SBI MACQUARIE INFRASTRUCTURE MANAGEMENT P. LTD, MUMBAI V. DCIT 14(3)(2), MUMBAI

ITA 324/MUM/2016

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 1885 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 9 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Assessment Year: 2011-2012
• Appeal Filed On: 20-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Transfer pricing; International transaction; Rule of consistency
• Section: 143(3); 244A; 92B

Judgement Text

SBI MACQUARIE INFRASTRUCTURE MANAGEMENT PVT LTD. VS. DCIT 14(3)(2) MUMBAI ITA NO. 324/MUM/2016, AY. 2011-12. 1 IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH, MUM BAI BEFORE SHRI G.S. PANNU, VP AND SHRI RAVISH SOOD, JM ITA NO. 324/MUM/2016 ( / ASSESSMENT YEAR: 2011-12) SBI MACQUARIE INFRASTRUCTURE MANAGEMENT PRIVATE LIMITED, 92 LEVEL 9, 2 NORTH AVENUE MAKER MAXITY, BANDRA KURLA COMPLEX, MUMBAI 400051. / VS. DCIT 14(3)(2) R.NO. 475, 4 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI 400020. ./ ./ PAN NO. AAECP7936K ( / APPELLANT) : ( / RESPONDENT ) / APPELLANT BY : SHRI NISHANT THAKKAR / MS. JASMIN AMALSADWALA / RESPONDENT BY : MS. NILU JAGGI, D.R / DATE OF HEARING : 15.11.2018 / DATE OF PRONOUNCEMENT : 16.11.2018 / O R D E R PER G.S. PANNU, VICE PRESIDENT: THE PRESENT APPEAL IS DIRECTED AGAINST AN ORDER PA SSED BY THE ASSESSING OFFICER U/S 143(3) R.W.S 144C(13) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT) DATED 18.12.2015, WHICH H AS BEEN PASSED IN TERMS OF THE DIRECTIONS OF THE DISPUTE RESOLUTION P ANEL 2, MUMBAI U/S 144C(5) OF THE ACT DATED 30.10.2015. SBI MACQUARIE INFRASTRUCTURE MANAGEMENT PVT LTD. VS. DCIT 14(3)(2) MUMBAI ITA NO. 324/MUM/2016, AY. 2011-12. 2 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE REA D AS UNDER: 1. IN RE-COMPUTING THE ARMS LENGTH PRICE OF THE I NTERNATIONAL TRANSACTION UNDERTAKEN BY THE APPELLANT RELATING TO THE PROVISI ON OF NON-BINDING INVESTMENT ADVISORY SERVICES AND ENHANCING THE COST PLUS MARK- UP FROM 17.41% TO 52.42%, THEREBY MAKING AN UPWARD TRANSFER PRICING ADJUSTMEN T OF RS. 6,47,24,374/- 2. THE LD. A.O ERRED IN DETERMINING THE ARMS LENG TH PRICE OF THE INTERNATIONAL TRANSACTION UNDERTAKEN BY THE APPELLANT RELATING TO PROVISION OF NON-BINDING INVESTMENT ADVISORY SERVICES ON ACCOUNT OF THE FOLL OWING; A) REJECTING ALL THE COMPANIES SELECTED AS COMPARAB LES BY THE APPELLANT IN THE TRANSFER PRICING DOCUMENTATION ON THE BASIS THAT THEY ARE NOT COMPARABLE. B) REJECTING THE USE OF CONTEMPORANEOUS AND MULTIPL E YEAR DATE AVAILABLE FOR COMPUTING THE ALP AS ON THE DATE OF FILING OF R ETURN OF INCOME AND RELYING ONLY ON THE SINGLY YEAR DATA (I.E FOR THE YEAR ENDE D 31 MARCH 2011) FOR THE PURPOSE OF DETERMINING THE ALP C) CHERRY PICKING OF AN ADDITIONAL COMPANY AS COMPA RABLE WITHOUT FOLLOWING A SCIENTIFIC SEARCH PRICES, NAMELY, LADDE RUP CORPORATE ADVISORY PVT LTD. WHICH IS FUNCTIONALLY NOT COMPARABLE TO THE AP PELLANTS NON-BINDING INVESTMENT ADVISORY SERVICES; D) WITHOUT PREJUDICE TO THE ABOVE, NOT PROVIDING A DETAILED SEARCH PROCESS UNDERTAKEN IN IDENTIFYING THE COMPANY WHICH HAS BEE N ALLEGED TO BE COMPARABLE TO THE APPELLANT. E) NOT GRANTING THE APPELLANT THE BENEFIT OF WORKIN G CAPITAL ADJUSTMENT AND ADJUSTMENT OR DIFFERENCE TO RISK PROFILE. 3. THE LD. A.O ERRED IN INCORRECTLY COMPUTING THE I NTEREST LEVIED UNDER SECTION 234D OF THE ACT. 4. THE LD. AO ERRED IN INCORRECTLY COMPUTING INTERE ST RECEIVABLE UNDER SECTION 244A OF THE ACT. 3. AS A PERUSAL OF THE AFORESAID GROUNDS OF APPEAL REVEAL, ALTHOUGH MULTIPLE GROUNDS HAVE BEEN RAISED, BUT THE SOLITARY ISSUE IS AN ADDITION OF RS. 6,47,24,374/- MADE BY THE ASSESSING OFFICER WHILE DETERMINING THE ARMS LENGTH PRICE (IN SHORT THE A LP) OF THE INTERNATIONAL TRANSACTIONS ENTERED BY THE ASSESSEE WITH ITS ASSOCIATE ENTERPRISE. IN ORDER TO APPRECIATE THE CONTROVERSY BRIEF BACKGROUND OF THE CASE CAN BE SUMMARISED AS FOLLOWS. SBI MACQUARIE INFRASTRUCTURE MANAGEMENT PVT LTD. VS. DCIT 14(3)(2) MUMBAI ITA NO. 324/MUM/2016, AY. 2011-12. 3 4. THE ASSESSEE IS A COMPANY INCORPORATED UNDER THE COMPANIES ACT, 1956 AND IS A JOINT VENTURE BETWEEN MECQUARIE INDIA INFRASTRUCTURE MANAGEMENT HOLDINGS PTE. LIMITED, ST ATE BANK OF INDIA AND INTERNATIONAL FINANCE CORPORATION. THE ASSESSE E IS ENGAGED IN THE BUSINESS OF RENDERING NON-BINDING INVESTMENT AD VISORY SERVICES TO ITS ASSOCIATED ENTERPRISES IN RESPECT OF UNLISTED I NDIAN EQUITIES. THE SERVICES PROVIDED, INTER-ALIA, INCLUDE IDENTIFYING AND ANALYSING POTENTIAL INVESTMENT OPPORTUNITIES; EVALUATING AND MAKING RECOMMENDATIONS TO THE ASSOCIATED ENTERPRISE WITH R ESPECT TO INVESTMENT OPPORTUNITIES; MAKING RECOMMENDATIONS TO THE ASSOCIATE ENTERPRISE WITH RESPECT TO SPECIFIED INVESTMENTS; A ND, ANY OTHER ADVISORY SERVICES AS MAY BE REQUIRED FROM TIME TO T IME. FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD RECEIVED A CO NSIDERATION OF RS. 21,70,60,516/- FOR PROVIDING