ACIT 3(2)(2), MUMBAI V. ORBIMED ADVISORS INDIA P.LTD, MUMBAI

ITA 2653/MUM/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 1730 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-06-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 12-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANISH KUMAR SINGH
• Assessee Lawyers: SIDDHESH CHAGULE
• Keywords: Related party transaction; Transfer pricing; International transaction; Question of law
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES J, MUMBAI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER & SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.2653 /MUM/2017 ASSESSMENT YEAR : 2011-12 ACIT 3 ( 2 )( 2 ), MUMBAI VS. ORBIMED ADVISORS INDIA PR IVATE LIMITED, SUITE- F8E, GRAND HYATT PLAZA, SANTACRUZ (E), MUMBAI 400 055. PAN : AABCO0901A (APPELLANT) ( RESPONDENT) C.O. NO. 346/MUM/2018 (ARISING OUT OF ITA NO.2653 /MUM/2017 ASSESSMENT YEAR : 2011-12) ORBIMED ADVISORS INDIA PR IVATE LIMITED, MUMBAI 400 055. PAN : AABCO0901A VS. ACIT 3(2)(2), MUMBAI ( CROSS - OBJECTOR ) (RESPONDENT) FOR THE ASSESSEE:S/SHRI SIDDHESH CHAGULE & AJIT KU MAR JAIN FOR THE REVENUE: SHRI MANISH KUMAR SINGH DATE OF HEARING : 14 .0 3 .201 9 DATE OF PRONOUNCEMENT : 10 .06 . 201 9 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER THE AFORESAID APPEAL HAS BEEN FILED BY THE REVENUE AND THE CROSS- OBJECTION BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A)-57, MUMBAI, WHICH ORBIMED ADVISORS INDIA PRIVATE LIMITED 2 IN TURN ARISES OUT OF THE ASSESSMENT ORDER PASSED U /S 143(3) R.W.S 144C(3) OF THE I.T. ACT, 1961 FOR A.Y. 2011-12. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. 'WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN CONSIDERING CRISIL RISK AND INF RASTRUCTURE SOLUTIONS LTD AS FUNCTIONALLY COMPARABLE COMPANY TO THE ASSESSEE.' 2. 'WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN CONSIDERING CRISIL RISK AND INF RASTRUCTURE SOLUTIONS LTD AS FUNCTIONALLY COMPARABLE COMPANY TO THE ASSESSEE WITHOUT ADJUDICATING, THE FINDING OF THE TPO THAT T HE COMPARABLE WAS FOLLOWING DIFFERENT FINANCIAL YEAR ENDING 31 ST DECEMBER AS AGAINST THE ASSESSEE FOLLOWING FINANCIAL YEAR ENDIN G 31 ST MARCH.' 3. 'WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN CONSIDERING ICRA MANAGEMENT CON SULTING SERVICES LTD AS FUNCTIONALLY COMPARABLE COMPANY TO THE ASSESSEE.' 4. 'WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DIRECTING THE AO/T PO TO EXCLUDE M/S MOTILAL OSWAL INVESTMENT ADVISORS PVT. LTD AND M/S LADDERUP CORPORATE ADVISORY PVT LTD AS THE COMPARABLES FOR B ENCHMARKING THE TRANSACTION OF PROVISION OF INVESTMENT ADVISORY SERVICES.' 3. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IS ENGA GED IN THE BUSINESS OF PROVIDING NON-BINDING INVESTMENT ADVISORY AND RELAT ED SERVICES TO ITS ASSOCIATED ENTERPRISES (AE). DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE ENTERED INTO INTERNATIONAL TRANSACTION OF PROVIDING NON-BINDING INVESTMENT ADVISORY SERVICES TO ITS AE AMOUNTING TO ` 5,80,54,150/-, WHICH WAS REPORTED IN FORM 3CEB AS INTERNATIONAL TRANSACT ION, WHICH WAS BENCH MARKED BY APPLYING TRANSACTIONAL NET MARGIN METHOD (TNMM). IN ORDER TO BENCH MARK, THE ASSESSEE CARRIED OUT DETAILED SEARC H ANALYSIS ON THE PROWESS ORBIMED ADVISORS INDIA PRIVATE LIMITED 3 AND CAPITALINE DATABASES AND IDENTIFIED A SET OF SI X COMPARABLE COMPANIES, WHICH ARE AS UNDER: SR NO NAME OF THE COMPANY OP/OC 1 A R VENTURE FUNDS MANAGEMENT PRIVATE LIMITED 22.92 2 I D F C INVESTMENT ADVISORS PRIVATE LIMITED 6.37 3 INDIA SECURITIES LIMITED -8.97 4 CRISIL RISK & INFRASTRUCTURE SOLUTIONS LIMITED 15.51 5 I C R A MANAGEMENT CONSULTING SERVICES LIMITED 15.54 6 MOTILAL OSWAL PRIVATE EQUITY ADVISORS PRIVATE LIMIT ED 27.46 MEAN MARGIN 13.14 THE MEAN MARGIN WAS CALCULATED AT 13.14%. THE ASSE SSEE COMPUTED ITS MARGIN AT 18.03% AND, HENCE, THE TRANSACTION WAS CO NSIDERED AT ARMS LENGTH. THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS OBSERVED THAT ASSESSEE HAD ENTERED INTO INTERNATION AL TRANSACTION AND, ACCORDINGLY, THE MATTER WAS REFERRED TO THE TPO TO DETERMINE THE ALP OF INTERNATIONAL TRANSACTION OF INVESTMENT ADVISORY PA YMENT OF RS 5,80,54,150/- SR NO NAME OF THE COMPANY REASONS FOR REJECTION BY TPO 1 A R VENTURE FUNDS MANAGEMENT PRIVATE