CARLYE INDIA ADVISORS P.LTD, MUMBAI V. DCIT 10(2), MUMBAI

ITA 2200/MUM/2014

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 8361 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-08-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: K
• Assessment Year: 2009-2010
• Appeal Filed On: 01-04-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KISHAN VYAS
• Assessee Lawyers: AJITKUMAR JAIN MR VISHAL KALRA
• Keywords: Related party transaction; Transfer pricing; International transaction
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL K BENCH, MUMBAI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER ./I.T.A. NO.2200/M/2014 ( AY: 2009 - 2010 ) CARLYLE INDIA ADVISORS PRIVATE LIMITED, 1 ST FLOOR, QUADRANT A, THE IL&FS FINANCIAL CENTRE, PLOT NO.22, G BLOCK, BKC, BANDRA (EAST), MUMBAI 400 051. / VS. DCIT - 10(1), 4 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400 020. ./ PAN : AABCC 4522 F ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI AJITKUMAR JAIN, MR. VISHAL KALRA / RESPONDENT BY : SHRI KISHAN VYAS / DATE OF HEARING :31.7 .2014 / DATE OF PRONOUNCEMENT : 22.8 .2014 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER PASSED UNDER SECTION 143(3) READ WITH SECTION 144C (13) OF THE ACT. AO INCORPORATED THE DIRECTIONS GIVEN BY THE DRP U/S 144C OF THE ACT. IN THIS APPEAL, ASSESSEE, RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE AO HAS ERRED IN ASSESSING THE INCOME OF THE APPELLANT FOR THE RELEVANT ASSESSMENT YEAR AT INCOME OF INR 16,84,16,070/ - AS AGAINST RETURNED INCOME OF INR 8,04,14,738/ - . 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE AO / TRANSFER PRICING OFFICER (TPO) HAVE ERRED IN MAKING TRANSFER PRICING ADJUSTMENTS AND THE DRP HAS FURTHER ERRED IN UPHOLDING ADJUSTMENT OF INR 8,80,02,355/ - TO THE TRANSFER PRICE OF THE INTERNATIONAL TRANSACTIONS OF THE APPELLANT, ALLEGING THAT THE SAME TO BE NOT AT ARMS LENGTH IN TERMS OF THE PROVISIONS OF SECTIONS 92C(1) AND 92C(2) OF THE ACT, READ WITH RULE 10D OF THE INCOME TAX RULES, 1962. 2 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE AO / DRP / TPO HAVE ERRED IN ARBITRARILY REJECTING THE ECONOMIC ANALYSIS / TRANSFER PRICING STUDY UNDERTAKEN BY THE APPELLANT IN ACCORDANCE WITH THE PROVISION S OF THE ACT READ WITH THE RULES FOR THE DETERMINATION OF THE ARMS LENGTH PRICE. 4. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE AO / DRP / TPO, HAVE ERRED IN ARBITRARILY SELECTING OF THE COMPARABLE COMPANIES, NAMELY (A) KLG CAPITAL SER VICES LIMITED (B) KJMC CORPORATE ADVISORS (INDIA) LIMITED AND (C) MOTILAL OSWAL INVESTMENT ADVISORS PVT LTD BASED ON INCORRECT APPRECIATION OF FUNCTIONAL, ASSET AND RISK PROFILE AND THE RELATED PARTY TRANSACTIONS. 5. THAT ON THE FACTS AND IN THE CIRCUMSTAN CES OF THE CASE AND IN LAW, THE AO / DRP / TPO HAVE ERRED IN NOT GRANTING THE BENEFIT OF ECONOMIC / RISK ADJUSTMENTS. 6. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE AO / DRP / TPO HAVE ERRED IN IGNORING THE PROVISIONS OF RULE 10B(3) OF THE RULES AND JUDICIAL PRONOUNCEMENTS, WHICH ADVOCATE USAGE OF MULTIPLE YEAR DATA OF COMPARABLE COMPANIES FOR THE PURPOSE OF DETERMINATION OF THE ARMS LENGTH PRICE. 7. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE AO / DRP / TPO HAVE ERR ED IN NOT PROVIDING THE APPELLANT THE BENEFIT OF 5 PERCENT RANGE AS PROVIDED BY THE PROVISO OF SECTION 92C(2) OF THE ACT. 2. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE IS A SUBSIDIARY OF CARLYLE ASIA INVESTMENT ADVISORS LIMITED (CARLYLE HONG KONG) AND IT IS ENGAGED IN THE BUSINESS OF RENDERING OF NON - BINDING INVESTMENT ADVISORY AND RELATED SUPPORT SERVICES T O CARLYLE HONG KONG. ASSESSEE FILED THE RETURN OF INCOME DECLARING THE TOTAL INCOME OF RS. 8,04,14,738/ - . IN CONSEQUENCE TO THE REFERENCE U/S 92CA(1) OF THE ACT, THE TPO PARTLY REJECTED THE ARMS LENGTH PRICE (ALP) COMPUTED BY THE ASSESSEE IN RELATION TO THE INTERNATIONAL TRANSACTIONS AND PASSED AN ORDER UNDER SUB - SECTION (3) OF SECTION 92CA OF THE ACT AND MADE UPWARD ADJUSTMENTS AMOUNTING TO RS. 8,80,02,355/ - . GIVING EFFECT TO THE SAID ADJUSTMENTS OF THE TPO, AO PREPARED A DRAFT ASSESSMENT ORDER U/S 143( 3) R.W.S 144C OF THE ACT AND COMPUTED THE TOTAL INCOME AT RS.16,84,16,070/ - . THE SAID DRAFT ASSESSMENT ORDER WAS RECEIVED BY THE ASSESSEE WHO FILED OBJECTION BEFORE THE DRP AS PER THE PROVISIONS OF SECTION 144C(2) OF THE ACT. THE SAID OBJECTIONS WERE REJ ECTED BY THE DRP AND THE FINAL ASSESSMENT ORDER WAS PASSED DETERMINING THE TOTAL INCOME AT RS. 16,84,16,070/ - . 3. BEFORE US, AT THE OUTSET, SHRI AJIT KUMAR JAIN, LD COUNSEL FOR THE ASSESSEE INFORMED THE BENCH BY STATING THAT GROUND NOS. 1 TO 3 ARE OF GENE RAL IN NATURE AND GROUND NO.6 TO 8 ARE EITHER ARGUMENTATIVE OR CONSEQUENTIAL IN NATURE. FURTHER, BRINGING OUR ATTENTION TO GROUND NO.5 , IT IS REPORTED THAT THE ISSUE RAISED IN GROUNDNO.5 RELATING TO RISK ADJUSTMENTS IS NOT REQUIRED TO BE ADJUDICATED IF THE GROUND NO.4 IS DECIDED IN FAVOUR OF THE ASSESSEE AND THE GROUND NO.4 3 QUESTIONS THE SELECTION OF 3 COMPARABLES BY THE TPO WHEN THEY ARE NOT FUNCTIONALLY COMPARABLE. THEREFORE, IT IS THE SUBMISSION OF THE ASSESSEE THAT GROUND NO.4 IS REQUIRED TO BE ADJU DICATED FIRST. 4. GROUND NO.4 RELATES TO THE ARBITRARY SECTION OF THE COMPARABLES BY THE TPO WITH A SPECIAL REFERENCE TO KLG CAPITAL SERVICES LIMITED, KJMC CORPORATE ADVISORS (INDIA) LIMITED AND MOTILAL OSWAL INVESTMENT ADVISORS PVT LTD. IT IS THE ARGUME NT OF THE ASSESSEE THAT THESE 3 COMPANIES ARE NOT COMPARABLE QUA FAR ANALYSIS AND ALSO RELATED PARTY TRANSACTIONS. BRINGING OUR ATTENTION TO THE ISSUE RAISED IN THE GROUND, LD COUNSEL FOR THE ASSESSEE PUT - FORWARD THE FOLLOWING ARGUMENTS. GIVING BACKGROUND TO THE ISSUE OF COMPARABLES, LD COUNSEL MENTIONED THAT