SUCH-LIKE SERVICES TO ITS ASSOCIATED ENTERPRISE, WHICH CONSTITUTED AN INTERNATIONAL TRA NSACTION WITHIN THE MEANING OF SEC. 92B OF THE ACT. THE ASSESSING OFFI CER REFERRED THE MATTER FOR DETERMINATION OF ALP OF SUCH INTERNATIO NAL TRANSACTION TO THE TRANSFER PRICING OFFICER (IN SHORT THE TPO) I N TERMS OF SEC. 92C(1) OF THE ACT. THE TPO VIDE AN ORDER DATED 27.01.2015 PASSED U/S 92CA(3) OF THE ACT HAS WORKED OUT AN ADJUSTMENT OF RS 9,22,89,891/- THAT WAS REQUIRED TO BE MADE IN ORDER TO BRING THE STATED VALUE OF THE INTERNATIONAL TRANSACTION TO THE LEVEL OF ALP. THE ASSESSING OFFICER PASSED A DRAFT ASSESSMENT ORDER PROPOSING THE AFORE SAID ADDITION TO THE RETURNED INCOME, AGAINST WHICH OBJECTION WAS RA ISED BY THE ASSESSEE BEFORE THE DISPUTE RESOLUTION PANEL I.E DR P. THE DRP PARTLY ACCEPTED THE OBJECTIONS OF THE ASSESSEE AND AS PER DIRECTIONS DATED 30.10.2015, IN TERMS OF WHICH THE ASSESSING OFFICER HAS PASSED THE FINAL ASSESSMENT ORDER U/S 143(3) R.W.S 143C(13) OF THE ACT DATED 18.12.2015, THE TRANSFER PRICING ADJUSTMENT HAS BEE N RE-DETERMINED SBI MACQUARIE INFRASTRUCTURE MANAGEMENT PVT LTD. VS. DCIT 14(3)(2) MUMBAI ITA NO. 324/MUM/2016, AY. 2011-12. 4 AT RS. 6,47,24,374/-, WHICH IS THE SUBJECT MATTER O F THE APPEAL BEFORE US. 5. IN THE ABOVE BACKGROUND, THE LD. AR FOR THE ASSE SSEE HAS MADE TWO SPECIFIC PLEAS-FIRSTLY, THAT THE INCOME-TAX AUT HORITIES HAVE WRONGLY INCLUDED M/S LADDERUP CORPORATE ADVISORY PRIVATE LI MITED AS A COMPARABLE AS THE SAME IS FUNCTIONALLY INCOMPARABLE . SECONDLY, THAT THE CONCERNS SELECTED BY THE ASSESSEE AS COMPARABLE S HAS BEEN WRONGLY EXCLUDED BY THE INCOME TAX AUTHORITIES, SUC H CONCERNS BEING: (1) ICRA MANAGEMENT CONSULTING SERVICES LIMITED; (2) ICRA ONLINE LIMITED; (3) IDC (INDIA) LIMITED; (4) INFORMED TECHNOLOGIES LIMITED; (5) INTEGRATED CAPITAL SERVICES LIMITED. 6. IN ORDER TO APPRECIATE THE PLEAS OF THE LD. REPR ESENTATIVE, IT WOULD SUFFICE TO NOTE THAT THERE IS NO DIFFERENCE B ETWEEN ASSESSEE AND THE REVENUE SO FAR AS THE SELECTION OF THE METHOD F OR BENCHMARKING OF THE INTERNATIONAL TRANSACTION IS CONCERNED. THE AS SESSEE AS WELL AS THE REVENUE HAVE ADOPTED THE TRANSACTIONAL NET MAR GINAL METHOD (TNMM) AS THE MOST APPROPRIATE METHOD FOR BENCHMARK ING THE INTERNATIONAL TRANSACTION OF PROVISION OF NON-BINDI NG INVESTMENT ADVISORY SERVICES. THERE IS ALSO NO DISPUTE SO FAR AS CALCULATION OF ASSESSEES OPERATING MARGIN ON COST IS CONCERNED I. E 17.41%. THOUGH IN THE TRANSFER PRICING STUDY ASSESSEE HAD SELECTED A SET OF COMPARABLES AND DETERMINED THEIR MARGINS BASED ON M ULTIPLE YEARS FINANCIAL DATA BUT, DURING THE PROCEEDINGS BEFORE T HE TPO, THE ASSESSEE FURNISHED REVISED MARGINS OF SUCH COMPARAB LES BASED ON THEIR SINGLE YEARS FINANCIAL DATA. THIS ASPECT IS ALSO NOT DISPUTE. BEFORE THE TPO, ASSESSEE ASSERTED THAT THE FOLLOWIN G FIVE CONCERNS SBI MACQUARIE INFRASTRUCTURE MANAGEMENT PVT LTD. VS. DCIT 14(3)(2) MUMBAI ITA NO. 324/MUM/2016, AY. 2011-12. 5 WERE GOOD COMPARABLES WHOSE ARITHMETIC MEAN OF MARG IN BASED ON THE SINGLE YEARS FINANCIAL DATE CAME TO 13.24%. MARGINS OF ASSESSEES COMPARABLES (SINGLE YEAR DAT A) NAME OF THE COMPARABLE COMPANY ARITHMET IC MEAN ICRA MANAGEMENT CONSULTING SERVICES LIMITED 15.90% ICRA ONLINE LIMITED 22.32% IDC (INDIA) LIMITED 10.33% INFORMED TECHNOLOGIES 11.70% INTEGRATED CAPITAL SERVICES LIMITED 5.95% ARITHMETIC MEAN 13.24 7. BASED ON THE AFORESAID ANALYSIS, ASSESSEE ASSERT ED THAT THE ARITHMETIC MEAN OF THE COMPARABLES WAS WITHIN THE + /- 5% VARIATION AND THUS NO ADJUSTMENT WAS REQUIRED TO BE MADE TO T HE STATED VALUE OF THE INTERNATIONAL TRANSACTIONS. HOWEVER, THE TP O REJECTED THE CONCERNS SELECTED BY THE ASSESSEE AS COMPARABLES AN INSTEAD ADOPTED TWO CONCERNS, NAMELY (1) M/S LADDERUP CORPORATE ADV ISORY PRIVATE LIMITED 52.42%; AND, (2) MOTHILAL INVESTMENT OSWA L INVESTMENT ADVISORY PVT LTD., - 82.23% AS COMPARABLES, WHOSE A RITHMETIC MEAN WAS WORKED OUT AT 57.33%. SINCE THEN, THE DRP HAS ACCEPTED THE PLEA OF THE ASSESSEE FOR EXCLUSION OF MOTILAL OSWAL INVE STMENT ADVISORY PVT LTD, THEREFORE WE DO NOT DEAL ANY FURTHER ON THIS A SPECT. 8. BEFORE US, THE LD. AR FOR THE ASSESSEE POINTED O UT THAT M/S LADDERUP CORPORATE ADVISORY PRIVATE LIMITED IS FUNC TIONALLY IN- COMPARABLE TO THE ACTIVITIES RENDERED BY THE ASSESS EE TO ITS ASSOCIATED ENTERPRISE AND THEREFORE THE SAME IS NOT A GOOD COM PARABLE. IN THIS CONTEXT, HE HAS REFERRED TO THE DECISION OF THE MUM BAI BENCH OF THE TRIBUNAL IN THE CASE OF TEMASEK HOLDINGS ADVISORS I NDIA (P) LTD., [2017] 87 TAXMANN.COM 168, WHEREIN IN THE CASE OF A SIMILARLY PLACED SBI MACQUARIE INFRASTRUCTURE MANAGEMENT PVT LTD. VS. DCIT 14(3)(2) MUMBAI ITA NO. 324/MUM/2016, AY. 2011-12. 