LIMITED HIGH RELATED PARTY TRANSACTIONS (RPT) 2 I D F C INVESTMENT ADVISORS PRIVATE LIMITED 3 INDIA SECURITIES LIMITED 4 CRISIL RISK & INFRASTRUCTURE SOLUTIONS LIMITED ADVISORY FEE LESS THAN 75% AND DIFFERENT YEAR ENDING 5 I C R A MANAGEMENT CONSULTING SERVICES LIMITED FUNCTIONAL DISSIMILAR- ENGAGED IN MANAGEMENT CONSULTANCY AND ADVISORY SERVICES AND NO SEGMENTAL INFORMATION IS AVAILABLE. ORBIMED ADVISORS INDIA PRIVATE LIMITED 4 THE TPO SELECTED ONLY ONE COMPARABLE I.E. MOTILAL O SWAL PRIVATE EQUITY ADVISORS PRIVATE LIMITED. HOWEVER, WHILE COMPUTING MARGIN OF THE SAID COMPANY THE TPO TREATED THE RECEIPT OF REFERRAL FEE S AS OPERATING IN NATURE AND THEREBY RE-COMPUTED THE MARGIN AT 32.38% INSTEA D OF 27.46% TAKEN BY THE ASSESSEE. FURTHER THE TPO INCLUDED TWO ADDITIO NAL COMPANIES VIZ MOTILAL OSWAL INVESTMENT ADVISORS PRIVATE LIMITED AND LADDE RUP CORPORATE ADVISORY PRIVATE LIMITED AND COMPUTED THE ARITHMETIC MEAN AT 55.68% AS UNDER: SR. NO NAME OF THE COMPANY SELECTED BY NET COST PLUS MARK-UP% (OP/OC) 1 MOTILAL OSWAL PRIVATE EQUITY ADVISORS PRIVATE LIMITED ASSESSEE 32.38% 2 MOTILAL OSWAL INVESTMENT ADVISORS PRIVATE LIMITED TPO 82.23% 3 LADDERUP CORPORATE ADVISORY PRIVATE LIMITED TPO 52.42% ARITHMETIC MEAN 55.68% THE LEARNED TPO CONSIDERING THE ASSESSEES MARGIN A T 17.83% PROPOSED AN ADJUSTMENT OF ` 1,86,48,473/-. ACCORDINGLY, ASSESSMENT WAS FRAMED BY THE AO BY MAKING THE SAID ADDITION ON ACCOUNT OF ALP AD JUSTMENT BY FRAMING ASSESSMENT U/S. 143(3) R.W.S. 144C(3) OF THE INCOME TAX ACT DATED 10.05.2015. 4. IN THIS BACKGROUND, WE WOULD LIKE TO ADJUDICATE VARIOUS GROUNDS RAISED BY THE REVENUE. THE ISSUE RAISED IN GROUND NOS. 1 AND 2 IS AGAINST THE ORDER OF THE CIT(A) CONSIDERING CRISIL RISK AND INFRASTRU CTURE SOLUTIONS LTD., AS ORBIMED ADVISORS INDIA PRIVATE LIMITED 5 FUNCTIONALLY COMPARABLE COMPANY TO THE ASSESSEE WIT HOUT ADJUDICATING THE FINDING OF THE TPO THAT THE COMPARABLE WAS FOLLOWIN G DIFFERENT FINANCIAL YEAR ENDING 31 ST DEC. AS AGAINST THE ASSESSEE FOLLOWING FINANCIAL YEAR ENDING 31 ST MARCH. THE LEARNED CIT(A) AFTER CONSIDERING THE SU BMISSIONS OF THE ASSESSEE HELD AS UNDER: 5. DECISION:- I HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISS IONS MADE BY THE ASSESSEE. WITH RESPECT TO COMPUTATION OF RPT, I AGR EE WITH THE REASONING PROVIDED BY THE TPO AND UPHOLD THAT REIMBURSEMENT T RANSACTIONS SHOULD ALSO BE CONSIDERED WHILE COMPUTING THE PERCENTAGE O F RELATED PARTY TRANSACTIONS. ON PERUSAL OF THE FINANCIALS OF THE C OMPANY, IT IS CLEAR THAT THESE REIMBURSEMENTS ARE NOT JUST PASS THROUGH COST S. RATHER, THE REIMBURSEMENTS ARE AN INTEGRAL PART OF THE FUNCTION THAT THE SAID COMPANY PERFORMS. ACCORDINGLY, I AGREE WITH THE TPO 'S VIEW THAT REIMBURSEMENT TRANSACTIONS SHOULD ALSO BE CONSIDERE D WHILE COMPUTING THE PERCENTAGE OF RELATED PARTY TRANSACTIONS. HENCE , A R VENTURE FUNDS MGRNT PVT LTD, I D F C INVESTMENT ADVISORS LTD AND INDIA SECURITIES LTD CANNOT BE CONSIDERED AS COMPARABLE TO THE APPELLANT . WITH RESPECT TO CRISIL RISK & INFRASTRUCTURE SOLUTIONS LTD, THE APPELLANT HAS SUBMITTED THAT THE COMPANY IS ENGAGED IN THE BUSINESS SIMILAR TO THAT OF THE APPELLANT I.E. PROVISION OF INVESTMENT ADVISORY SERVICES. I AM OF THE OPINION THAT THE COMPANY IS F UNCTIONALLY COMPARABLE TO THE APPELLANT AND CANNOT BE REJECTED. THE REVENU E EARNED FROM ADVISORY SERVICES IS APPROXIMATELY 70% WHICH IS SUB STANTIAL REVENUE EARNED FROM THE SAID SERVICE. FURTHER, I OBSERVED T HAT THE COMPANY HAS EARNED 86% OF ITS TOTAL REVENUE IN THE PRECEDING YE AR FROM INVESTMENT ADVISORY SERVICES. TPOS CONTENTION OF REJECTING T HE SAID COMPANY APPLYING THE FILTER OF 75% IS NOT JUSTIFIED. GIVEN THE ABOVE DISCUSSION AND PLACING RELIANCE ON THE HYDERABAD ITAT DECISION SUBMITTED BY THE APPELLANT IN THE CASE OF INTERNATIONAL SPECIALITY PRODUCTS (I) PVT. LTD., HYDERABAD VS. INCOME-TAX OF ICER 2(1), I AM OF THE OPINION THAT THIS COMPANY IS FUNCTIONALLY COMPARABL E TO THE APPELLANT AND SHOULD BE CONSIDERED IN THE FINAL SET OF COMPANIES. ORBIMED ADVISORS INDIA PRIVATE LIMITED 6 5. WE HAVE HEARD BOTH THE PARTIES AND CONSIDERED TH EIR RIVAL SUBMISSIONS. WE HAVE ALSO PERUSED THE MATERIAL AVAILABLE ON RECO RD. WE FIND MERIT IN THE ARGUMENTS OF THE ASSESSEE THAT CRISIL RISK AND INFR ASTRUCTURE SOLUTIONS LTD., SHOULD BE