THE ASSESSEE ENTERED INTO INTERNATIONAL TRANSACTIONS WITH ITS AE AMOUNTING TO RS. 41,44,25,505/ - IN RETURN TO THE SERVICES (INVESTMENT ADVISORY RELATES SUPPORT SERVICES). THE PROFIT LEVEL INDICATOR ( PLI) OPERATIVE EXPENSES / OPERATIVE PROFIT OP/TC IS 15%. ASSESSEE FOLLOWED THE COST PLUS METHOD FOR CONDUCTING ALP OF THESE TRANSACTIONS. ASSESSEE CONSIDERED THE AVAILABLE COMPARABLES WITH THE FOLLOWING OP / TC. 5. FROM THE ABOVE, THE AVERAGE MEAN OF THE SAID COMPARABLES WORKS OUT TO 4.5%, WHICH IS MUCH LESSER THAN 15% REPORTED BY THE ASSESSEE (PAGE 3 OF THE TPO ORDER). DURING THE PROCEEDINGS BEFORE THE TPO, THE ISSUE OF REJECTING SOME OF THE COMPARABLES NAMELY QUAN TUM ADVISORS PVT LTD AND INDIAN VENTURE CAPITAL LIMITED (SL NO.1 AND 2 OF THE ABOVE TABLE) AND ADOPTING FOUR OTHER COMPANIES CAME UP. WITH THE SAID AMENDMENT, THE AVERAGE MEAN OF THE 7 COMPARABLES WORKS OUT TO 37.70%, WHICH IS FAR ABOVE THE PLI OF 15% REP ORTED BY THE ASSESSEE. THE SAID 7 COMPARABLES AND THEIR RESPECTIVE PLI (OP/TC) IS AS UNDER: SL NO. NAME OF THE COMPANY OP / TC 1 QUANTUM ADVISORS PVT LTD 10.90% 2 INDIAN VENTURE CAPITAL LIMITED - 11.84% 3 KSHITIJ INVESTMENT ADVISORY CO. LTD 27.82% 4 FUTURE CAPITAL HOLDINGS LIMITED (INV. ADV. SEG) - 25.94% 5 FUTURE CAPITAL INVESTMENT ADVISORS LTD 20.67% MEAN 4.50% 4 6. BEFORE US, GROUND NO.4 EXTRACTED ABOVE, THE ASSESSEE HAS OBJECTION FOR INCLUSION OF 3 COMPARABLES NAMELY (I) KLG CAPITAL SERVICES LTD (85.22%); (II) KJMC CORPORATE ADVISORS (INDIA) LIMITED (45.09%) AND (III) MOTILAL OSWAL INVESTMENT ADVISORS PVT LTD (82.77%) . EXPLAINING THE ABOVE COMPARABLES, LD COUNSEL FOR THE ASSESSEE PUT - FORWARD THE FOLLOWING ARGUMENTS. AR ALSO FILED THE WRITTEN SUBMISSIONS AND THE RELEVANT DISCUSSION IS GIVEN IN PARA 5 OF THE S AID WRITTEN SUBMISSIONS WHICH READ AS UNDER: A. MOTILAL OSWAL INVESTMENT ADVISORS PRIVATE LIMITED ( MOIAPL) IT IS RESPECTFULLY SUBMITTED THAT TPO ERRED IN SELECTING AND DRP FURTHER ERRED IN UPHOLDING THE SELECTION OF MOIAPL AS A COMPARABLE IN THE FINAL SET OF COMPARABLE CONSIDERED FOR COMPUTING THE ALP AS MOIAPL IS FUNCTIONALLY DISSIMILAR. IT IS SUBMITTED THAT THE HONBLE TRIBUNAL IN APPELLANTS OWN CASE FOR AY 2008 - 2009 HAD DECLARED MOIAPL AS NOT COMPARABLE TO THE APPELLANT. IN THE LIGHT OF THE AB OVE, IT IS SUBMITTED THAT MOIAPL SHOULD BE REJECTED FROM THE FINAL COMPARABLE SET USED FOR THE COMPUTATION OF ARMS LENGTH B. KLG CAPITAL SERVICES LIMITED (KLG) IT IS RESPECTFULLY SUBMITTED THAT THE TPO ERRED IN SELECTING AND DRP FURTHER ERRED IN U PHOLDING THE SELECTION OF KLG AS A COMPARABLE IN THE FINAL SET OF COMPARABLES CONSIDERED FOR COMPUTING FOR ALP. KLG, IT IS SUBMITTED, IS A SEBI REGISTERED MERCHANT BANKER AND IS INTER ALIA ENGAGED THE BUSINESS OF INVESTMENT, DEALING IN SHARES, SECURITIES B ONDS AND RENDERS FINANCIAL AND CONSULTANCY SERVICES. FURTHER, KLG DOES NOT REPORT ANY SEGMENT