6 ASSESSEE, M/S LADDERUP CORPORATE ADVISORY PRIVATE L IMITED HAS NOT BEEN FOUND TO BE A GOOD COMPARABLE. IT WAS ALSO PO INTED OUT THAT SUBSEQUENTLY FOR THE VERY SAME ASSESSMENT YEAR THE DECISION OF THE TRIBUNAL IN THE CASE TEMASEK HOLDINGS ADVISORS (I) P. LTD., (SUPRA) WAS ALSO FOLLOWED AND APPLIED BY THE TRIBUNAL IN THE CA SE OF DCIT VS. GENERAL ATLANTIC (P.) LTD., [2018] 91 TAXMANN.COM 4 06 (MUMBAI), WHEREIN ALSO THE BENCH WAS CONSIDERING AN ASSESSEE WHO WAS RENDERING NON-BINDING INVESTMENT ADVISORY SERVICES TO ITS ASSOCIATED ENTERPRISE. 9. ON THE ASPECT OF EXCLUSION OF M/S LADDERUP CORPO RATE ADVISORY PRIVATE LIMITED, THE LD. DR APPEARING FOR THE REVEN UE HAS NOT DISPUTED THE FACTUAL MATRIX BROUGHT OUT BY THE LD. REPRESENTATIVE REGARDING THE PRECEDENTS, BUT REITERATED THE STAND OF THE TPO AND THE DRP. ACCORDING TO HER, THE RELEVANT DISCUSSION IN THE ORDER OF THE TPO AS WELL AS THAT OF THE DRP NOTES THAT THE SAID CONC ERN IS RECEIVING INCOME BY WAY OF ADVISORY FEE AND THEREFORE IT WAS A GOOD COMPARABLE. OUR ATTENTION HAS ALSO BEEN INVITED TO THE DISCUSSI ON IN PARA 6.1.12 OF THE ORDER OF THE TPO TO SAY THAT THE ANNUAL ACCOUNT S OF THE SAID CONCERN ALSO MENTION THAT IT WAS OPERATING IN ONE B USINESS SEGMENT, VIZ FINANCIAL AND MANAGEMENT CONSULTANCY. IT WAS T HEREFORE CONTENDED BY THE LD. DR THAT THE SAID CONCERN WAS N OT RENDERING GENERAL CONSULTANCY SERVICES BUT IT WAS PROVIDING F INANCIAL CONSULTANCY, WHICH IS COMPARABLE TO THE INSTANT SER VICES RENDERED BY THE ASSESSEE TO ITS ASSOCIATED ENTERPRISE. 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS WITH R EGARD TO THE EXCLUSION OF M/S LADDERUP CORPORATE ADVISORY PRIVAT E LIMITED, AND FIND THAT FOR THE VERY ASSESSMENT YEAR IN QUESTION, THE TRIBUNAL HAS ALREADY CONSIDERED THE COMPARABILITY OF SUCH CONCER N VIZ-A-VIZ THE ACTIVITY OF RENDERING NON-BINDING INVESTMENT ADVISO RY SERVICES. FOR SBI MACQUARIE INFRASTRUCTURE MANAGEMENT PVT LTD. VS. DCIT 14(3)(2) MUMBAI ITA NO. 324/MUM/2016, AY. 2011-12. 7 A.Y 2011-12, WHICH IS ALSO THE YEAR BEFORE US, THE TRIBUNAL CASE OF TEMASEK HOLDINGS ADVISORS (I) P. LTD. (SUPRA), CONS IDERED THE COMPARABILITY OF M/S LADDERUP CORPORATE ADVISORY PR IVATE LIMITED TO A CONCERN WHICH WAS RENDERING NON-BINDING INVESTMEN T ADVISORY SERVICES, AND THE RELEVANT DISCUSSION IN THE ORDER OF THE TRIBUNAL READS AS UNDER: 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 PRIVAT E LIMITED AS A COMPARABLE BY THE TPO, WHICH THEREAFTER HAD BEEN UPH ELD BY THE DRP, THEREIN SUBMITTED THAT THE AFORESAID COMPANY WAS FU NCTIONALLY 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 P ROFIT AND LOSS ACCOUNT OF THE SAID COMPARABLE (PAGE 322 OF APB) AND THE SCHEDULE FORMING PART OF THE SAME (PAGE 329 ), WHICH REVEALED THAT THE MAIN SOURCE OF THE SAID COMPARABLE WAS BY WAY OF FINANCIAL AND MANAGEMENT CO NSULTANCY FEES, AND THUS WAS ENTIRELY DIFFERENT FROM THE ACTIVITIES OF THE ASSESSEE COMPANY WHICH WAS NOT INTO THE BUSINESS OF MANAGING ANYBODY S FINANCES. THE LD. A.R FURTHER DREW OUR ATTENTION TO THE CASH FLOW ST ATEMENT OF THE AFORESAID COMPARABLE FOR THE YEAR UNDER CONSIDERATION (PAGE 3 23 ), SCHEDULE 16 WHICH FORMED PART OF THE ACCOUNTS FOR THE YEAR (PAG E 330 ) AND SEGMENT INFORMATION (PAGE 334 ), WHICH THEREIN DID GO TO FORTIFY THE CLAIM OF THE ASSESSEE THAT THE AFORESAID COMPARABLE WAS INTO FI NANCIAL AND MANAGEMENT CONSULTANCY. THE LD. A.R FURTHER REFERRIN G TO THE COMPANIES GENERAL BUSINESS PROFILE (PAGE 338 ) THEREIN SUBMITTED THAT THE AFORESAID COMAPARABLE, VIZ. M/S. LADDERUP CORPORATE ADVISORY PRI VATE LIMITED, UNLIKE THE ASSESSEE COMPANY WAS ENGAGED IN THE BUSI NESS OF FINANCIAL AND MANAGEMENT CONSULTANCY. THE LD. A.R FURTHER DRE W OUR ATTENTION TO THE INFORMATION ABOUT THE AFORESAID COMPARABLE AS H AD BEEN 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 WAS FOR MED IN 2007 AS A SUBSIDIARY COMPANY OF M/S. LADDERUP FINANCE LIMITED, AND WAS ENGAGED IN THE BUSINESS OF INVESTMENT BANKING. IT WAS SUBMIT TED BY THE LD. A.R THAT THE AFORESAID DOWNLOADED 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 T HE BACKDROP OF THE AFORESAID FACTUAL MATRIX, IT WAS SUBMITTED BY THE LD . A.R THAT IT STOOD REVEALED BEYOND ANY SCOPE OF DOUBT THAT THE AFORES AID COMPARABLE, VIZ. M/S. LADDERUP CORPORATE ADVISORY PRIVATE LIMITED WAS INTO INVESTMENT SBI MACQUARIE INFRASTRUCTURE MANAGEMENT PVT LTD. VS. DCIT 14(3)(2) MUMBAI ITA NO. 324/MUM/2016, AY. 2011-12. 