ACCEPTED AS A COMPARABLE, AS THE MERE FAC T THAT THE SAID COMPANY IS FOLLOWING A DIFFERENT FINANCIAL YEAR SHOULD NOT BE A GROUND TO REJECT A COMPANY THAT IS FUNCTIONALLY COMPARABLE. AS PER RUL E 10B(4), THE DATA TO BE USED IN ANALYSING THE COMPARABILITY OF UNCONTROLLED TRANSACTIONS WITH THE INTERNATIONAL TRANSACTIONS SHALL BE THE DATA RELATI NG TO FINANCIAL YEAR IN WHICH THE INTERNATIONAL TRANSACTIONS HAVE BEEN ENTERED IN TO. THUS, AS PER THE PLAIN READING OF THE AFORESAID RULE, IF THE DATA OF THE C OMPARABLE RELATING TO FINANCIAL YEAR CORRESPONDING TO THE FINANCIAL YEAR FOLLOWED BY THE ASSESSEE IS AVAILABLE IT CAN BE COMPARED. THEREFORE, MERELY BE CAUSE THE ASSESSEE AND THE COMPARABLE FOLLOWED DIFFERENT FINANCIAL YEARS T HAT BY ITSELF DOES NOT MAKE THE COMPANY INCOMPARABLE, IF OTHERWISE, IT IS FUNCT IONALLY SIMILAR TO THE ASSESSEE. THIS VIEW HAS BEEN ACCEPTED BY THE HONB LE GUJRAT HIGH COURT IN MERCER CONSULTING INDIA PVT. LTD. 390 ITR 615. THE REFORE, FOLLOWING THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF MERCER CONSULTING INDIA PVT. LTD. (SUPRA) WE IN PRINCIPLE AGREE THAT EVEN T HOUGH THE COMPARABLE MAY BE FOLLOWING A DIFFERENT FINANCIAL YEAR, HOWEVER, I F THE FINANCIAL DATA OF THE COMPARABLE RELATING TO THE FINANCIAL YEAR FOLLOWED BY THE ASSESSEE IS AVAILABLE AND WHICH IS AUTHENTIC AND CAN BE RELIED UPON, THEN , THE COMPANY SHOULD BE REJECTED AS COMPARABLE. EVEN THE COORDINATE BENCH FOLLOWING THE VARIOUS ORBIMED ADVISORS INDIA PRIVATE LIMITED 7 HIGH COURTS VIDE ITS ORDER DATED 19.04.2018, IN TH E CASE OF ACIT 15(2)(2) VS. MAERSK GLOBAL SERVICES CENTRE (I) P. LTD. (ITA NO. 944/MUM/2016 FOR A.Y. 2011-12) HAS HELD THAT A COMPARABLE CANNOT BE REJEC TED MERELY ON THE BASIS OF DIFFERENT FINANCIAL YEAR BEING FOLLOWED. THE RE LEVANT PORTION OF THE SAID ORDER IS AS UNDER: 6.. ... WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MAT ERIAL ON RECORD. WE HAVE OBSERVED THAT THE TRIBUNAL HAS IN ASSESSEES O WN CASE ALREADY ADJUDICATED W.R.T. COMPARABLE R SYSTEM INTERNATIONA L LTD. IN 1082/M/2015 DATED 29.07.2016 FOR AY 2010-11 FOR INC LUSION OF THIS COMPARABLE, BY HOLDING AS UNDER:- 19. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PART IES AND PERUSED THE MATERIAL AVAILABLE ON RECORD IN THE LIG HT OF THE DECISIONS RELIED UPON. WE FIND FROM THE RECORD THAT THE TRANSFER PRICING OFFICER REJECTED THIS COMPANY AS A COMPARAB LE ON THE GROUND THAT THE ASSESSEE IS A KPO SERVICE PROVIDER WHEREAS THIS COMPANY IS INTO LOW END BPO SERVICE. HOWEVER, THE A FORESAID OBJECTION OF THE TRANSFER PRICING OFFICER WAS NOT A CCEPTED BY THE DRP IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2008 09 AND, IN FACT, DRP HELD R. SYSTEMS INTERNATIONAL LTD. AS COM PARABLE TO THE ASSESSEE. TAKING NOTE OF THE AFORESAID OBSERVAT IONS OF THE DRP, THE TRANSFER PRICING OFFICER HIMSELF IN ASSESS MENT YEAR 200708, ACCEPTED R. SYSTEMS INTERNATIONAL LTD. AS A COMPARABLE. IT FURTHER APPEARS FROM RECORD THAT IN ASSESSMENT YEAR 200910, THE ASSESSING OFFICER AGAIN REJECTED R. SYSTEMS INTERNATIONAL LTD. AS COMPARABLE ON THE GROUND THAT IT IS NOT COMPARABLE TO KPO SERVICE PROVIDER LIKE ASSESSEE AN D SECONDLY IT HAS A DIFFERENT ACCOUNTING PERIOD. HOWEVER, THE TRI BUNAL WHILE DECIDING ASSESSEES APPEAL FOR ASSESSMENT YEAR 2009 10, ITA NO.2594/MUM./2014 DATED 16TH JANUARY 2015, ACCEPTED R. SYSTEMS INTERNATIONAL LTD. AS COMPARABLE TO THE ASS ESSEE OBSERVING AS UNDER: 13. NOW COMING TO THE TWO COMPARABLES INCLUDED BY THE ASSESSEE. SO FAR AS R. SYSTEM INTERNATIONAL LTD. (SEGMENTAL) IS CONCERNED, IT HAS BEEN POINTED OUT B Y THE LEARNED SENIOR COUNSEL THAT THIS COMPANY WAS ACCEPT ED AS A COMPARABLE BY THE TPO IN ASSESSEES OWN CASE IN T HE A.Y. 2007-08 AND ALSO BY THE DRP IN A.Y. 2008-09. T HE TPO HAS REJECTED THIS COMPARABLE IN THIS YEAR, SIMP LY ON ORBIMED ADVISORS INDIA PRIVATE LIMITED 8 THE GROUND THAT IT IS NOT PURELY A KPO SERVICE PROV IDER AND HAVING CALENDAR YEAR ENDING. ON THE CONTRARY THE BP O SEGMENT OF R. SYSTEM IS FUNCTIONALLY COMPARABLE TO THE ASSESSEE AND SIMPLY BECAUSE IT IS FOLLOWING CALENDA R YEAR ACCOUNTING IT CANNOT BE REJECTED. IN A.Y. 2008-09, THE DRP IN THE LIGHT OF FUNCTIONS PERFORMED BY THE ASSESSEE AS WELL AS BPO SEGMENT OF R. SYSTEM INTERNATIONAL, HAS ACCE PTED THE SAME TO BE COMPARABLE COMPANY. THIS FACT HAS AL SO BEEN NOTED BY THE SPECIAL BENCH IN PARA 12 OF THE O RDER. 14. THUS, CONSISTENT WITH THE FACT THAT IN A.Y. 200 7-08, TPO HIMSELF HAS ACCEPTED R. SYSTEM AS A GOOD COMPARABLE AND DRP IN A.Y. 2008-09 HAS ALSO ACCEPTE D THE SAME TO BE COMPARABLE, WHICH HAS BEEN UPHELD BY THE SPECIAL BENCH, THEREFORE, WE DO NOT FIND ANY REASON S TO DEVIATE FROM SUCH A PRECEDENCE OF THE EARLIER YEARS , SO AS TO COME TO A DIFFERENT CONCLUSION WITHOUT ANY MATER IAL DIFFERENCE ON RECORD FOR THIS YEAR. THUS, WE DIRECT THE TPO/AO TO INCLUDE R. SYSTEM INTERNATIONAL LTD. IN T HE LIST OF FINAL COMPARABLES FOR BENCH MARKING THE ASSESSEE S MARGIN. 