FOR ITS FINANCIAL AND CONSULTANCY SERVICES. THE HONBLE TRIBUNAL IN APPELLANTS OWN CASE FOR AY 2007 - 2008 AS UPHELD BY THE BOMBAY HIGH COURT AND FOR AY 2008 - 2009 HAS HELD THAT COMPANIES INTO THE BUSINESS OF INVESTMENT BANKING, MERCHANT BANKING, LOAN SYNDICATION, CORPORATE FINANCE AND SIMILAR ACTIVITIES CANNOT BE COMPARED TO THE INVESTMENT ADVISORY ACTIVITY UNDERTAKEN BY THE APPELLANT. SL NO. NAME OF THE COMPANY OP / TC 1 KLG CAPITAL SERVICES LTD 85.22% 2 A R VENTURE FUNDS MANAGEMENT LIMITED 27.49% 3 KJMC CORPORATE ADVISORS (INDIA) LIMITED (FORMERLY KNOWN AS KJMC GLOBAL MARKETS (INDIA) LIMITED 45.09% 4 MOTILAL OSWAL INVESTMENT ADVISORS PVT LTD 82.77% 5 KSHITIJ INFORMATION ADVISORS CO. LTD 27.82% 6 FUTURE CAPITAL HOLDINGS LTD INVESTMENT ADVISORY SEGMENT - 25.04% 7. FUTURE CAPITAL INVESTMENT ADVISORS LTD 20.67% MEAN 37.70% 5 IT IS FURTHER SUBMITTED THAT TOTAL TURNOVER OF KLG IS INR 49,50,000/ - WHICH IS LESS THAN ONE CR AND THEREFORE, IT ALSO DOES NOT SATISFY LESS THAN ONE CRORE TURNOVER FILTER. IT IS A STARTUP COMPANY AND THE PERUSAL OF THE PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDING 31 ST MARCH, 2009 AND 31 ST MARCH 2008 WOULD SHOW THAT THE COMPANY IS STILL IN THE PROCESS OF SETTING UP, WHEREAS THE APPELLANT DURING THE YEAR HAS A TURNOVER OF INR 41,44,25,505/ - . THUS, KLG DESERVES TO BE REJECTED ON THIS GROUND ALSO. RELIANCE IN THIS REGARD IS PLACED ON TH E FOLLOWING JUDICIAL PRECEDENTS WHEREIN IT HAS BEEN HELD THAT COMPANIES WITH LESS THAN ONE CRORE TURNOVER SHOULD NOT BE TAKEN AS A COMPARABLE. SANDSTONE CAPITAL ADVISORS PVT LTD VS. ACIT [2014] 147 ITD 240 (MUM) ITO VS. CRM SERVICES INDIA (P) LIMITED [2011 ] 48 SOT 41 (DELHI) IN THE LIGHT OF THE ABOVE, IT IS SUBMITTED THAT KLG SHOULD BE REJECTED FROM THE FINAL COMPARABLE SET USED FOR COMPUTATION OF ARMS LENGTH MARGIN. C. KJMC CORPORATE ADVISORS (INDIA) LIMITED (FORMERLY KNOWN AS KJMC GLOBAL MARKET (INDIA) LIMITED (KJMC) IT IS RESPECTFULLY SUBMITTED THAT THE TPO ERRED IN SELECTING AND DRP FURTHER ERRED IN UPHOLDING THE SELECTION OF KJMC AS A COMPARABLE IN THE FINAL SET OF COMPARABLE CONSIDERED FOR COMPUTING THE ALP, AS KJMC IS FUNCTIONALLY DISSIMILAR. THE TPO WHILE REJECTING THE CLAIM OF THE APPELLANT HAS HIMSELF STATED IN TP ORDER THAT THE SERVICES PROVIDED BY KJMC ARE NOT EXACTLY SIMILAR AS COMPARED WITH INVESTMENT ADVISORY SERVICES. FURTHER, IT WAS STATED BY THE TPO IN THE ORDER THAT INCOME FROM BROKERA GE IS NOT THE ONLY ACTIVITY THROUGH WHICH KJMC RECEIVES INCOME. IN THIS REGARD, IT IS RESPECTFULLY SUBMITTED THAT KJMC IS ENGAGED IN THE BUSINESS OF BROKING, UNDERWRITING AND MERCHANT BANKING SERVICES. IT IS ALSO SUBMITTED THAT KJMC DOES NOT REPORT ANY SE GMENT FOR ITS AFORESAID SERVICES. THE HONBLE TRIBUNAL IN APPELLANTS OWN CASE FOR AY 2007 - 2008 AS UPHELD BY THE BOMBAY HIGH COURT AND AY 2008 - 2009 HAS HELD THAT COMPANIES INTO THE BUSINESS OF INVESTMENT BROKING, MERCHANT BANKING, LOAN SYNDICATION, CORPORA TE FINANCE AND SIMILAR ACTIVITIES CANNOT BE COMPARED TO THE INVESTMENT ADVISORY ACTIVITY UNDERTAKEN BY THE APPELLANT. IN THE LIGHT OF THE ABOVE, IT IS SUBMITTED THE KJMC SHOULD BE REJECTED FROM THE FINAL COMPARABLE SET USED FOR COMPUTATION OF ARMS LENGTH MARGIN. 