8 BANKING BUSINESS, WHICH BY NO MEANS COULD BE COMPA RED WITH THE INVESTMENT ADVISORY BUSINESS AS THAT OF THE ASSES SEE COMPANY. THE LD. A.R RELYING ON THE ORDER OF THE TRIBUNAL SO PASSED I N THE CASE OF GENERAL ATLANTIC (P) LIMITED VS. DCIT, CIRCLE 3(1), MUMBAI (2013) 32 TAXMANN.COM 178 (MUMBAI 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 TAXMANN.COM 88 (PAGE 98-101 OF APB), THEREIN SUBMITTED THAT PURSUANT TO THE AFORESAID JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT , THE ISSUE THAT AN INVESTMENT ADVISOR CANNOT BE COMPAR ED TO A MERCHANT BANKER IS NO MORE RES-INTEGRA. IT WAS THUS SUBMITT ED BY THE LD. A.R THAT NOW WHEN THE AFORESAID 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 COMPARABLE AND THUS WAS LIABLE TO BE EXCLUDED FROM THE FINAL LIST OF THE COMPARABLES. THAT ON THE OTHER HAND THE LD. D.R SUBMIT TED THAT AS PER THE ANNUAL REPORT OF THE AFORESAID COMPARABLE, THE LAT TER WAS IN THE BUSINESS OF CORPORATE ADVISORY SERVICES AND HAD RECEIVED ADV ISORY FEES. IT WAS SUBMITTED BY THE LD. D.R THAT THE AFORESAID COMPARAB LE, VIZ. LADDERUP CORPORATE ADVISORY SERVICES LIMITED HAD RECEIVED ME RCHANT BANKING REGISTRATION IN THE MONTH OF JULY, 2010 FROM SEBI, BU T NO ACTUAL INCOME WAS RECEIVED FROM THE SAID ACTIVITY. THUS IN THE BA CKDROP OF THE AFORESAID FACTS IT WAS SUBMITTED BY THE LD. D.R THAT THE AFORES AID 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 COMPARABLE, IT STOOD REVEALED THAT THE SAID COMPARAB LE WAS PROVIDING ADVISORY FUNCTIONS ON RESTRUCTURING LIKE THE ASSESS EE, AS WELL AS PROVIDING ADVISORY SERVICES ON ACQUISITION, I.E IN THE MANNER T HE ASSESSEE COMPANY HELPED ITS AE IN CARRYING OUT ACQUISITIONS. IT WAS T HUS SUBMITTED BY THE LD. D.R THAT THE FUNCTIONS OF THE AFORESAID COMPARABLE, V IZ. LADDERUP CORPORATE ADVISORY SERVICES LIMITED WERE SIMILAR TO THAT OF THE ASSESSEE COMPANY, AND AS SUCH AFTER THOROUGH VETTING AND VERI FICATION OF THE SAID FUNCTIONAL COMPARABILITY THE SAME HAD BEEN INCLUDED IN THE 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 PASS ED BY A COORDINATE BENCH OF THE TRIBUNAL, I.E ITAT, DELHI, IN THE CASE OF AVENUE ASIA ADVISORS PRIVATE LIMITED VS. DCIT, CIRCLE 2(1), NE W DELHI, A.Y. 2009- 10 , WHEREIN THE TRIBUNAL REFERRING TO THE AFORESAID CO MPARABLE, VIZ. LADDERUP CORPORATE ADVISORY SERVICES LIMITED, HAD TH EREIN 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 YEAR IT WAS NOT ENGAGED IN MERCHANT BANKING ACTIVITIES. IT WAS THUS IN THE BACKDROP OF THE AFORE SAID FACTS SUBMITTED BY THE LD. D.R THAT THE AFORESAID COMPARABLE WAS NOT EN GAGED IN MERCHANT SBI MACQUARIE INFRASTRUCTURE MANAGEMENT PVT LTD. VS. DCIT 14(3)(2) MUMBAI ITA NO. 324/MUM/2016, AY. 2011-12. 9 BANKING ACTIVITIES DURING THE YEAR UNDER CONSIDERAT ION AND HAD RIGHTLY BEEN INCLUDED BY THE TPO IN THE FINAL LIST OF THE COMPAR ABLES. 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 RECORD BEFORE US. WE HAVE GIVEN A THOUGHTFUL CONS IDERATION TO THE FACTS OF THE CASE AND FIND THAT THE AFORESAID COMPARABLE, VIZ. LADDERUP CORPORATE ADVISORY PVT. LIMITED IS REGISTERED AS A CATEGORY ONE MERCHANT BANKING WITH SEBI AND IS ENGAGED IN RENDERING MERCH ANT 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 THAT THE AFORESAID COMPA RABLE IS ENGAGED IN THE MERCHANT BANKING/INVESTMENT BANKING AND OTHER SIMIL AR ACTIVITIES, ARE OF THE CONSIDERED VIEW THAT THE SAME CANNOT BE CONSIDE RED AS FUNCTIONALLY COMPARABLE TO THE ASSESSEE COMPANY WHICH IS ENGAGED IN THE BUSINESS OF RENDERING NON BINDING INVESTMENT ADVISORY SERVICES. WE ARE FURTHER NOT IMPRESSED BY THE AVERRMENT OF THE LD. D.R WHO BY REF ERRING TO THE OBSERVATIONS RECORDED BY THE COORDINATE BENCH OF TH E TRIBUNAL IN THE CASE OF AVENUE ASIA (SUPRA) HAD THEREIN AVERRED THAT THO UGH THE AFORESAID COMPARABLE WAS PLANNING TO EXPAND ITS WINGS BY VENT URING INTO MERCHANT BANKING ACTIVITIES AND BROADEN ITS HORIZON, WHICH R EVEALED THAT DURING THE YEAR IT WAS NOT ENGAGED IN MERCHANT BANKING ACTIVIT IES, HAD THEREIN TRIED TO DRIVE HOME HIS CONTENTION THAT THE AFORESAID COM PARABLE WAS NOT INVOLVED IN MERCHANT BANKING ACTIVITIES. WE ARE OF T HE CONSIDERED VIEW THAT THE AFORESAID OBSERVATIONS OF THE COORDINATE BENCH OF THE TRIBUNAL WERE RECORDED IN CONTEXT OF A.Y. 2009-10 INVOLVED IN THE C ASE BEFORE THEM, WHILE FOR THE YEAR BEFORE US IN THE PRESENT APPEAL IS A.Y. 2011-12. THUS THE CASE LAW RELIED UPON BY THE LD. D.R IS DISTINGUISHABLE O N FACTS, AND AS SUCH FOR THE FOREGOING REASON WOULD BE OF NO ASSISTANCE TO H IM TO SUPPORT HIS AFORESAID CONTENTION. THAT IN THE BACKDROP OF THE AF ORESAID FACTS AS HAD BEEN BROUGHT TO OUR NOTICE, AND AS SUCH ARE IRREBUTT ABLY SUPPORTED BY THE RECORDS PRODUCED BEFORE US, WE HOLD A STRONG CONVICT ION THAT NOW WHEN THE AFORESAID COMPARABLE, VIZ. LADDER UP CORPORATE ADVISO RY PVT. LTD. IS ENGAGED IN MERCHANT BANKING/INVESTMENT BANKING AND OTHER SIMILAR ACTIVITIES DURING THE YEAR UNDER CONSIDERATION, THER EFORE, THE SAME CANNOT BE CONSIDERED AS FUNCTIONALLY COMPARABLE TO THE ASS ESSEE COMPANY WHICH IS ENGAGED IN RENDERING NON BINDING INVESTMENT ADVI SORY SERVICES. WE THUS ARE PERSUADED TO SUBSCRIBE TO THE CONTENTION OF THE LD. A.R THAT THE AFORESAID COMPARABLE, VIZ. LADDER UP CORPORATE ADVISO RY PVT. LTD. IS FUNCTIONALLY INCOMPARABLE TO THE ASSESSEE COMPANY A ND HAD WRONGLY BEEN INCLUDED BY THE AO/TPO IN THE FINAL LIST OF TH E COMPARABLES. WE THUS IN LIGHT OF OUR AFORESAID OBSERVATIONS DIRECT THE A O/TPO TO EXCLUDE THE SBI MACQUARIE INFRASTRUCTURE MANAGEMENT PVT LTD. VS. DCIT 14(3)(2) MUMBAI ITA NO. 324/MUM/2016, AY. 2011-12. 