20. FOLLOWING THE AFORESAID DECISION OF THE TRIBUNA L, THE DRP ALSO IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 201112 HAS ACCEPTED R. SYSTEMS INTERNATIONAL LTD. AS A COMPARA BLE. AS COULD BE SEEN FROM THE IMPUGNED ORDER OF THE DRP, THE ONL Y REASON ON WHICH THE COMPANY WAS REJECTED IS ON ACCOUNT OF DIF FERENT FINANCIAL YEAR. AS ALREADY STATED WHILE ASSESSEE IS FOLLOWING FINANCIAL YEAR AS ACCOUNTING PERIOD THIS COMPANY FO LLOWS CALENDAR YEAR AS ITS ACCOUNTING YEAR. HOWEVER, THERE IS NO DISPUTE THAT CONTEMPORANEOUS DATA RELATING TO NINE MONTHS I.E., APRIL TO DECEMBER IS AVAILABLE IN PUBLIC DOMAIN. THEREFORE, THE DATA AVAILABLE FOR NINE MONTHS IN PUBLIC DOMAIN CAN BE E XTRAPOLATED TO MAKE A REASONABLE COMPARABILITY ANALYSIS. THIS VIEW WAS EXPRESSED BY THE HON'BLE DELHI HIGH COURT IN MCKINS CY KNOWLEDGE CENTRE INDIA PVT. LTD. (SUPRA) WHILE APPR OVING THE DECISION OF THE TRIBUNAL. THEREFORE, THIS COMPANY H AVING BEEN FOUND TO BE FUNCTIONALLY SIMILAR TO THE ASSESSEE TH EREBY ACCEPTED AS A COMPARABLE BY THE TRIBUNAL AS WELL AS THE DEPA RTMENTAL AUTHORITIES IN ASSESSEES OWN CASE IN EARLIER AND S UBSEQUENTLY ASSESSMENT YEARS, WE DO NOT FIND ANY REASON TO EXCL UDE THE SAME AS A COMPARABLE. ACCORDINGLY, ACCEPTING ASSESS EES PLEA, WE DIRECT THE ASSESSING OFFICER / TRANSFER PRICING OFFICER TO CONSIDER R. SYSTEMS INTERNATIONAL LTD. AS A COMPARA BLE. THUS, GROUND NO.6, IS PARTLY ALLOWED. ORBIMED ADVISORS INDIA PRIVATE LIMITED 9 THE ASSESSEE HAS ALSO RELIED ON THE FOLLOWING CASE LAWS TO CONTEND THAT MERELY BECAUSE THE FINANCIAL YEAR OF THE COMPARABLE IS ENDING ON DIFFERENT DATE FALLING WITHIN THE SAME FINANCIAL YE AR AS THAT OF THE ASSESSEE , THE COMPARABLE WILL NOT BE LIABLE TO BE REJECTED ON THIS SHORT GROUND ONLY. THE ASSESSEE RELIED UPON FOLLOWING DEC ISION:- HON'BLE DELHI HIGH COURT IN CASE OF MCKINSEY KNOW LEDGE CENTRE INDIA PRIVATE LIMITED (ITA 217/2014) (PAGE NO. 264 OF PB II) CONFIRMING HONBLE DELHI TRIBUNAL DECISION (ITA NO. 2195/ DEL/2011) (PAGE NO. 286 OF PB II) HON'BLE PUNJAB AND HARYANA HIGH COURT IN THE CASE O F MERCER CONSULTING (INDIA) PVT LTD [TS-664-HC-2016(P & H)-T PJ (PAGE NO. 246OFPB II) HON'BLE MUMBAI TRIBUNAL IN THE CASE OF AEGIS LIMITE D (ITA NO. 7694/MUM/20L4) - (PAGE NO. 309 OF PB II) HON'BLE MUMBAI TRIBUNAL IN THE CASE OF PANGEA3 & LE GAL DATABASE SYSTEMS PVT. LID [ITA NOS.2128 &1958/M/201 4] THE REVENUE ON THE OTHER HAND HAS RELIED UPON DECIS ION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT V. PTC SOFTWAR E INDIA P. LTD.(2017) 395 ITR 176(BOM.) , WHEREIN HONBLE BOMB AY HIGH COURT HELD AS UNDER:- (A) THE ASSESSING OFFICER ON THE BASIS OF THE ORDE R OF THE TPO INCLUDED M/S. TRANSWORKS INFORMATION SERVICES LTD. (TRANSWORKS LTD.) IN HIS COMPARABILITY ANALYSIS. THE GRIEVANCE OF THE RESPONDENT ASSESSEE BEFORE THE TRIBUNAL WAS THAT TR ANSWORK LTD. CANNOT BE A COMPARABLE AS THE RESPONDENT ASSESSEE'S FINANCIAL PERIOD IS FROM 1ST APRIL, 2006 TO 31ST MARCH, 2007 WHILE THE FINANCIAL PERIOD IN RESPECT OF THE COMPARABLE IS FR OM 1ST JULY, 2006 TO 30TH JUNE, 2007. THIS GRIEVANCE BASED ON FA CT WAS NOT DISPUTED BY THE REVENUE BEFORE THE TRIBUNAL OR EVEN BEFORE US. IN TERMS OF RULE 10B(4) OF THE INCOME TAX RULES, 19 62, THE ANALYSIS FOR COMPARISON SHALL BE ON THE DATA RELATI NG TO THE FINANCIAL YEAR IN WHICH THE INTERNATIONAL TRANSACTI ON HAS BEEN ENTERED INTO. IN THE ABOVE VIEW, THE TRIBUNAL HELD THAT AS THE FINANCIAL PERIOD DURING WHICH THE INTERNATIONAL TRA NSACTION WAS ENTERED INTO IS DIFFERENT, M/S. TRANSWORK LTD. COUL D NOT BE TREATED AS COMPARABLE AND THUS NOT INCLUDABLE. (B) WE FIND THAT THE PROVISIONS OF SECTION 10B(4) O F THE RULES ARE CLEAR IN AS MUCH AS IT OBLIGES THAT THE DATA TO BE USED FOR COMPARABILITY ANALYSIS SHOULD BE OF THE SAME FINANC IAL YEAR IN WHICH THE INTERNATIONAL TRANSACTIONS WERE ENTERED I NTO BY THE TESTED PARTY. IN FACT, THIS PRINCIPLE/MANDATE WAS A PPLIED BY THE TPO WHILE CONSIDERING M/S. POWER SOFT GLOBAL SERVIC ES LTD. AS A ORBIMED ADVISORS INDIA PRIVATE LIMITED 10 COMPARABLE BECAUSE IT HAS A FINANCIAL YEAR ENDING I N SEPTEMBER, 2006 AND NOT 31ST MARCH, 2007 AS IN THE CASE OF RES PONDENT ASSESSEE. THE SAME YARDSTICK OUGHT TO HAVE BEEN APP LIED BY THE TPO WHILE CONSIDERING WHETHER TRANSWORK LTD. WAS CO MPARABLE. THE SUBMISSIONS ON BEHALF OF THE MANDATE OF RULE 10 B OF THE RULES CAN BE IGNORED AS THE DIFFERENCE IS ONLY OF T HREE MONTHS IS WITHOUT ANY BASIS. NO SUCH LIBERTY IS GRANTED IN TE RMS OF RULE 10B(4) OF THE RULES. (C) THE FINDINGS OF THE TRIBUNAL BEING ON THE BASIS OF THE UNAMBIGUOUS MANDATE OF RULE 10B(4) OF THE RULES, QU ESTION (III) AS PROPOSED DOES NOT GIVE RISE TO ANY SUBSTANTIAL Q UESTION OF LAW. THUS, NOT ENTERTAINED. WE HAVE OBSERVED THAT HONBLE BOMBAY HIGH COURT HAS NOT ENTERTAINED THE SAID QUESTION OF LAW AS THE FINDING OF THE FACT WAS RECORDED BY THE TRIBUNAL WHICH WAS AFFIRMED BY HONBLE BOMBAY HIGH COURT IN THE SAID DECISION KEEPING IN VIEW MANDATE OF RULE 10B(4) OF THE INCOME-TAX RULES, 1962. IN THE INSTANT CASE, WE HAVE OBSERVED THAT NO PREJUDICE SHALL BE CAUSED TO REVENUE BY INCLUSION OF THESE CO MPARABLES HAVING FINANCIAL YEAR ENDING ON 31ST DECEMBER VIS-A-VIS AS SESSEE CLOSING ITS FINANCIAL YEAR ON 31ST MARCH, WHICH FALLS WITHIN TH E SAME FINANCIAL YEAR AS THAT OF THE ASSESSEE. THE DATA FOR NINE MONTHS IS C OMMON FOR BOTH THE COMPARABLE AND THE ASSESSEE , AND IF THE SAME CAN B E EXTRA-POLATED WITH CREDIBLE ACCURACY ON THE BASIS OF DATA AVAILABLE ON RECORD THEN THERE IS NO REASON WHY THE SAID COMPARABLE SHOULD BE REJECTE D. THE ASSESSEE HAS ALSO PLACED RELIANCE ON CASE LAWS WHICH ARE DETAILE D ABOVE WHICH WE HAVE DULY TAKEN NOTE OF. THE TRIBUNAL HAS ALSO ACCE PTED R SYSTEM INTERNATIONAL LIMITED AS COMPARABLE FOR AY 2009-10 IN ITA NO. 2594/MUM/2014 VIDE ORDERS DATED 16-01-2015 AND ALSO ACCEPTED SAID COMPARABLE R SYSTEM INTERNATIONAL LIMITED AS COMPAR ABLE FOR AY 2010- 11 AND REJECTED CONTENTION THAT MERELY BECAUSE FINA NCIAL YEAR IS ENDING ON 31ST DECEMBER VIS-A-VIS ASSESSEES FINANCIAL YEA R ENDING ON 31ST MARCH, THE COMPARABLE CANNOT BE ACCEPTED. THUS, WE DIRECT FOR INCLUSION OF R SYSTEM INTERNATIONAL LTD. AND CALIBER POINT SO LUTIONS LTD. AS COMPARABLE FOR COMPUTING ALP OF INTERNATIONAL TRANS ACTIONS ENTERED INTO BY THE ASSESSEE WITH ITS AE. REVENUE ALSO FAILS ON THIS GROUND. WE ORDER ACCORDINGLY. 6. SINCE THE FACTS OF THE PRESENT CASE BEFORE US IS THE SAME AS DECIDED IN THE CASE OF MAERSK GLOBAL SERVICES CENTRE (I) PVT. LTD., RESPECTFULLY FOLLOWING THE SAID DECISION, WE UPHOLD THE ORDER OF THE CIT(A ) AND DISMISS THE GROUND NOS. 1 & 2 RAISED BY THE REVENUE. ORBIMED ADVISORS INDIA PRIVATE LIMITED 11 7. THE ISSUE IN GROUND NO.3 IS AGAINST THE ORDER OF THE CIT(A) HOLDING THAT ICRA MANAGEMENT CONSULTING SERVICES LTD. AS FUNCTIO NALLY COMPARABLE TO THE ASSESSEE AS AGAINST THE ORDER OF THE TPO HOLDING TH E SAID COMPANY AS FUNCTIONALLY DISSIMILAR ON THE GROUND THAT IT IS EN GAGED IN MANAGEMENT CONSULTANCY AND ADVISORY SERVICES AND NO SEGMENTAL OPINION WAS AVAILABLE. 8. THE LEARNED CIT(A) ALLOWED THE APPEAL OF THE ASS ESSEE BY OBSERVING AND HOLDING AS UNDER: FURTHER, WITH RESPECT TO I C R A MANAGEMENT CONSULTING SERVICES LTD, THE APPELLANT SUBMITTED THAT THE COMPANY IS ENGAGED IN CONSULTING SERVICES, PROJECT ADVISORY/SERVICES, MARKET ANALYSI S, ETC. IN THE DECISION OF THE DELHI TRIBUNAL IN THE CASE OF XANDER ADVISOR S INDIA PRIVATE LIMITED VS. ACIT, THE TRIBUNAL HELD THAT ICRA IS COMPARABLE TO INVESTMENT ADVISORY COMPANIES SIMILAR TO THAT OF THE APPELLANT . FURTHER, I HAVE ALSO PERUSED THE MUMBAI TRIBUNAL DECISION SUBMITTED BY T HE APPELLANT IN THE CASE OF TEMASEK HOLDING ADVISORS (I) P. LTD. WHICH SUPPORTS THE VIEW THAT ICRA SHOULD BE CONSIDERED AS A COMPARABLE. 9. WE HAVE HEARD THE PARTIES AND PERUSED THE MATERI AL AVAILABLE ON RECORD. WE OBSERVE THAT THE LEARNED CITA() HAS ACC EPTED THE COMPANY AS COMPARABLE BY PLACING RELIANCE ON PLETHORA OF JUDGM ENTS ACCEPTING THE COMPANY AS COMPARABLE INVESTMENT ADVISORY SERVES. WE FURTHER FIND THAT IN THE CASE OF DCIT VS. GENERAL ATLANATIC PVT. LTD. IN ITA NO. 1717/MUM/2016 FOR A.Y. 2011-12, THE TRIBUNAL VIDE ORDER DATED 21. 02.2018, UNDER SIMILAR FACTS HAS HELD TO BE AN ACCEPTABLE COMPARABLE. THE OPERATIVE PART OF THE SAID ORDER IS REPRODUCED BELOW: ORBIMED ADVISORS INDIA PRIVATE LIMITED 12 14. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED MA TERIAL AVAILABLE ON RECORD. INSOFAR AS ICRA MANAGEMENT CONSULTING SERVI CES LTD. IS CONCERNED, THE TRANSFER PRICING OFFICER HAS REJECTE D IT AS A COMPARABLE BASICALLY ON THE REASONING THAT UNLIKE THE ASSESSEE THIS COMPANY IS PROVIDING MANAGEMENT CONSULTING SERVICE. ONE MORE R EASON BY THE TRANSFER PRICING OFFICER TO EXCLUDE THIS COMPANY IS DIFFERENCE IN SKILL SET OF EMPLOYEES. HOWEVER, WE FIND NOTHING NEW IN THE A RGUMENT OF THE DEPARTMENT AS UPON CONSIDERATION OF THE VERY SAME A RGUMENT, THIS COMPANY HAS BEEN FOUND TO BE A COMPARABLE TO A NON BINDING INVESTMENT ADVISORY SERVICE PROVIDER. IT IS RELEVAN T TO OBSERVE, IN CASE 11 GENERAL ATLANTIC PVT. LTD. OF AGM INDIA ADVISORS PV T. LTD. V/S DCIT, [2017] 79 TAXMANN.COM 86 WHICH IS FOR THE VERY SAME ASSESSMENT YEAR, THE TRIBUNAL AFTER CONSIDERING ARGUMENT ADVANCED BY THE DEPARTMENT REGARDING DIFFERENCE IN SKILL SET HELD THAT ICRA MA NAGEMENT CONSULTANCY SERVICES IS A VALID COMPARABLE TO A COMPANY PROVIDI NG NONBINDING INVESTMENT ADVISORY SERVICES. IT IS ALSO RELEVANT T O NOTE, IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 200910, THIS COMPANY HAS BEEN ACCEPTED AS A COMPARABLE BY THE DRP. EVEN OTHERWISE ALSO, TH E OBSERVATIONS OF THE TRANSFER PRICING OFFICER ON DIFFERENCE IN SKILL SET BETWEEN THE ASSESSEE AND THE COMPARABLE COMPANY APPEARS TO BE N OT ON THE BASIS OF PROPER ANALYSIS OF FACT AND MORE ON ASSUMPTION AND PRESUMPTION. AS REGARDS OTHER FUNCTIONAL DIFFERENCES OF THIS COMPAR ABLE POINTED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE, IT NEEDS TO BE MENTIONED, NEITHER TRANSFER PRICING OFFICER NOR DRP HAVE DELIBERATED O N THOSE ASPECTS. SINCE THESE ISSUES RAISED BY THE LEARNED DEPARTMENTAL REP RESENTATIVE ARE COMPLETELY NEW ISSUES AND NEVER RAISED AT ANY STAGE EARLIER, WE DO NOT CONSIDER IT APPROPRIATE TO DEAL WITH THEM AS IT REQ UIRES VERIFICATION OF FRESH FACTS. THEREFORE, RESPECTFULLY FOLLOWING THE DECISIONS OF THE TRIBUNAL CITED BEFORE US BY THE LEARNED AUTHORISED REPRESENT ATIVE, WE DIRECT THE ASSESSING OFFICER TO ACCEPT THIS COMPANY AS A COMPA RABLE. RESPECTFULLY FOLLOWING THE DECISION OF THE CO-ORDIN ATE BENCH IN THE CASE OF GENERAL ATLANTIC PVT. LTD. (SUPRA), WE UPHOLD THE O RDER OF THE CIT(A) AND DISMISS THE GROUND TAKEN BY THE REVENUE. 10. THE ISSUE RAISED IN GROUND NO.4 IS AGAINST THE ORDER OF THE CIT(A) DIRECTING THE AO TO EXCLUDE MOTILAL INVESTMENT ADVI SORS PVT. LTD AND M/S LADDERUP CORPORATE ADVISORY PVT. LTD AS THE COMPARA BLES FOR BENCHMARKING THE TRANSACTION OF PROVISION OF INVESTMENT ADVISORY SERVICES. ORBIMED ADVISORS INDIA PRIVATE LIMITED 13 11. THE TPO HELD THAT THE COMPANY - MOTILAL INVESTM ENT ADVISORS PVT. LTD IS FUNCTIONALLY DISSIMILAR TO THAT OF THE ASSESSEE. THOUGH THE SAID COMPANY IS ENGAGED IN THE BUSINESS OF MERCHANT BANKING, WHICH IS COMPLETELY DIFFERENT FROM THE NON-BINDING INVESTMENT SERVICES PROVIDED B Y THE ASSESSEE, IT ACTUALLY CARRIED OUT ONLY ADVISORY SERVICES DURING THE YEAR. SO FAR AS LADDERUP CORPORATE ADVISORY PVT. LTD IS CONCERNED, THE TPO HELD THAT THE COMPANY IS ENGAGED IN MANAGEMENT CONSULTANCY SERVIC ES AND NOT INTO MERCHANT BANKING. 12. THE LEARNED CIT(A) ALLOWED THE APPEAL OF THE AS SESSEE BY OBSERVING AND HOLDING AS UNDER: DECISION:- I HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISS IONS MADE BY THE ASSESSEE. WITH RESPECT TO MOTILAL OSWAL INVESTMENT ADVISORS PVT. LTD.. THE APPELLANT HAS SUBMITTED THAT THE COMPANY IS ENG AGED IN INVESTMENT BANKING, MERCHANT BANKING, DEAL MAKING A CTIVITIES SUCH AS PRIVATE PLACEMENT OF EQUITY, DEBT AND CONVERTIBLE I NSTRUMENTS, ETC WHICH ARE VERY DIFFERENT FROM THE APPELLANT'S NON-BINDING INVESTMENT ADVISORY SERVICE. BASED ON THE SUBMISSIONS AND ARGUMENTS MAD E BY THE APPELLANT, IT CAN BE OBSERVED THAT MOIAPL IS ENGAGED INTO INVE STMENT BANKING, DEAL MAKING ACTIVITIES, SOLUTIONS AND TRANSACTION EXPERT ISE COVERING