7. ON THE OTHER HAND, LD DR RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES. 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE RELEVANT MATERIAL PLACED BEFORE US. IT IS AN UNDISPUTED FACT THAT THE A SSESSEE IS ENGAGED IN THE BUSINESS OF RENDERING INVESTMENT ADVISORY AND RELATED SUPPORT SERVICES TO ITS PRINCIPAL CARLYLE HONG KONG. THE DISPUTE RAISED IN 6 GROUND NO.4 RELATES TO WHETHER (I) KLG CAPITAL SERVICES LTD (KLG); (II) KJMC CORPORATE ADVISORS (IND IA) LIMITED (KJMC) AND (III) MOTILAL OSWAL INVESTMENT ADVISORS PVT LTD (MOIAPL) ARE FUNCTIONALLY COMPARABLE CASES OR NOT CONSIDERING THE DECISION OF THE TRIBUNAL AS WELL AS THE JUDGMENT OF THE BOMBAY HIGH COURT RELIED UPON BY THE ASSESSEE. REGARDING MOIAP L, ASSESSEE RELIED HEAVILY ON THE ORDER OF THE TRIBUNAL IN ITS OWN CASE FOR THE AY 2008 - 2009, A COPY OF WHICH IS PLACED AT PAGE 2 82 OF THE PAPER BOOK. ON PERUSAL OF THE SAID ORDER OF THE TRIBUNAL, WE FIND THAT IT IS DECIDED IN FAVOUR OF THE ASSESSEE VIDE ITA NO.7367/MUM/2012 (AY 2008 - 2009), DATED 7.2.2014. ON PERUSAL OF PARA 12 OF THE SAID ORDER OF THE TRIBUNAL, WHICH CONTAINS THE OPERATIONAL PART, WE FIND THE SAME IS RELEVANT AND THE TRIBUNAL HAS GIVEN ITS FINDING UNDER THE FACTS WHICH ARE SIMILAR TO THA T OF THE AY UNDER CONSIDERATION. THE MOIAPL, WHICH HAS ENGAGED IN THE BUSINESS OF MERCHANT BANKING IS NOT A GOOD COMPARABLE FOR DETERMINING THE ALP. RELEVANT CONTENTS OF THE SAID PARA 12 ARE REPRODUCED HERE FOR THE SAKE OF COMPLETENESS OF THIS ORDER WHIC H READ AS UNDER: 12. ..THE ONLY DISPUTE IS WHETHER MOTILAL OSWAL INVESTMENT ADVISORS PVT LTD CAN BE CONSIDERED AS A COMPARABLE FOR DETERMINATION OF ALP. A PERUSAL OF THREE COMPARABLES CONSIDERED BY THE TPO SHOWS THAT M/S. FUTURE CAPITAL INVESTMENT AD VISORS LTD., HAS OPERATING PROFIT AT 21.79% WHEREAS OPM OF MOTILAL OSWAL INVESTMENT ADVISORS PVT LTD IS 72.33%. THE COMPARABLES USED BY THE TPO THEMSELVES ARE SHOWING EXTREME OPM. A PERUSAL OF THE DIRECTORS REPORT OF MOTILAL OSWAL INVESTMENT ADVISORS PVT LTD SHOWS THAT DURING THE YEAR UNDER CONSIDERATION, THE SAID COMPANY HAS COMPLETED 23 ASSIGNMENTS SUCCESSFULLY AS AGAINST 14 COMPLETED IN THE IMMEDIATELY PRECEDING YEAR. A CLOSE LOOK AT THE FINANCIAL STATEMENTS OF THE SAID COMPANY SHOW THAT THE INCOME FR OM OPERATIONS HAVE BEEN SHOWN ONLY AS ADVISORY FEES WHEREAS IT IS ADMITTEDLY AN UNDISPUTED FACTS THAT THE SAID COMPANY IS ENGAGED IN DIVERSIFIED ACTIVITIES. SEGMENTAL REPORTING IS NOT AVAILABLE. PROFIT AND LOSS ACCOUNT APPEARS TO BE ONLY OF CONSOLIDATED ACCOUNTS. THE