10 AFORESAID COMPARABLE, VIZ. LADDERUP CORPORATE ADVISOR Y PVT. LTD. FROM THE FINAL LIST OF COMPARABLES. 11. THE AFORESAID DISCUSSION WOULD SHOW THAT THE TR IBUNAL HAS TAKEN INTO CONSIDERATION THE ARGUMENTS OF THE REVEN UE, WHICH ARE SIMILAR TO THE CASE MADE OUT BY THE TPO IN THE INST ANT CASE. SUBSEQUENTLY, EVEN IN THE CASE OF M/S GENERAL ATLAN TIC PVT LTD (SUPRA) FOR A.Y 2011-12 THE TRIBUNAL REITERATED ITS EARLIER STAND AND HELD THAT M/S LADDERUP CORPORATE ADVISORY PRIVATE LIMITED IS NOT COMPARABLE TO A CONCERN WHICH IS RENDERING NON-BINDING INVESTMENT ADVISORY SERVICES. 12. IN VIEW OF THE AFORESAID PRECEDENTS WHICH CLEAR LY HOLD THE FIELD AS THEY HAVE BEEN RENDERED UNDER SIMILAR CIRCUMSTANCES , WE FIND THAT THE ACTION OF THE INCOME-TAX AUTHORITIES OF INCLUDI NG M/S LADDERUP CORPORATE ADVISORY PRIVATE LIMITED IN THE SET OF CO MPARABLES IS UNTENABLE. WE HOLD SO. 13. THE NEXT POINT SOUGHT TO BE MADE OUT BY THE ASS ESSEE IS FOR INCLUSION OF ICRA ONLINE LTD IN THE FINAL SET OF CO MPARABLES. PERTINENTLY, THE SAID CONCERN HAS BEEN EXCLUDED BY THE INCOME-TAX AUTHORITIES ON THE GROUND THAT THE SAME IS FUNCTION ALLY INCOMPARABLE AS IT PROVIDES CONSULTANCY SERVICES PERTAINING TO S OFTWARE SERVICES, KPO SERVICES, ITES SERVICES, ETC. THOUGH THE LD. R EPRESENTATIVE HAS PLEADED FOR ITS INCLUSION, BUT THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF AGM INDIA ADVISORS INDIA PVT LTD., VS. DCIT , MUMBAI IN ITA NO. 4757/MUM/2015 VIDE ORDER DATED 18.05.2016 HAS H ELD THAT SUCH CONCERN IS NOT COMPARABLE TO A CONCERN UNDERTAKING ACTIVITY OF RENDERING NON-BINDING INVESTMENT ADVISORY SERVICES. FOLLOWING THE SAID PRECEDENT WE HEREBY DECLINE TO INTERFERE AND U PHOLD THE ACTION OF SBI MACQUARIE INFRASTRUCTURE MANAGEMENT PVT LTD. VS. DCIT 14(3)(2) MUMBAI ITA NO. 324/MUM/2016, AY. 2011-12. 11 THE LOWER AUTHORITIES IN EXCLUDING ICRA ONLINE LTD, FROM THE FINAL SET OF COMPARABLES. 14. THE NEXT POINT RAISED BY THE ASSESSEE IS FOR IN CLUSION OF INTEGRATED CAPITAL SERVICES LIMITED, A CONCERN WHIC H HAS BEEN EXCLUDED BY THE INCOME TAX AUTHORITIES ON THE BASIS OF ITS FUNCTIONAL INCOMPARABILITY. REFERRING TO THE ORDER OF THE DRP , THE LD. DR HAD POINTED OUT THAT SUCH CONCERN RENDERS ADVISORY AND CONSULTING SERVICES IN AREA OF MERGERS, ACQUISITION AND RECONS TRUCTION, AND IS ENGAGED IN THE BUSINESS OF TRADING OF SHARES AND SP ECULATION BUSINESS. 15. ON THIS ASPECT ALSO, WE DO NOT FIND ANY JUSTIFI ABLE REASONS TO INTERFERE WITH THE STAND OF THE INCOME TAX AUTHORIT IES IN VIEW OF THE DECISION OF THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF NEW SILK ROUTE ADVISORS PRIVATE LTD., VS. DCIT IN ITA NO. 13 27/MUM/2014 DATED 20.02.2014, WHEREIN IN THE CASE OF A SIMILAR LY PLACED ASSESSEE, INVOLVED IN RENDERING NON-BINDING INVESTMENT ADVISO RY SERVICES, THE SAID CONCERN HAS BEEN FOUND TO BE INCOMPARABLE. FO LLOWING THE AFORESAID PRECEDENT, ON THIS ASPECT ALSO, WE HEREBY CONFIRM THE STAND OF THE LOWER AUTHORITIES AND ASSESSEE FAILS ON THIS ASPECT. 16. THE THIRD POINT RAISED BY THE LD. REPRESENTATIV E WAS FOR INCLUSION OF ICRA MANAGEMENT CONSULTING SERVICES LT D., WHICH ACCORDING TO HIM, HAS BEEN UNJUSTLY EXCLUDED BY THE INCOME-TAX AUTHORITIES. IN THIS CONTEXT, IT HAS BEEN POINTED OUT BY THE LD. DR THAT THE SAID CONCERN HAS BEEN REJECTED ON THE BASIS OF FUNCTIONAL INCOMPARABILITY IN AS MUCH AS THE SAID CONCERN WAS ENGAGED IN MARKETING AND CLIENT MANAGEMENT INITIATIVE RENDERIN G FINANCIAL SERVICES. BY REFERRING TO THE DISCUSSION IN THE OR DER OF TPO, IT IS SBI MACQUARIE INFRASTRUCTURE MANAGEMENT PVT LTD. VS. DCIT 14(3)(2) MUMBAI ITA NO. 324/MUM/2016, AY. 2011-12. 12 POINTED OUT THAT THE SAID CONCERN IS ALSO PROVIDING MANAGEMENT CONSULTING ADVISORY SERVICES, AND THUS IT IS NOT A GOOD COMPARABLE. 17. ON THIS ASPECT, THE POINT MADE OUT BY THE LD. R EPRESENTATIVE IS THAT THE OBJECTIONS RAISED BY THE LOWER AUTHORITIES HAVE BEEN CONSIDERED BY THE TRIBUNAL IN THE CASE OF TEMASEK H OLDINGS ADVISORS (I) P. LTD., (SUPRA), WHEREIN THE SAID CONCERN HAS BEEN FOUND TO BE A GOOD COMPARABLE. THE RELEVANT DISCUSSION IN THE OR DER OF THE TRIBUNAL DATED 11.08.2017 (SUPRA) HAS BEEN REFERRED TO, WHIC H IS REPRODUCED HEREUNDER: 8 . THE LD. A.R ASSAILING THE REJECTION OF M/S. ICRA M ANAGEMENT CONSULTANCY SERVICES LIMITED BY THE TPO, WHICH THERE AFTER 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 LD. A.R T HAT THE DRP HAD UPHELD THE REJECTION OF THE AFORESAID COMPARABLE BY THE TP O FOR THE REASON THAT HIS PREDECESSOR IN THE CASE OF THE ASSESSEE FOR THE IMM EDIATELY 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 UP HOLDING OF THE REJECTION OF THE AFORESAID COMPARABLE, VIZ. ICRA MANAGEMENT CON SULTANCY SERVICES LIMITED DURING THE YEAR UNDER CONSIDERATION WAS ONL Y SUPPORTED BY THE OBSERVATIONS RECORDED BY THE DRP IN RESPECT OF THE SAID COMPARABLE IN THE CASE OF THE ASSESSEE FOR THE IMMEDIATELY PRECEDING YEAR, VIZ. A.Y. 2010-11, AND NOT ON THE BASIS OF ANY NEW FACTS. THE LD. A.R RE FERRING TO THE AFORESAID OBSERVATIONS OF THE DRP SUBMITTED 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 1 4(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, VI Z. ICRA MANAGEMENT CONSULTANCY SERVICES LIMITED WAS A GOOD COMPARABLE QUA THE FUNCTIONS OF THE ASSESSEE, AND AS SUCH HAD DIRECTED THAT IT BE I NCLUDED IN THE LIST OF THE FINAL COMPARABLES. THE LD. A.R DREW OUR ATTENTION TO PAGE NO. 53 OF THE APB, WHEREIN THE TRIBUNAL WHILE DISPOSING OF THE APP EAL OF THE ASSESSEE FOR A.Y. 2010-11 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 PERFORMED BY ICRA. HENCE ON FUNCTIONAL LEV EL IT IS A GOOD SBI MACQUARIE INFRASTRUCTURE MANAGEMENT PVT LTD. VS. DCIT 14(3)(2) MUMBAI ITA NO. 324/MUM/2016, AY. 2011-12. 13 COMPARABLE. AS STATED EARLIER, IN THE EARLIER YEARS, THE TPO HAS ACCEPTED ICRA TO BE A COMPARABLE AND IN LATER YEARS THE TRIBUNAL IN A.YS 2008-09 & 2009-10 HAS HELD ICRA MANAGEMENT TO B E GOOD COMPARABLE QUA THE FUNCTIONS OF THE ASSESSEE AND TH ERE BEING NO MATERIAL CHANGE ON FACTS, FUNCTIONAL PROFILE OR A NY OTHER FACTOR IN THIS YEAR, THEN AS MATTER OF CONSISTENCY, WE DO NOT WANT TO DEVIATE FROM OUR FINDINGS GIVEN IN THE EARLIER YEARS. THERE CANNOT BE A PICK AND CHOOSE OF COMPARABLES EVERY YEAR UNLESS THERE A RE SOME MATERIAL DIFFERENCE IN FACTS AND CIRCUMSTANCES COMP ELLING TO TAKE A DIFFERENT CONCLUSION. THUS, WE HOLD THAT ICRA MANAGEM ENT IS A GOOD COMPARABLE AND SHOULD BE INCLUDED IN THE LIST OF FINAL CO MPARABLES. IT WAS FURTHER SUBMITTED BY THE LD. A.R THAT IN THE E ARLIER YEARS THE TPO HAD HIMSELF ACCEPTED ICRA MANAGEMENT CONSULTANCY SERVIC ES LIMITED AS A COMPARABLE, WHILE FOR IN THE LATER YEARS, VIZ. A.Y. 2008 -09 AND 2009-10 THE TRIBUNAL HAD HELD THE AFORESAID COMPANY TO BE A GOO D COMPARABLE. THE LD. A.R IN SUPPORT OF HIS AFORESAID CONTENTION THEREIN D REW OUR ATTENTION TO THE OBSERVATIONS OF THE COORDINATE BENCH OF THE TRIBUNA L RECORDED IN THE CASE OF THE ASSESSEE FOR A.Y. 2007-08 AND 2008-09, REPORTED AS TEMASEK HOLDING ADVISORS (I) PRIVATE LIMITED VS. DCIT 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 DISPOSIN G OF THE APPEAL OF THE REVENUE, 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 AFORE SAID FACTUAL POSITION AVERRED BY THE LD. A.R THAT THE A.O/TPO WITH OUT PLACING ON RECORD ANY MATERIAL WHICH COULD GO TO PROVE THAT THE AFORE SAID COMPARABLE ,VIZ. ICRA MANAGEMENT CONSULTANCY 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 ARBITRARILY 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 THE AFORESAID COMPARABLE AS A GAINST THAT OF THE ASSESSEE COMPANY DURING THE YEAR UNDER CONSIDERATION WAS CON CEDEDLY THE SAME AS IN THE A.Y. 2010-11, AND DREW OUR ATTENTION TO PAGE 9-10 OF THE TPO ORDER FOR THE AFORESAID PRECEDING YEAR, I.E A.Y. 2010-11 (COPY PLACE D ON RECORD). IT WAS THUS SUBMITTED BY THE LD. A.R THAT NOW WHEN THE FACTS INVO LVED IN CONTEXT OF THE AFORESAID COMPARABLE DURING THE YEAR UNDER CONSIDER ATION 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 TRIBUNAL AS A GOOD COMPARABLE, COUPLED WITH THE FACT THAT EVEN IN THE PRECEDING YE ARS ALSO IT WAS ACCEPTED AS A COMPARABLE, THEREFORE, IN THE ABSENCE OF ANY SUBSTA NTIAL VARIANCE, EITHER FUNCTIONALLY OR OTHERWISE DURING THE YEAR UNDER CON SIDERATION, THE SAID SBI MACQUARIE INFRASTRUCTURE MANAGEMENT PVT LTD. VS. DCIT 14(3)(2) MUMBAI ITA NO. 324/MUM/2016, AY. 2011-12. 14 COMPARABLE COULD NOT BE SUMMARILY REJECTED. THE LD. A .R FURTHER SUBMITTED THAT THE ORDER OF THE ITAT, MUMBAI IN THE CASE OF TH E ASSESSEE FOR A.Y. 2008- 09 WHEREIN ICRA MANAGEMENT CONSULTANCY SERVICES LIM ITED 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 HONBLE HIGH COURT. IT WAS FURTHER AVERRED BY THE L D. 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 C OMPARABLE, SPECIFICALLY TAKING NOTE OF THE FACT THAT IT WAS ACCEPTED AS SUC H BY THE TPO IN THE EARLIER YEAR AS WELL AS IN THE SUCCEEDING YEAR. IT WAS AVERR ED BY THE 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 G OOD COMPARABLE, AFTER DELIBERATING ON THREE ISSUES, VIZ. (I). SKILL TESTS (I I). FUNCTIONAL COMPARABILITY AND (III). CONSISTENCY. THE LD. A.R REFERRING TO THE J UDGMENT 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 SUBMITTED THAT IT WAS HELD BY THE HIGH COURT THAT A BROAD COM PARABILITY ON INDUSTRY BASE WAS NOT TO BE PERMITTED, AND AS SUCH HIGH END A ND LOW END CANNOT BE COMPARED. THE LD. A.R TOOK US THROUGH THE RELEVANT EXT RACTS OF THE ORDER PASSED BY THE TRIBUNAL IN ITS CASE FOR A.Y. 2010-11, AND THEREIN AVERRED THAT THE TRIBUNAL AFTER DELIBERATING AT LENGTH HAD HELD ICRA MANAGEMENT CONSULTANCY SERVICES LIMITED AS FUNCTIONALLY COMPAR ABLE. IT WAS SUBMITTED BY THE LD. A.R THAT THERE CANNOT BE CHERRY PICKING OF C OMPARABLES, AND UNLESS SOME MATERIAL DIFFERENCE HAD ARISEN DURING THE YEAR UNDER CONSIDERATION AS IN COMPARISON TO THE EARLIER YEAR, THE SAME COULD NOT BE WHIMSICALLY REJECTED AS A COMPARABLE. THE LD. A.R AVERRED THAT A FRESH FILTE R CANNOT BE INTRODUCED FOR THE FIRST TIME BEFORE THE TRIBUNAL, BECAUSE IF THAT BE PERMITTED, THEN ALL THE COMPARABLES 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 CONSULTANCY SERVICES LIMITED HAD DULY BE EN APPRECIATED BY THE TRIBUNAL IN THE CASE OF THE ASSESSEE 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 THA T ICRA MANAGEMENT CONSULTANCY SERVICES LIMITED COULD NOT BE ACCEPTED AS A COMPARABLE, THEREIN RELIED ON THE ORDER OF THE ITAT, DELHI IN THE CASE O F MOTOROLA SOLUTION INDIA (P) LTD. VS. ACIT, 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 C ASE OF : MAERSK GLOBAL CENTRES (INDIA)(P). LTD. VS. ACIT (2014) 43 TAXMA NN. COM. 100 (MUMBAI TRIB) . THE LD. D.R DURING THE COURSE OF HEARING OF THE APPE AL AVERRED THAT FOR THE PURPOSE OF ADJUDICATING THE PRESENT APPEAL OF T HE ASSESSEE, THE EARLIER SBI MACQUARIE INFRASTRUCTURE MANAGEMENT PVT LTD. VS. DCIT 14(3)(2) MUMBAI ITA NO. 324/MUM/2016, AY. 2011-12. 15 ORDERS PASSED BY THE TRIBUNAL IN THE ASSESSES OWN C ASE CANNOT BE CHARACTERIZED AS A PRECEDENT. THE LD. D.R IN ORDER TO DRIVE HOME HIS AFORESAID CONTENTION, RELIED ON THE FOLLOWING JUDGMENTS OF THE 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) SC R 518 (III). FIDA HUSSAIN & OTHERS VS. MORADABAD DEV. AUTHORITY (2011) 12 SCC 615 (IV). EXECUTIVE ENGINEER, DHENKANAL MINOR IRRIGATIO N VS. N.C BUDHIRAJA (2001) 2 SCC 721 THE LD. D.R THUS ON THE BASIS OF MATERIAL PLACED ON R ECORD, THEREIN SUBMITTED THAT ICRA MANAGEMENT CONSULTANCY SERVICES LIMITED COULD NOT BE ACCEPTED AS A COMPARABLE AND HAD RIGHTLY BEEN EX CLUDED BY THE TPO AND UPHELD BY THE DRP. 9. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES FO R BOTH THE PARTIES, PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL PLACED ON RECORD. WE HAVE GIVEN A THOUGHTFUL CONSIDERATIO N TO THE FACTS OF THE CASE AND FIND THAT THE DRP AS A MATTER OF FACT RELY ING ON THE ORDER PASSED BY HIS PREDECESSOR IN THE CASE OF THE ASSESSEE FOR A.Y. 2010-11, WHEREIN THE REJECTION OF THE AFORESAID COMPARABLE, VIZ. ICRA MANAGEMENT CONSULTANCY SERVICES LIMITED BY THE TPO WAS UPHELD BY HIS PREDECESSOR, HAD MERELY GONE BY THE SAID VERY REASON AND UPHELD THE REJECTION OF THE SAID COMPARABLE DURING THE YEAR UNDER CONSIDERATION . WE FIND THAT THE REJECTION OF THE AFORESAID COMPARABLE BY THE AO/TPO IN A.Y. 2010-11 HAD BEEN SET ASIDE BY THE TRIBUNAL IN THE CASE OF THE A SSESSEE, 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 AN D HAD DIRECTED THE INCLUSION OF THE SAME IN THE LIST OF THE FINAL COMP ARABLES. WE ARE OF THE CONSIDERED VIEW THAT NOW WHEN THE ORDER OF THE AO/T PO IN THE CASE OF THE ASSESSEE FOR THE IMMEDIATELY PRECEDING YEAR, VIZ. A.Y . 2010-11, THEREIN EXCLUDING THE AFORESAID COMPARABLE, VIZ. ICRA MANAGEM ENT CONSULTANCY SERVICES LIMITED HAD BEEN SET ASIDE BY THE TRIBUNAL , THEREFORE, THE REJECTION OF THE SAID COMPARABLE, VIZ. ICRA MANAGEME NT CONSULTANCY SERVICES LIMITED BY THE A.O DURING THE YEAR UNDER C ONSIDERATION, PURSUANT SBI MACQUARIE INFRASTRUCTURE MANAGEMENT PVT LTD. VS. DCIT 14(3)(2) MUMBAI ITA NO. 324/MUM/2016, AY. 2011-12. 16 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 COUNT ITSELF. WE ARE FURTHER PER SUADED TO SUBSCRIBE TO THE CONTENTION OF THE LD. A.R THAT CHERRY PICKING OF THE COMPARABLES EVERY YEAR BY THE TPO, WITHOUT POINTING OUT THAT THE FACTS IN CONTEXT OF THE COMPARABLES ACCEPTED IN THE PRECEDING YEARS HAD CHA NGED DURING THE YEAR UNDER CONSIDERATION, CANNOT BE PERMITTED. WE FURTHER FIND THAT THE AFORESAID COMPARABLE, VIZ. ICRA MANAGEMENT CONSULTANC Y SERVICES LIMITED HAD ALSO BEEN HELD TO BE A GOOD COMPARABLE BY THE TRIBUNAL IN THE CASE OF THE ASSESSEE FOR A.Y(S). 2007-08, 2008-09 AND 2009-10, WHILE FOR IN THE EARLIER YEARS THE TPO HIMSELF HAD ACCEPTED T HE SAID COMPANY AS A COMPARABLE. WE FURTHER FIND THAT THE ORDER OF THE IT AT, MUMBAI IN THE CASE OF THE ASSESSEE FOR A.Y. 2008-09 WHEREIN ICRA MANAGE MENT CONSULTANCY SERVICES LIMITED WAS HELD TO BE A GOOD COMPARABLE, H AD BEEN UPHELD BY THE HONBLE HIGH COURT OF BOMBAY IN CIT-3 VS. TAEMASK HOLDINGS ADVISORS PVT. LTD (ITA NO. 1051 0F 2014); DT. 17.11 .2016. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE CONTENTIONS OF THE LD. D.R AND ARE NOT PERSUADED TO ACCEPT HIS CONTENTION THAT ICRA MA NAGEMENT CONSULTANCY SERVICES LIMITED WAS FUNCTIONALLY DIFFE RENT AS IN COMPARISON TO THE ASSESSEE BEFORE US. WE HAVE DELIBERATED ON TH E 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 PRECE DENT FOR FUTURE CASES. WE ARE OF THE CONSIDERED VIEW THAT THERE CANNOT BE A S ECOND VIEW ON THE SAID ASPECT, BUT THEN, AS HELD BY THE HONBLE APEX COURT, I F THE COURT DECIDES A CERTAIN ISSUE FOR A CERTAIN SET OF FACTS, THEN, THAT ISSUE STANDS DETERMINED FOR ANY OTHER MATTER ON THE SAME SET OF FACTS . WE ARE OF THE CONSIDERED VIEW THAT NOW WHEN THE LD. D.R HAD FAILED TO ESTABL ISH AS TO HOW THE FACTS INVOLVED IN THE PRESENT CASE ARE FOUND TO BE DISTIN GUISHABLE IN CONTEXT OF THE AFORESAID COMPARABLE, VIZ. ICRA MANAGEMENT CONSUL TANCY SERVICES LIMITED OR THE ASSESSEE IN THE YEAR BEFORE US, AS IN COMPARISON TO THOSE OF THE PRECEDING YEARS, THEREFORE, THE PRINCIPLE ENUNC IATED BY THE HONBLE APEX COURT IN THE AFORESAID CASES WOULD NOT ASSIST THE CASE OF THE DEPARTMENT. WE RATHER 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 CONSIDERATION, AS IN COM PARISON TO THE EARLIER YEARS, THEREFORE, THE AFORESAID PRINCIPLE SO LAID DO WN BY THE HONBLE SUPREME COURT WOULD GO TO SUPPORT THE CONTENTION OF THE ASSESSEE THAT IN CASE OF NO CHANGE 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. W E THUS IN THE BACKDROP OF OUR AFORESAID OBSERVATIONS ARE OF THE C ONSIDERED VIEW THAT NOW WHEN ICRA MANAGEMENT CONSULTANCY SERVICES LIMIT ED HAD BEEN HELD TO BE A GOOD COMPARABLE IN THE CASE OF THE ASSESSEE FOR THE PRECEDING YEARS BY THE TRIBUNAL, AND THE ORDER OF THE TRIBUNA L FOR A.Y. 2008-09 HAD SBI MACQUARIE INFRASTRUCTURE MANAGEMENT PVT LTD. VS. DCIT 14(3)(2) MUMBAI ITA NO. 324/MUM/2016, AY. 2011-12. 17 EVEN BEEN UPHELD BY THE HONBLE HIGH COURT OF BOMBAY WHILE DISMISSING THE APPEAL OF THE DEPARTMENT FOR A.Y. 2008 -09, THEREFORE, WE ARE NOT PERSUADED TO ACCEPT THE AFORESAID CONTENTIO NS OF THE LD. D.R. THUS IN THE TOTALITY OF THE AFORESAID FACTS, WE ARE OF TH E CONSIDERED VIEW THAT THERE IS NO REASON FOR US TO TAKE A VIEW DIVERGENT FROM THAT ARRIVED AT BY THE TRIBUNAL IN THE CASE OF THE ASSESSEE FOR THE PR ECEDING YEARS, AND THUS SET ASIDE THE ORDER OF THE AO/TPO REJECTING THE AFO RESAID COMPARABLE AND DIRECT THAT THE SAME BE INCLUDED IN THE FINAL LIST OF THE COMPARABLES. 18. IT WAS ALSO BROUGHT OUT THAT EVEN IN THE CASE OF M/S GENERAL ATLANTIC PVT LTD (SUPRA), THE TRIBUNAL VIDE ORDER D ATED 21.02.2018 UPHELD THE COMPARABILITY OF ICRA MANAGEMENT CONSULT ING SERVICES LTD IN THE CASE OF NON-BINDING INVESTMENT ADVISORY SERVICES. IN THE CASE OF M/S GENERAL ATLANTIC PVT LTD (SUPRA), THE TRIBUNAL FOLLOWED AN EARLIER DECISION OF THE TRIBUNAL IN THE CASE OF AGM INDIA ADVISORS PVT LTD VS. DCIT, IN ITA NO. 537/MUM/2016 DATED 04.01.2 017 WHICH WAS ALSO RENDERED IN RELATION TO A.Y 2011-12, I.E THE Y EAR BEFORE US. 19. WE HAVE CONSIDERED THE RIVAL STANDS AND FIND TH AT PLEA OF THE ASSESSEE IS SUPPORTED BY THE PRECEDENTS RENDERED BY THE MUMBAI BENCH OF THE TRIBUNAL UNDER SIMILAR CIRCUMSTANCES A ND THEREFORE WE DEEM IT FIT AND PROPER TO DIRECT THAT ICRA MANAGEME NT CONSULTING SERVICES LTD (SUPRA) BE ADOPTED AS A GOOD COMPARABL E. 20. APART FROM THE AFORESAID, ASSESSEE HAD PLEADED FOR INCLUSION OF IDC (INDIA) LTD AS WELL AS INFORMED TECHNOLOGIES LT D. HOWEVER, A PERTINENT PLEA WAS RAISED TO THE EFFECT THAT ONCE M /S LADDERUP CORPORATE ADVISORY PRIVATE LIMITED IS EXCLUDED AND ICRA MANAGEMENT CONSULTING SERVICES LTD., IS INCLUDED, THE RESULTAN T MARGIN OF THE COMPARABLES SHALL COMPARE FAVOURABLY WITH THE MARGI N OF THE ASSESSEE. SINCE WE HAVE ACCEPTED THE PLEAS OF THE ASSESSEE FOR EXCLUSION OF M/S LADDERUP CORPORATE ADVISORY PRIVAT E LIMITED AND INCLUSION OF ICRA MANAGEMENT CONSULTING SERVICES LT D, THE NECESSITY SBI MACQUARIE INFRASTRUCTURE MANAGEMENT PVT LTD. VS. DCIT 14(3)(2) MUMBAI ITA NO. 324/MUM/2016, AY. 2011-12. 18 FOR ADJUDICATION OF THE OTHER PLEAS FOR INCLUSION O F IDC (INDIA) LTD., AND INFORMED TECHNOLOGIES LTD HAS BEEN RENDERED ACADEMI C AND IS OBVIATED. THUS, FOR THE AFORESAID REASONS WE DO NO T DEAL ANY FURTHER. 21. IN VIEW OF THE AFORESAID DISCUSSION WE HEREBY D IRECT THE ASSESSING OFFICER TO RE-DETERMINE THE TOTAL INCOME OF THE ASSESSEE, KEEPING IN VIEW OUR AFORESAID DECISION. 22. BEFORE PARTING, WE MAY ALSO PUT ON RECORD ANOTH ER POINT MADE BY THE ASSESSEE. THE LD. REPRESENTATIVE SUBMITTED A C HART SHOWING OPERATING MARGINS DECLARED BY THE ASSESSEE FROM A.Y 2010-11 TO A.Y 2015-16. IT IS POINTED OUT THAT IN THE A.Y 2010-11 THE MARGIN WAS 20%, IN A.Y 2012-13 THE MARGIN WAS 18.60%, IN A.Y 2 013-14 THE MARGIN WAS 17.21%, IN A.Y 2014-15 THE MARGIN WAS 17 .27% AND IN A.Y 2015-16 THE MARGIN WAS 20%. THE AFORESAID IS S OUGHT TO BE PRESENTED TO SHOW THAT THE CURRENT YEARS MARGIN OF 17.41% IS QUITE COMPARABLE AND IS ALSO OTHERWISE JUSTIFIED AND DOES NOT REQUIRE ANY INTERFERENCE. WE DO NOT FIND ANY REASON TO ADJUDIC ATE ON THIS ASPECT, SINCE WE HAVE ALREADY ADJUDICATED THE SPECIFIC POI NTS RAISED BY THE ASSESSEE REGARDING THE DETERMINATION OF ALP OF THE INSTANT INTERNATIONAL TRANSACTION. 23. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED AS ABOVE. 24. ORDER PRONOUNCED IN THE OPEN COURT ON 16.11.201 8 SD/- SD/- (RAVISH SOOD) (G.S. PANNU) JUDICIAL MEMBER VICE PRE SIDENT MUMBAI; 16.11.2018 . . ./ PS. RAVI KUMAR SBI MACQUARIE INFRASTRUCTURE MANAGEMENT PVT LTD. VS. DCIT 14(3)(2) MUMBAI ITA NO. 324/MUM/2016, AY. 2011-12. 19 / 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