PRIVATE PLACEMENT OF EQUITY, DEBT AND CONVERTIBLE INSTRUMEN TS COVERING INTERNATIONAL & DOMESTIC CAPITAL MARKETS, MERGERS & ACQUISITIONS ADVISORY AND RESTRUCTURING ADVISORY & IMPLEMENTATIONS WHICH ARE COMPLETELY DIFFERENT AS COMPARED TO THE BUSINESS OF APPELLANT WHO PROVIDES NON- BINDING INVESTMENT ADVISORY SERVICES. I HAVE PERUSED THE MUMBAI TRIBUNAL DECISION IN THE CASE OF CARLYLE INDIA ADVISORS PRIVATE LIMITED VS. DCIT, SU BMITTED BY THE APPELLANT, WHEREIN MOIAPL WAS REJECTED AS A COMPARA BLE TO INVESTMENT ADVISORY SERVICES, AS THE SAID COMPANY I S A MERCHANT BANKER. FURTHER, MOIAPL HAS ALSO BEEN REJECTED AS A COMPARABLE IN THE ' JUDGEMENTS OF M/S ARISAIG PARTNERS INDIA P VT. LTD. AND TA ASSOCIATES ADVISORY P. LTD. THE ABOVE PRINCIPLE HAS ALSO BEEN SUPPORTED BY JUDGEMENTS IN THE CASE OF SANDSTONE CA PITAL ORBIMED ADVISORS INDIA PRIVATE LIMITED 14 ADVISORS PVT LTD. VS. ACIT, GOLDMAN SACHS (INDIA) S ECURITIES PRIVATE LIMITED VS. ACIT (OSD), ACUMEN FUND ADVISOR Y AND GENERAL ATLANTIC PVT. LTD. VS. DCIT. FURTHER, IT IS ALSO OBSERVED THAT MOIAPL IS EARNING EXCEPTIONALLY HIGH MARGINS AND COMPARING MOIAPL WITH THE BUSINESS OF APPELLANT IS NOT JUSTIFIED. FURTHER, THERE ARE HUG E FLUCTUATIONS IN THE PROFITS EARNED BY MOIAPL AND HENCE CAN'T BE COM PARED WITH THE APPELLANT.1 AGREE WITH THE VIEW OF THE APPELLAN T WHICH IS ALSO DECIDED IN A NUMBER OF JUDGEMENTS (SUBMITTED BY THE APPELLANT DURING THE PROCEEDINGS). BASED ON THE ABOVE DECISIONS AND THE ARGUMENTS OF T HE APPELLANT, I AM OF THE VIEW THAT MOIAPL BEING A COM PANY ENGAGED IN MERCHANT BANKING ACTIVITIES IS NOT SIMIL AR TO THE APPELLANT'S INVESTMENT ADVISORY FUNCTIONS AND ACCOR DINGLY SHOULD BE EXCLUDED FROM THE FINAL SET OF COMPANIES. FURTHER, THE APPELLANT SUBMITTED THAT LADDERUP CORP ORATE ADVISORY PVT LTD IS ENGAGED IN THE BUSINESS OF MERCHANT BANKING ACTIVITIES AND ACTS AS SYNDICATE MEMBER I.E. CARRYI NG ON THE ACTIVITY AS AN UNDERWRITER FOR ITS CLIENTS. FURTHER , IT IS ALSO OBSERVED THAT LCAPL IS ALSO ENGAGED IN ACTIVITIES R ELATING TO MERGERS &ACQUISITION DEALS AND RESTRUCTURING ACTIVI TIES WHEREBY IT PERFORMS THE ROLE OF MANAGER TO THE OFFER IN THE RE SPECTIVE DEALS/ BUSINESS ACTIVITIES. THUS, THE FUNCTIONS PERFORMED BY LCAPL CANNOT BE COMPARED TO THE APPELLANT'S BUSINESS OF N ON-BINDING INVESTMENT ADVISORY BUSINESS. IT IS ALSO OBSERVED THAT THERE IS SIGNIFICANT FLUCT UATION IN THE REVENUE AND PROFITS EARNED BY LCAPL. ALSO, THE REVE NUE OF LCAPL IS DIMINISHING SIGNIFICANTLY. FURTHER, IT IS OBSERV ED THAT THOUGH LCAPL IS ENGAGED IN DIVERSIFIED BUSINESS OPERATIONS , IT DOES NOT REPORT ANY BUSINESS SEGMENTS. I HAVE PERUSED THE DECISION OF HON'BLE ITAT MUMBAI IN THE CASE OF MCKINSEY KNOWLEDGE CENTRE PVT. LTD. VS DCIT, SUB MITTED BY THE APPELLANT, WHEREIN LCAPL WAS REJECTED AS A COMP ARABLE TO INVESTMENT ADVISORY SERVICES, AS THE SAID COMPANY I S ENGAGED IN MERCHANT BANKING ACTIVITIES. FURTHER, I AGREE WITH THE VIEW FOLLOWED BY THE BELOW LISTED JUDGMENTS THAT THERE I S A DIFFERENCE BETWEEN MERCHANT BANKING ACTIVITY AND NON-BINDING / RECOMMENDATORY INVESTMENT ADVISORY SERVICES: Q-INDIA INVESTMENT ADVISORS PRIVATE LIMITED VS. D CIT (ITA NO. 923/MUM/2015) -JURISDICTIONAL ITAT ORBIMED ADVISORS INDIA PRIVATE LIMITED 15 CAPITAL ADVISORS PVT. LTD. VS. ACIT (ITA NO.631 5/MUM/2012) GOLDMAN SACHS (INDIA) SECURITIES PRIVATE LIMITED VS. ACIT (OSDJ (ITA NO 7724/MUM/2011) GENERAL ATLANTIC PVT. LTD. VS. DCIT (ITA NO. 8914 / MUM/ 2010) AND (ITA NO. 1019/ MUM/2014) FUND ADVISORY SERVICES INDIA PRIVATE LIMITED VS. DCIT (ITA NO. 143/MUM/2014) DCIT VS. M/SARISAIG PARTNERS INDIA PVT. LTD. (ITA NO. 1083/MUM/2014) NVP VENTURE CAPITAL INDIA PRIVATE LIMITED VS. DCI T (ITA NO. 1564/MUM/2015) LEHMAN BROTHERS ADVISERS PRIVATE LIMITED VS. ACIT (ITA NO. 7722/M/2012) WELLS FARGO REAL ESTATE ADVISORS P RIVATE LIMITED VS. DCIT (ITA NO. 1093/MUM/2014) BASED ON THE ABOVE DECISIONS AND THE ARGUMENTS OF T HE APPELLANT, I AM OF THE VIEW THAT LCAPL BEING A COMPANY ENGAGED IN M ERCHANT BANKING ACTIVITIES IS NOT SIMILAR TO THE APPELLANT'S INVEST MENT ADVISORY FUNCTIONS AND ACCORDINGLY SHOULD BE EXCLUDED FROM THE FINAL S ET OF COMPANIES. 13. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD AS ALSO THE DECISION RELIED UPON BY THE RIVAL PARTIES, WE OBSERVE THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION O F THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF DCIT VS. GENERAL ATLAN TIC PVT. LTD. (SUPRA), WHEREIN IT HAS BEEN HELD THAT MOTILAL INVESTMENT AD VISORS PVT. LTD IS NOT COMPARABLE TO INVESTMENT ADVISORY SERVICE. SIMILAR LY, IT WAS HELD THAT LADDERUP CORPORATE ADVISORY PVT. LTD CANNOT BE TREA TED AS COMPARABLE TO ORBIMED ADVISORS INDIA PRIVATE LIMITED 16 NON-BINDING INVESTMENT ADVISORY SERVICES. THE OPER ATIVE PART OF THE ORDER IS AS UNDER: 16. INSOFAR AS LADDERUP CORPORATE ADVISORY PVT. LT D. IS CONCERNED, IT IS SEEN THAT THE COMPARABILITY OF THIS COMPANY TO AN I NVESTMENT ADVISORY SERVICE PROVIDER CAME UP FOR CONSIDERATION BEFORE T HE TRIBUNAL, MUMBAI BENCH, IN TEMASEK HOLDING ADVISORS INDIA PVT. LTD. (SUPRA). THE BENCH AFTER CONSIDERING THE SUBMISSIONS OF THE PARTIES HA VING FOUND THAT THE COMPANY IS REGISTERED AS A CATEGORY1 MERCHANT BANK ING COMPANY WITH SEBI AND IS ENGAGED IN MERCHANT BANKING SERVICE W.E .F. JULY 2010 HELD THAT THE COMPANY CANNOT BE TREATED AS COMPARABLE TO NONBINDING INVESTMENTS ADVISORY PROVIDER. RESPECTFULLY FOLLOWI NG THE AFORESAID DECISION OF THE COORDINATE BENCH, WE EXCLUDE THIS COMPANY FROM THE LIST OF COMPARABLES. 17. AS FAR AS MOTILAL OSWAL INVESTMENT ADVISORS LTD . IS CONCERNED, DIFFERENT BENCHES OF THE TRIBUNAL INCLUDING MUMBAI BENCHES HAVE DECIDED AGAINST INCLUDING THIS COMPANY AS A COMPARABLE TO A N INVESTMENT ADVISORY SERVICE PROVIDER. IN FACT IN THE CASE OF A GM INDIA ADVISORY PVT. LTD. (SUPRA), WHICH IS FOR THE VERY SAME ASSESSMENT YEAR, THE TRIBUNAL HAS EXCLUDED THIS COMPANY AS A COMPARABLE FINDING T HAT IT IS ENGAGED IN FOUR DIFFERENT BUSINESS VERTICALS SUCH AS EQUITY CA PITAL MARKETS, MERGER AND ACQUISITION, PROFIT EQUITY SYNDICATIONS AND STR UCTURE DEBTS. THE TRIBUNAL FOUND THAT COMPANYS CORE COMPETENCE IS IN THE FIELD OF MERCHANT BANKING. CONSIDERING THE AFORESAID ASPECTS , THE TRIBUNAL HELD THAT THIS COMPANY CANNOT BE TREATED AS COMPARABLE T O AN INVESTMENT ADVISORY SERVICE PROVIDER. RESPECTFULLY FOLLOWING T HE CONSISTENT VIEW OF THE DIFFERENT BENCHES OF THE TRIBUNAL, WE UPHOLD TH E DECISION OF THE DRP ON THIS ISSUE. 14. WE, THEREFORE, RESPECTFULLY FOLLOWING THE DECIS ION OF THE CO-ORDINATE BENCH, HELD THAT THE LEARNED CIT(A) HAS RIGHTLY DIR ECTED THE AO TO EXCLUDE MOTILAL INVESTMENT ADVISORS PVT. LTD AND LADDERUP C ORPORATE ADVISORY PVT LTD FOR BENCH MARKING THE INVESTMENT ADVISORY SERVICES. THUS, THE ORDER OF THE CIT(A) IS UPHELD AND THE GROUNDS RAISED BY THE REVE NUE ARE DISMISSED. ORBIMED ADVISORS INDIA PRIVATE LIMITED 17 15. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS I N ITS CROSS-OBJECTION NO. 346/MUM/2018 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED TRANSFER PRICING OFFICER ('TPO') AND THE LEARNED ASSESSING O FFICER ('AO') HAVE ERRED IN REJECTING CERTAIN COMPARABLE COMPANIES SELECTED IN THE TRANSFER PRICING DOCUMENTATION NAMELY, A R VENTURE FUNDS MANAGEMENT PRIVATE LIMITED AND IDFC INVESTMENT ADVISORS LIMITED BY ERRONEOUSLY CONSIDERING REIMBURSEMENT OF EXPENSES IN THE CALCULATION OF REL ATED PARTY TRANSACTION RATIO AND THE LEARNED COMMISSIONER OF I NCOME-TAX (APPEALS) ['CIT(A)'] HAS ERRED IN CONFIRMING THE APPROACH OF THE LEARNED TPO/ LEARNED ASSESSING OFFICER 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LEARNED TPO AND THE LEARNED AO HAVE ERRED IN ERRONEOUSLY COMPUT ING THE MARGIN OF MOTILAL OSWAL PRIVATE EQUITY ADVISORS PRIVATE LIMIT ED AS 32.38% INSTEAD OF 27.46% BY ERRONEOUSLY INCLUDING REFERRAL FEES AS OPERATION INCOME WHILE COMPUTING THE MARGIN AND THE LEARNED CIT(A) H AS ERRED IN CONFIRMING THE APPROACH OF THE LEARNED TPO/ LEARNED AO. SINCE WE HAVE DISMISSED THE APPEAL OF THE REVENUE, THE CROSS-OBJECTIONS FILED BY THE ASSESSEE BECOMES INFRUCTUOUS. 16. IN THE RESULT, THE REVENUES APPEAL AND THE CRO SS OBJECTIONS BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 10 TH JUNE, 2019 SD/- SD/- (SAKTIJIT DEY) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED : 10 TH JUNE,2019 SA COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT. 2. THE RESPONDENT. ORBIMED ADVISORS INDIA PRIVATE LIMITED 18 3. THE CIT(A), MUMBAI. 4. THE CIT 5. THE DR, J BENCH, ITAT, MUMBAI BY ORDER, //TRUE COPY// (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, MUMBAI