SAID COMPANY IS REGISTERED WITH SEBI AS A MERCHANT BANKER AND THE DIRECTORS R EPORT SHOW THAT IT IS INTO TAKE OVER, ACQUISITIONS, DISINVESTMENTS ETC. IN THE ABSENCE OF SPECIFIC DATA IT IS NOT POSSIBLE TO MAKE COMPARISON. IT CAN THEREFORE, BE SAFELY SAID THAT THE SAID COMPANY BEING INTO MERCHANT BANKING AND CANNOT BE CONSIDERED AS A COMPARABLE. WE, ACCORDINGLY, DIRECT THE AO NOT TO CONSIDER MOTILAL OSWAL INVESTMENT ADVISORS PVT LTD AS A COMPARABLE FOR DETERMINATION OF ALP. 9. CONSIDERING THE ABOVE, WE DIRECT THE AO TO EXCLUDE THE MOIAPL FROM THE LIST OF THE COMPARABLES FOR DETERMINATION OF ALP OF THE SAID TRANSACTION . 10. NOW, WE SHALL TAKE UP THE OTHER TWO COMPARABLE S I.E., KGL AND KJMC. IN THIS REGARD, LD COUNSEL FOR THE ASSESSEE RELIE D HEAVILY ON THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE AY 2007 - 08, WHICH WAS UPHELD BY THE HONBLE BOMBAY 7 HIGH COURT. A COPY OF THE SAID JUDGMENT OF THE HONBLE BOMBAY HIGH COURT IS PLACED AT PAGE 292 OF THE PAPER BOOK. PARA 2 OF THE SAID JUDGMENT DATED 22.2.2013 IS RELEVANT HERE, WHICH INDICATED THE APPROVAL OF THE TRIBUNALS ORDER BY THE HONBLE HIGH COURT WHICH MENTIONED THAT THE FUNCTIONS OF THE ASSESSEE CANNOT BE COMPARED WITH THAT OF THE LIST OF COMPARABLES PICKED UP BY THE TPO WHICH INCLUDES THE SAID KGL AND KJMC. THE JUDGMENT OF THE BOMBAY HIGH COURT (SUPRA) IS RELEVANT FOR THE PROPOSITION THAT THE BUSINESS OF INVESTMENT, MERCHANT BANKING, CORPORATE FINANCE AND SIMILAR ACTIVITIES CANNOT BE COMPARED TO THE INVESTMENT ADVISORY ACTIVITI ES OF THE ASSES S EE. IN ANY CASE, NOTHING IS BROUGHT TO OUR NOTICE BY THE REVENUE T O COUNTER THE ABOVE. UNDER THESE CIRCUMSTANCES, WE ARE OF THE OPINION THAT THE KGL AND KJMC ARE FUNCTIONALLY DIFFERENT WHICH CANNOT BE CONSIDERED FOR DETERMINATION OF THE ALP OF THE ASSESSEE . ON THIS REASONING ITSELF, THE COMPARABLE OF THE KGL AND KJMC ARE TO BE EXCLUDED AND THE ASSESSEE IS ENTITLED TO RELIEF. ACCORDINGLY, AO IS DIRECTED TO EXCLUDE THE SAID TWO COMPARABLES TOO . ACCORDINGLY, GROUND NO.4 RAISED BY THE ASSESSEE IS ALLOWED. 11. THUS, I F THE SAID THREE COMPARABLES (KGL; KJMC AND MOIAPL) ARE EXCLUDED, THE RESULTS REPORTED BY THE ASSESSEE BECOME FINAL AND CONSEQUENTIALLY, THE TP ADJUSTMENTS MADE BY THE AO / TPO ARE REQUIRED TO BE DELETED. CONSEQUENTLY, THE DISCUSSION GIVEN IN PARA 3 OF THE ORDER IS RELEVANT AND THE ADJUDICATION OF OTHER GROUNDS , BEING G ENERAL OR CONSEQUENTIAL GROUNDS, AS THE CASE MAY BE, BECOME AN ACADEMIC EXERCISE AND THEREFORE, THEY ARE DISMISSED AS SUCH. 12. IN THE RESULT, APPEAL OF THE A SSESSEE IS PARTLY ALLOWED. ORDER PRONOUNC ED IN THE OPEN COURT ON 2 2 N D AUGUST, 2014. S D / - S D / - (I.P. BANSAL) (D. KARUNAKARA RAO ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; 2 2 /08/2014 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 8 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI