RS I.E. A.Y. 2012 - 13 AND A.Y. 2013 - 14. ON THE BASIS OF HIS AFORESAID CONTENTIONS , IT WAS SUBMITTED BY THE LD. A.R THAT NOW WHEN THERE WAS NO CHANGE IN THE FUNCTIONS OF EITHER THE ASSESSEE OR THAT OF THE AFOREMENTIONED COMPANY VIZ. CYBER MEDIA RESEARCH LTD. DURING THE YEAR UNDER CONSIDERATION AS IN COMPARISON TO THE AFOREMENTIONED YEARS, THEREFORE, THE LOWER AUTHORITIES HAD ERRED IN ADOPTING AN INCONSISTENT APPROACH AND DECLINING TO ACCEPT THE SAID COMPANY AS A COMPARABLE DURING THE YEAR UNDER CONSIDERATION. THE P A G E | 8 ITA NO. 1924/MUM/2016 A.Y. 2010 - 11 STANDARD CHARTERED PRIVATE EQUITY ADVISORY INDIA PVT. LTD. VS. DEPUTY COMMISSIONER OF INCOME TAX LD. A.R IN SUPPORT OF HIS AFORESAID CONTENTION THAT CYBER LTD. RESEARCH LTD. [FORMERLY KNOWN AS IDC (I) LTD] WAS HELD AS FUNCTIONALLY COMPARABLE TO COMPANIES PROVIDING NON - BINDING INVESTMENT ADVISORY SERVICES RELIED ON THE ORDER S OF THE TRIBUNAL IN TH E CASE OF (I) AGM INDIA ADVISORS (P) LTD. VS. DCIT (2016) 70 TAXMANN.COM 49 (MUM) ; (II) TEMASEK HOLDINGS ADVISORS INDIA (P) LTD. VS. DCIT (2016) 67 TAXMANN.COM 221 (MUM); AND (III) TPG CAPITAL INDIA PVT. LTD. VS. DCIT [ITA NO. 7594/MUM/2014 (MUM) ] . IT WAS SUBMITTED BY THE LD. A.R THAT IF THE AFOREMENTIONED COMPANY VIZ. CYBER MEDIA RESEARCH LTD. [FORMERLY KNOWN AS IDC (I NDIA ) LTD] IS INCLUDED IN THE FINAL LIST OF COMPARABLES THEN THE ASSESSEE REMAINING WITHIN THE SAFE HARBOUR RANGE OF +/ - 5% OF THE AVERAGE MEAN MARGIN WOULD NOT BE SUBJECTED TO ANY TRANSFER PRICING ADJUSTMENT. 9. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE (FOR SHORT D.R ) RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. IT WAS SUBMITTED BY THE LD. D.R THAT AS THE AFOREMENTIONED COMPANY VIZ. CYBER MEDIA RESEARCH LTD. [FORMERLY KNOWN AS IDC (I NDIA ) LTD . ] WAS FUNCTIONALLY NOT COMPARABLE TO THE ASSESSEE, HENCE THE SAME WAS RIGHTLY EXCLUDED FROM THE FINAL LIST OF COMPARABLES BY THE LOWER AUTHORITIES. 10. WE HAVE HEARD THE AUTHORIZED REPRESENT ATIVES FOR BOTH THE PARTIES, PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD. THE ISSUE INVOLVED IN THE PRESENT APPEAL LIES IN A NARROW COMPASS I.E. AS TO WHETHER THE LOWER AUTHORITIES WERE RIGHT IN LAW AND FACTS OF THE CAS E IN EXCLUD ING CYBER MEDIA RESEARCH LTD. [FORMERLY KNOWN AS IDC (I NDIA ) LTD] FROM THE FINAL LIST OF COMPARABLES FOR BENCHMARKING THE ALP OF THE INTERNATIONAL TRANSACTIONS OF THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION. ADMITTEDLY, THE ASSESSEE IS ENGA GED IN THE BUSINESS OF PROVIDING INVESTMENT RESEARCH AND ADVISORY ACTIVITIES. IN THE COURSE OF THE PROCEEDINGS BEFORE THE P A G E | 9 ITA NO. 1924/MUM/2016 A.Y. 2010 - 11 STANDARD CHARTERED PRIVATE EQUITY ADVISORY INDIA PVT. LTD. VS. DEPUTY COMMISSIONER OF INCOME TAX TPO THE ASSESSEE HAD WHILE SUBMITTING AN UPDATE OF THE COMPARABLES FOR THE YEAR UNDER CONSIDERATION HAD ADDED THE AFOREMENTIONED COMPA NY VIZ. CYBER MEDIA RESEARCH L T D. [FORMERLY KNOWN AS IDC (I NDIA ) LTD] TO THE REMAINING THREE COMPARABLES. HOWEVER, THE TPO BEING OF THE VIEW THAT C YBER M EDIA R ESEARCH L TD. WHICH AS PER ITS ANNUAL REPORT WAS ENGAGED IN THE BUSINESS OF MARKETING RESEARCH A ND MANAGEMENT CONSULTANCY WAS FUNCTIONALLY DIFFERENT FROM THE ASSESSEE, THUS EXCLUDED THE SAME FROM THE FINAL LIST OF COMPARABLES. ON APPEAL , THE CIT(A) BEING OF THE VIEW THAT THE FUNCTIONAL PROFILE OF C YBER M EDIA R ESEARCH LT D. WAS NOT SIMILAR TO THAT OF THE ASSESSEE, THUS UPHELD THE REJECTION OF THE SAME AS A COMPARABLE . 11. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ISSUE BEFORE US AND ARE UNABLE TO PERSUADE OURSELVES TO SUBSCRIBE TO THE VIEW TAKEN BY THE LOWER AUTHORITIES TO JUSTIFY THE EXCLUSION OF THE AFOREMENTIONED COMPAN Y I.E. CYBER MEDIA RESEARCH LTD. [FORMERLY KNOWN AS IDC (I) LTD] FROM THE FINAL LIST OF COMPARABLES . INSOFAR, THE FUNCTIONAL IN COMPARABILITY OF THE AFOREMENTIONED COMPANY I.E. CYBER MEDIA RESEARCH LTD. [FORMERLY KNOWN AS IDC (I N DIA ) LTD] AS AGAINST THE ASSESSEE AS HAD BEEN GATHERED BY THE CIT(A) ON THE BASIS OF A WEBSITE EXTRACT REFERRED TO BY HIM IN HIS ORDER IS CONCERNED , WE ARE IN AGREEMENT WITH THE LD. A.R THAT THE SAID WEBSITE I.E. W WW.CYBERMEDIA.CO.IN BELONGED TO CYBER MEDIA INDIA LD. WHICH IS THE HOLDING COMPANY OF CYBER MEDIA RESEARCH LTD. [FORMERLY KNOWN AS IDC (I NDIA ) LTD. ] AND DOES NOT PERTAIN TO THE ASSESSEE. INTERESTINGLY, WE FIND THAT SIMILAR ADVERSE INFERENCES BY TAKING SUPP ORT OF THE AFORESAID WEBSITE I.E WWW.CYBERMEDIA.CO.ON DRAWN BY THE LOWER AUTHORITIES WERE TAKEN NOTE OF AND PUT TO REST BY THE ITAT , DELHI IN THE CASE OF ACTIS ADVISORS PVT. LTD. VS. ACIT, CIRCLE - 1(1) (2015) 55 TAX MAN.COM 485 (DELHI) . I N THE AFOREMENTIONED CASE IT WAS OBSERVED BY THE TRIBUNAL THAT THE INFORMATION AVAILABLE ON THE WEBSITE LINK OF C YBER M EDIA P A G E | 10 ITA NO. 1924/MUM/2016 A.Y. 2010 - 11 STANDARD CHARTERED PRIVATE EQUITY ADVISORY INDIA PVT. LTD. VS. DEPUTY COMMISSIONER OF INCOME TAX (I NDIA ) LTD. VIZ. WWW. CYBERMEDIA.CO.IN WAS NOT PERTAINING TO IDC ( INDIA ) LTD. BUT PERTAINED TO ITS HOLDING COMPANY I.E CYBER MEDIA (I NDIA ) LTD. T HE AFORESAID OBSERVATIONS OF THE TRIBUNAL WERE ALSO CONSIDERED BY THE TRIBUNAL IN THE CASE OF TPG CAPITAL INDIA LTD. VS. DCIT [ITA NO. 7594/MUM/2014; DATED 08.02.2017] . ON THE BASIS OF OUR AFORESAID OBSERVA TIONS , WE ARE OF THE CONSIDERED VIEW THAT THE CIT(A) ON THE BASIS OF MISCONCEIVED FACTS HAD DRAWN ADVERSE INFERENCES BY TAKING SUPPORT OF THE INFORMATION DOWNLOADED FROM THE WEBSITE I.E. WWW.CYBERMEDIA.CO.IN , WHICH NOT PERTAINING TO THE AFOREMENTIONED COMPARABLE VIZ. CYBER MEDIA RESEARCH LTD. [FORMERLY KNOWN AS IDC (INDIA) LTD.] BEFORE US , WOULD THUS NOT BE RELEVANT. RATHER, WE FIND THAT THE AFOREMENTIONED COMPANY VIZ. CYBER MEDIA RESEARCH LD. [FORMERLY KNOWN AS IDC (I NDIA ) LTD] HAD BEEN ACCEPTED AS A COMPARABLE TO A COMPANY PROVIDING NON BINDING INVESTMENT ADVISORY SERVICES BY THE TRIBUNAL IN THE CASE OF VIZ. (I ) AGM INDIA ADVISORS (P) LTD. VS. DCIT, 10(1), MUMBAI (2016) 70 TAXMAN.COM 219 (MUM) FOR A.Y. 2010 - 11; (II) TEMASEK HOLDINGS ADVISORS INDIA (P) LTD. VS. DCIT (2016) 67 TAXMAN.COM 221 FOR A.Y. 2010 - 11; (III) WARB U RG PINCUS INDIA PVT. LTD. VS. DCIT (ITA NO. 1612/MUM/2015) (MUM) FOR A.Y. 2010 - 11; AND (IV) SIGUL E R GULF INDIA ADVISORS PVT. LTD. VS. DCIT (ITA NO. 403/MUM/2015) (MUM); DATED 21.04.2017 FOR A.Y. 2010 - 11 . WE FURTHER FIND THAT THE HONBLE HIGH COURT OF BOMBAY IN THE CASE OF CIT VS. CARLYLE INDIA ADVIS ORS PVT. LTD. 357 ITR 584 (BOM) HAD UPHELD THE ORDER OF THE TRIBUNAL , WHEREIN IT WAS CONCLUDED THAT IDC ( INDIA ) LTD. (KNOWN AS CYBER MEDIA RESEARCH LTD.) WAS FUNCTIONALLY COMPARABLE TO THE ASSESSEE BEFORE THEM VIZ. CARLYLE INDIA ADVISORS PVT. LTD. THAT WAS ENGAGED IN PROVIDING INVESTMENT ADVISORY AND RELATED SUPPORT SERVICES. FURTHER, THE HONBLE HIGH COURT OF BOMBAY IN THE CASE OF DCIT VS. GENERAL ATLANTIC (P) LTD. 384 ITR 271 (BOM) HAD ALSO APPROVED THE ORDER OF P A G E | 11 ITA NO. 1924/MUM/2016 A.Y. 2010 - 11 STANDARD CHARTERED PRIVATE EQUITY ADVISORY INDIA PVT. LTD. VS. DEPUTY COMMISSIONER OF INCOME TAX THE TRIBUNAL WHEREIN IT WAS OBSERVED THAT IDC (I NDIA ) LTD. (NOW KNOWN AS C YBER M EDIA R ESEARCH LTD. ) WAS A GOOD COMPARABLE TO THE ACTIVITY OF PROVIDING INVESTMENT ADVISORY SERVICES. IN ALL OF THE AFOREMENTIONED CASES THE AFOREMENTIONED COMPANY VIZ. CYBER MEDIA R E SEARCH L TD. [FORMERLY KNOWN AS IDC ( I NDIA ) LTD] WAS HELD BY THE TRIBUNAL AS A VALID COMPARABLE TO A COMPANY PROVIDING NON BINDING INVESTMENT ADVISORY SERVICES. APART THEREFROM, WE FIND THAT AS AVERRED BY THE LD. A.R THE AFOREMENTIONED COMPANY VIZ. CYBER MEDIA RESEARCH LTD. WAS ACCEPTED AS A COMPARABLE BY THE TPO WHILE BENCHMARKING THE INTERNATIONAL TRANSACTIONS OF THE ASSESSEE FOR THE PROCEEDING YEARS I.E. AY. 2007 - 08 AND A.Y. 2008 - 09 AS WELL AS IN THE SUBSEQUENT YEARS I.E A.Y. 2012 - 13 AND A . Y 2013 - 14. IT IS FURTHER STATED BY THE LD. A.R THAT THERE WAS NO CHANGE IN THE FUNCTIONAL PROFILE OF EITHER THE ASSESSEE OR THE AFOREMENTIONED COMPANY I.E. CYBER MEDIA RESEARCH LTD. DURING THE YEAR UNDER CONSIDERATION AS IN COMPARISON TO THE PRECEDING YEARS. THE AFORESAID CONTENTIONS OF THE LD. A.R HAD NO T BEEN REBUTTED BY THE COUNSEL FOR THE REVENUE BEFORE US. 12. WE ARE OF THE CONSIDERED VIEW THAT AS THE AFOREMENTIONED COMPANY I.E CYBER MEDIA RESEARCH L TD . [FORMERLY KNOWN AS IDC (I NDIA ) LTD] HAS BEEN HELD BY THE COORDINATE BENCHES OF THE TRIBUNAL AND TH E HONBLE HIGH COURT OF BOMBAY AS A VALID COMPARABLE FOR A COMPANY PROVIDING INVESTMENT ADVISORY SERVICES, HENCE, WE FIND NO REASON TO TAKE A DIFFERENT VIEW AND THUS RESPECTFULLY FOLLOWING THE AFORESAID JUDICIAL PRONOUNCEMENT S CONCLUDE THAT CYBER MEDIA RES EARCH LD. [FORMERLY KNOWN AS IDC (I NDIA ) LTD] WAS RIGHTLY INCLUDED BY THE ASSESSEE AS A VALID COMPARABLE FOR BENCHMARKING ITS INTERNATIONAL TRANSACTIONS OF PROVIDING INVESTMENT ADVISORY SERVICES TO ITS A.ES DURING THE YEAR UNDER CONSIDERATION. P A G E | 12 ITA NO. 1924/MUM/2016 A.Y. 2010 - 11 STANDARD CHARTERED PRIVATE EQUITY ADVISORY INDIA PVT. LTD. VS. DEPUTY COMMISSIONER OF INCOME TAX 13. ALTERNAT IVELY, WE MAY HEREIN OBSERVE THAT NOW WHEN THE AFOREMENTIONED COMPANY I.E CYBER MEDIA RESEA RCH LTD. [FORMERLY KNOWN AS IDC (I NDIA ) LTD] WAS SELECTED BY THE TPO AS A COMPARABLE IN THE COURSE OF THE BENCHMARKING ANALYSIS IN THE ASSESSES OWN CASE FOR THE EAR LIER YEARS I.E A.Y. 2007 - 08 AND A.Y. 2008 - 09, THUS IN THE ABSENCE OF THEIR BEING ANY CHANGE IN THE FACTS OR THE FUNCTIONAL PROFILE OF EITHER THE ASSESSEE OR THE ABOVEMENTIONED COMPARABLES IT WAS NOT CORRECT ON HIS PART IN TAKING AN INCONSISTENT APPROACH AN D EXCLUD ING THE SAME FROM THE FINAL LIST OF COMPARABLES. OUR AFORESAID VIEW THAT IN THE ABSENCE OF ANY CHANGE IN THE FACTS THE PRINCIPLE OF CONSISTENCY HAS TO BE FOLLOWED IS FORTIFI ED BY THE JUDICIAL PRON OUNC E MENT S OF THE HONBLE SUPREME COURT VIZ. (I) RADHASOAMI SATSANG VS. CIT (1992) 193 ITR 321 (SC); (II) CIT VS. EXCEL INDUSTRIES LTD. (2013) 358 ITR 295 (SC); AND THE HONBLE HIGH COURT OF BOMBAY I.E PR. CIT VS. QUEST INVESTMENT ADVISORS PVT. LTD. (ITA NO. 280 OF 2016) (BOM) . WE THUS ON THE BASIS OF OU R AFORESAID OBSERVATIONS ARE ALSO UNABLE TO PERSUADE OURSELVES TO SUBSCRIBE TO THE AFOREMENTIONED INCONSISTENT APPROACH ADOPTED BY THE TPO FOR EXCLUDING THE AFOREMENTIONED COMPANY VIZ. CYBER MEDIA RESEARCH LTD. AS A COMPARABLE DURING THE YEAR UNDER CONSIDE RATION. 14. WE THUS IN TERMS OF OUR AFORESAID OBSERVATIONS DIRECT THE A . O/TPO TO RECOMPUTE THE ALP OF THE ASSESSEE AFTER INCLUDING CYBER MEDIA RESEARCH LTD. [FORMERLY KNOWN AS IDC (I NDIA ) LTD] IN THE FINAL LIST OF COMPARABLES. IN CASE THE ALP OF THE ASSESS EE IS FOUND TO BE WITHIN THE SAFE HARBOUR RANGE OF +/ - 5% OF THE MEAN MARGIN OF THE COMPARABLES IN THE FINAL LIST, TH EN NO TRANSFER PRICING ADJUSTMENT WOULD BE CALLED FOR IN THE HANDS OF THE ASSESSEE. 15. THE APPEAL OF THE ASSESSEE IS ALLOWED IN TERMS OF OUR AFORESAID OBSERVATIONS. P A G E | 13 ITA NO. 1924/MUM/2016 A.Y. 2010 - 11 STANDARD CHARTERED PRIVATE EQUITY ADVISORY INDIA PVT. LTD. VS. DEPUTY COMMISSIONER OF INCOME TAX ORDER PR ONOUNCED IN THE OPEN COURT ON 0 8 .02.2019 S D / - S D / - ( G.S PANNU ) (RAVISH SOOD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; 0 8 . 0 2 . 2 0 1 9 PS. ROHIT / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI