TA ASSOCITES ADVISORY P.LTD, MUMBAI V. DCTI CIR 3(3), MUMBAI

ITA 496/MUM/2015

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3468 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2016
• Appeal Filed By: Assessee
• Bench Allotted: E
• Assessment Year: 2010-2011
• Appeal Filed On: 21-01-2015
• Court: TRIBUNAL
• Department Lawyers: N K CHAND
• Keywords: Business income; Transfer pricing; International transaction
• Section: 92C; 143(3)

Judgement Text

, , K , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES K, MUMBAI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER, AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA NO.496/MUM/2015 ASSESSMENT YEAR: 2010-11 TA AS SOCIATES ADVISORY P. LTD. AVANTHA HOUSE, CROMPTON GREAVES BUILDING, 12 TH FLOOR, DR. ANNIE BESANT ROAD, WORLI MUMBAI -400004 / VS. D CIT CIR - 3(3) AAYAKAR BHAVAN MUMBAI (ASSESSEE ) (REVENUE) P.A. NO. AADCT0884H / ASSESSEE BY S HRI PORUS KAKA & SHRI DIVESH CHAWLA (AR) / REVENUE BY SHRI N.K. CHAND - CIT (DR) / DATE OF HEARING : 18/1/2016 / DATE OF ORDER: 22/01/2016 / O R D E R PER ASHWANI TANEJA (ACCOUNTANT MEMBER): THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-1 5, MUMBAI {(IN SHORT LD. CIT(A)} DATED 27.10.2014 FOR THE ASSESSMENT YEAR 2010-11, DECIDED AGAINST THE ASSESS MENT ORDER PASSED BY THE ASSESSING OFFICER (IN SHORT AO ) U/S 143(3) OF THE ACT. TA ASSOCIATES ADVISORY P. LTD. 2 2 . DURING THE COURSE OF HEARING, SHRI PORUS KAKA & S HRI DIVESH CHAWLA AUTHORISED REPRESENTATIVE (LD. COUNSEL) ON BEHALF OF THE ASSESSEE AND SHRI N.K. CHAND, CIT, DEPARTMENTAL REPRESENTATIVE (LD DR) ON BEHALF OF TH E REVENUE, ARGUED THE CASE. 3 . AT THE VERY OUTSET, IT HAS BEEN NOTED THAT APPEAL F ILED BY THE ASSESSEE IS LATE BY ONE DAY. IN RESPONSE TO OUR QUE RY, LD. COUNSEL OF THE ASSESSEE HAS DRAWN OUR ATTENTION TO THE PETITION FILED BY THE ASSESSEE REQUESTING FOR CONDO NATION OF THE DELAY. WE HAVE GONE THROUGH THE SAID PETITION EXPLA INING THE DELAY ON THE GROUND THAT MANAGING DIRECTOR OF THE C OMPANY WAS NOT AVAILABLE AND THAT IS HOW DELAY OCCURRED. T HE ASSESSEE HAS SUPPORTED THE REASON ALONG WITH DULY S WORN AFFIDAVIT. NO SERIOUS OBJECTION HAS BEEN RAISED BY THE DEPARTMENT FOR CONDONATION OF DELAY. IN VIEW OF THE SE FACTS AND IN THE INTEREST OF JUSTICE, THE DELAY IS CONDONED A ND APPEAL IS ADMITTED FOR ADJUDICATION. 4. GROUND NO.1: IN THIS GROUND, THE ASSESSEE HAS CHALLENGED THE ACTION OF LD. CIT(A) IN CONFIRMING THE ACTION O F AO IN MAKING ADDITION AS A RESULT OF UPWARD TRANSFER PRIC ING ADJUSTMENT. THE MAIN GRIEVANCE OF THE ASSESSEE IS T HAT THE AO HAS WRONGLY INCLUDED ONE COMPARABLE NAMELY M/S. MOT ILAL OSWAL INVESTMENT ADVISORS PVT. LTD. 4.1. DURING THE COURSE OF HEARING, IT HAS BEEN SUBMITTE D BY THE LD. COUNSEL THAT THE AFORESAID COMPARABLE HAS B EEN INCLUDED BY THE AO ABRUPTLY IN THE ASSESSMENT ORDER WITHOUT TA ASSOCIATES ADVISORY P. LTD. 3 MAKING ANY FRESH SEARCH AND WITHOUT FOLLOWING DUE P ROCEDURE AS PRESCRIBED UNDER THE LAW. IT HAS BEEN ALSO SUBMI TTED THAT MOTILAL OSWAL (I.E. M/S. MOTILAL OSWAL INVESTMENT A DVISORS PVT. LTD.) IS NOT, EVEN, FUNCTIONALLY COMPARABLE TO THE ASSESSEE COMPANY. IT HAS BEEN SUBMITTED THAT BASED ON THE FU NCTIONAL, ASSETS AND RISK ANALYSIS OF THE ASSESSEE AS DOCUMEN TED IN ITS TRANSFER PRICING STUDY REPORT, IT CAN BE CONCLUDED THAT THE ASSESSEE COMPANY IS A CAPTIVE SERVICE PROVIDER WITH LIMITED RISK ASSOCIATED WITH CARRYING OUT SUCH BUSINESS AND DOES NOT PERFORM ANY DECISION MAKING FUNCTION AND ITS ACTIVI TIES ARE MERELY RESTRICTED TO THE PROVISION OF NON-BINDING I NVESTMENT ADVISORY SERVICES UNDER THE INSTITUTIONS OF ITS ASS OCIATED ENTERPRISES. THE ROLE OF THE COMPANY IS LIMITED TO THE PROVISION OF NON-BINDING INVESTMENT ADVISORY SERVIC ES, AND THUS, IT ASSUMES LIMITED RISK SUCH AS MARKET RISK, LOSS AND INVESTMENT RISK, CREDIT RISK, FOREIGN EXCHANGE RISK AND MANPOWER RISK. THUS, THE ASSESSEE RECEIVED RETURNS HAVING REGARD TO ITS FUNCTIONALITY AND ITS PROFILE. 4.2. IT HAS BEEN SUBMITTED THAT ON THE OTHER HAND, MOTI LAL OSWAL IS NOT FUNCTIONALLY COMPARABLE TO THE ASSESSE E COMPANY, SINCE MOTILAL OSWAL IS AN INVESTMENT BANKI NG COMPANY ENGAGED IN PROVIDING INVESTMENT BANKING SOL UTIONS. IT HAS A TEAM OF EXPERIENCED BANKERS AND IS CAPABLE OF PROVIDING SERVICES FOR VARIOUS PROJECTS VIZ CAPITAL MARKETS MERGERS AND ACQUISITION, PRIVATE EQUITY AND STRUCTU RED DEBT. IT HAS BEEN SUBMITTED THAT MOTILAL OSWAL IS PRIMARILY I NTO MERCHANT BANKING AND IPO SERVICES, AND QUANTIFICA TION OF ITS TA ASSOCIATES ADVISORY P. LTD. 4 FEE AND REMUNERATION STAND ON A ABSOLUTELY DIFFEREN T PLATFORM, WHICH IS CHARGED MOSTLY ON PERCENTAGE BASIS. MOTILA L OSWAL IS INVOLVED IN THE DECISION MAKING PROCESS AS WELL AS IMPLEMENTATION. ON THE OTHER HAND, THE ASSESSEE COM PANY IS MERELY A SUB-ADVISOR. ITS ROLE IS CONFINED MERELY T O ADVISORY THAT TOO UPTO A PRE-INVESTMENT STAGE. THE ASSESSEE COMPANYS ROLE IS CONFINED MOSTLY IN PROVIDING OPINION TO ITS CLIENTS FOR VARIOUS INVESTMENTS OPTIONS AVAILABLE IN THE MARKET . HOW AND IT WHAT MANNER ADVICE/OPINION OF THE ASSESSEE COMPA NY WOULD BE IMPLEMENTED OR EXECUTED BY THE CLIENT, IN NONE OF THE BUSINESS OF THE ASSESSEE COMPANY. OUR ATTENTION HAS BEEN DRAWN ON VARIOUS PAGES OF THE PAPER BOOK TO SHOW TR ANSFER PRICING REPORTS AND ANNUAL REPORTS OF MOTILAL OSWAL AS WELL AS THE ASSESSEE COMPANY TO SHOW THE DISTINCTION BET WEEN THE WORKING MECHANISMS OF BOTH THE COMPANIES. 4.3. LASTLY, IT HAS BEEN SUBMITTED BY THE LD. COUNSEL T HAT THIS ISSUE IS NO MORE RES-INTEGRA. IT HAS BEEN DECIDED I N VARIOUS JUDGMENTS COMING FROM THE TRIBUNAL AND HONBLE BOMB AY HIGH COURT THAT MOTILAL OSWAL IS NOT PURE ADVISORY COMPANY AND THE SAME WAS REJECTED AS COMPARABLE TO PURE ADV ISORY COMPANIES IN FOLLOWING CASES: 1. CARLYLE INDIA ADVISORS (P.) LTD. V. ASSISTANT CO MMISSIONER OF INCOME- TAX 10(1), MUMBAI. (7901/MUM/2011) (MUMB AI) 2.COMMISSIONER OF INCOME-TAX-1 0, MUMBAI V. CARLYLE INDIA ADVISORS (P.) LTD. (32 TAXMANN.COM 23) (BOMBAY) 3. CARLYLE INDIA ADVISORS (P.) LTD. V. DEPUTY COMMI SSIONER OF INCOME-TAX, CIRCLE -10(1), MUMBAI (43 TAXMANN.COM 184) (MUMBAI - TUB.) 4.CARLYLE INDIA ADVISORS (P.) LTD. V. DEPUTY COMMIS SIONER OF TA ASSOCIATES ADVISORY P. LTD. 5 INCOME-TAX, 10 (1), MUMBAI (49 TAXMANN.COM 476) (MUMBAI - TRIB.) 5.GENERAL ATLANTIC (P.) LTD. V. DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE - 3(1), MUMBAI (32 TAXMANN.COM 178) (MUMBAI - TRIB.) 6.GENERAL ATLANTIC (P.) LTD. V. ASSISTANT COMMISSIO NER OF INCOME-TAX (OSD), CIRCLE-3(1), MUMBAI. (36 TAXMANN.COM 44) (MUMBAI - TRIB.) 7.TEMASEK HOLDINGS ADVISORS (I) (P.) LTD. V. DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE -3(3), MUMBAI. ( 38 TAXMANN.COM 80) (MUMBAI - TRIB.) 8.DEPUTY COMMISSIONER OF INCOME-TAX, CIR. 3 (3), MU MBAI V. TEMASEK HOLDING ADVISORS (P.) LTD. (47 TAXMANN.COM 311) (MUMBAI - TRIB.) 9. Q INDIA INVESTMENT ADVISORS PVT LTD V/S DEPUTY COMMISSIONER OF INCOME-TAX - 3(3), MUMBAI. (923/MUM/2015) 10. NVP VENTURE CAPITAL INDIA PVT LTD V/S DEPUTY COMMISSIONER OF INCOME-TAX - 3(2)(2), MUMBAI. (1 564/MUM/ 2015) 11.BAIN CAPITAL ADVISORS (I) P LTD V/S DEPUTY COMMI SSIONER OF INCOME-TAX - 3(1), MUMBAI. (413/MUM/2015) 12. BAIN CAPITAL ADVISORS (I) P LTD V/S DEPUTY COMM ISSIONER OF INCOME-TAX 3(1), MUMBAI. (1360/MUM/2014) 13. ACUMEN FUND ADVISORY SERVICES INDIA (P.) LTD. V . DEPUTY COMMISSIONER OF INCOME-TAX - 2(1), MUMBAI. ( 50 TAXMANN.COM 317) (MUMBAI - TRIB.) 14. DEPUTY COMMISSIONER OF INCOME-TAX - 2(1), MUMBA I V/S ARISAIG PARTNERS INDIA PVT LTD. (1083/MUM/2014) 15. LEHMAN BROTHERS ADVISERS PVT LTD V/S ACIT - CIR CLE 6(3) -ITANO.7722 4.4. LD. COUNSEL HAS READ BEFORE US VARIOUS JUDGMENTS F ROM THE ABOVE LIST TO SHOW THAT MOTILAL OSWAL WAS EXCLU DED FROM THE LIST OF COMPARABLES IN THESE CASES WHICH ARE HA VING SIMILAR FACTS WITH THE ASSESSEE COMPANY. 4.5. ON THE OTHER HAND, LD. DR VEHEMENTLY OPPOSED THE SUBMISSIONS MADE BY THE LD. COUNSEL OF THE ASSESSEE . OUR TA ASSOCIATES ADVISORY P. LTD. 6 ATTENTION WAS DRAWN ON ANNUAL REPORT OF MOTILAL OSW AL WHEREIN STATUTORY AUDITORS OF THE SAID COMPANY HAVE MENTIONED THAT THE MOTILAL OSWAL HAD ONLY ONE SEGME NT AND THERE WERE NOT SEPARATE REPORTABLE SEGMENTS AS DEFI NED IN AS- 17. IT WAS FURTHER SUBMITTED THAT EVEN IF THE FUNC TIONS OF THE SAID COMPANY AND THE ASSESSEE COMPANY ARE NOT SIMIL AR, BUT SKILL SETS REQUIRED TO PERFORM THE FUNCTIONS ARE SI MILAR. IN VIEW OF THESE FACTS MOTILAL OSWAL SHOULD BE HELD AS COMP ARABLE TO THE ASSESSEE COMPANY. 4.6. WE HAVE GONE THROUGH THE SUBMISSIONS MADE BY BOTH THE SIDES. IN OUR CONSIDERED OPINION, FUNCTIONS AND ACT IVITIES CARRIED OUT BY MOTILAL OSWAL ARE DIFFERENT FROM THE FUNCTIONS AND ACTIVITIES OF THE ASSESSEE COMPANY. ACCORDINGLY , THE RISK PROFILES OF THE TWO ARE ALSO DIFFERENT. IT HAS BEEN CLEARLY MENTIONED IN THE ANNUAL REPORT OF MOTILAL OSWAL THA T THE SAID COMPANY IS ENGAGED IN THE BUSINESS OF MERCHANT BANK ING AND INVESTMENT, BUSINESS ADVISORY SERVICES. IT IS FURTH ER NOTED BY US THAT ACTUALLY WE NEED NOT LABOUR MUCH ON THIS I SSUE AS VARIOUS BENCHES HAVE ALREADY ADDRESSED THIS ISSUE AT GREAT LENGTH AND DETAIL IN THE AFORESAID PRECEDENTS RELIE D UPON BY THE LD. COUNSEL. IN THE CASE OF LEHMAN BROTHERS ADV ISORS PVT. LTD., IN WHICH ONE OF US (I.E. HONBLE JUDICIAL MEM BER WAS A PARTY), IT WAS HELD, WITH REGARD TO MOTILAL OSWAL A S UNDER: 4. WE HAVE HEARD BOTH THE PARTIES ON THE LIMITED I SSUE OF IF THE MOIAPL IS A GOOD COMPARABLE AND WHETHER IT P ASSED THE FUNCTIONAL TEST. IN THIS REGARD, WE EXAMINED TH E DIRECTORS REPORT PLACED ON PAGE 13 OF THE PAPER BOOK AND THE FOLLOWING IS REPORTED BY THE DIRECTORS UNDER TH E TA ASSOCIATES ADVISORY P. LTD. 7 HEADING REVIEW OF OPERATIONS AND FUTURE OUTLOOK , WHICH READS AS UNDER: THE MARKET FOR THE SERVICES OF THE COMPANY IS BUOY ANT AND THE COMPANY MADE A QUANTUM JUMP IN BUSINESS DURING THE YEAR 2007-08. ON THE WHOLE, 23 ASSIGNMEN TS WERE COMPLETED SUCCESSFULLY IN THE YEAR AS AGAINST 14 COMPLETED IN THE PREVIOUS YEAR. INCOME FROM CROSS B ORDER M&A ACTIVITY AND THE RELATED FINANCING SOLUTIONS HA S BEEN THE LARGEST CONTRIBUTOR TO THE REVENUE MIX DURING T HE YEAR. THE TEAM SIZE HAS NOW INCREASED TO 30 AND THERE IS A GOOD BLEND OF RELATIONSHIP MANAGERS, PRODUCTS SPECIALIST AND SECTOR EXPERT. SPECIFICALLY, THE KNOWLEDGE AND EXPE RTISE IN THE INDUSTRY AREAS OF REAL ESTATE, OIL & GAS, INFOR MATION TECHNOLOGY, STEEL AND POWER HAVE BEEN STRENGTHENED. THE CAPITAL MARKETS BUSINESS GAINED MOMENTUM DURING THE YEAR DERIVING ITS SYNERGY FROM DISTRIBUTION TEA M AT MOTILAL OSWAL SECURITIES LIMITED. THE COMPANY' WAS RANKED AS NUMBER ONE IN BLOOMBERG RANKING FOR QLP BUSINESS DURING THE QUARTER ENDED MARCH, 2008. THE COMPANY HAS BEEN ABLE TO ORIGINATE AND STRUCTURE HI GH QUALITY DEALS IN PRIVATE EQUITY BUSINESS AND, IS HO PEFUL THAT THE SAME TREND WOULD CONTINUE IN THE COMING YE AR. CLIENTS HAVE APPRECIATED THE CAPABILITY OF THE STRU CTURED FINANCE TEAM AND IT REMAINS A STRONG SELLING PROPOS ITION FOR THE COMPANY TO STRENGTHEN ITS POSITION IN THE M ARKET PLACE AND TO BE ABLE TO CROSS SELL ITS SERVICES ACR OSS THE CLIENTS AND INDUSTRY SECTORS. THE FINANCIAL MARKETS HAVE SEEN AN UNPRECEDENTED TU RMOIL OVER THE LAST THREE MONTHS WITH BOTH EQUITY AND CRE DIT MARKETS BEING UNSTABLE AND IN A STATE OF UNCERTAINT Y. THE MARKET SITUATION WOULD HAVE IMPACT ON THE CAPITAL M ARKETS BUSINESS OF THE COMPANY IN THE COMING YEAR. AT THE SAME TIME, THE LIQUIDITY CRUNCH AND RE-VALUATION OF ASSE TS ACROSS THE BOARD GLOBALLY HAS OPENED UP OPPORTUNISTIC BUYI NG AND SELLING POSSIBILITIES FOR OUR CLIENTELE IN THE INDU STRY AND FINANCIAL MARKETS. THE TEAM HAS A GOOD COMBINATION OF SKILL SET AND KNOWLEDGE TO ADDRESS THE CHANGE IN TH E MARKET CONDITIONS. THE COMPANY EXPECTS A LARGER FLO W OF TRANSACTIONS IN THE PRODUCT AREAS OF BUSINESS AND F INANCIAL RESTRUCTURING, PRIVATE EQUITY HAVE-OFFS SHAREHOLDER VALUE CREATION THROUGH BUY-BACK/SELL-OUTS AND MERGERS. TA ASSOCIATES ADVISORY P. LTD. 8 5. FROM THE ABOVE IT IS EVIDENT THAT THE SAID COMPA NY MOIAPL HAS UNDERTAKEN 23 ASSIGNMENTS SUCCESSFULLY I N THE YEAR UNDER CONSIDERATION. MAJOR PORTION OF THE INCOME IS EARNED BY MOIAPL OUT OF CROSS BORDER ACTIVITY SE RVICES AND RELATED FINANCIAL SERVICES. THE CAPITAL MARKET BUSINESS IS ONE OF THE SOURCE3S OF THE ADVISORY FEES EARNED BY THE ASSESSEE. ASSESSEE HAS ALSO EARNED FEES OUT OF ASSESSEE S CAPABILITY OF THE STRUCTURED FINANCE TEAMS, FINANCIAL MARKETS, IE BOTH EQUITY AND CREDIT MARKET , IS ANOTHER SOURCE OF INCOME FOR THE ASSESSEE. THESE FU NCTIONS OF THE ASSESSEE WERE ANALYZED BY THE TRIBUNAL DURIN G THE PROCEEDINGS IN THE CASE OF CARLYLE INDIA ADVISORS ( P) LTD (SUPRA). THE DETAILED FINDINGS OF THE TRIBUNAL IN THIS REGARD ARE MENTIONED IN PARA 12 OF THE SAID TRIBUNA L S ORDER (SUPRA) AND THE SAME IS REPRODUCED AS UNDER: 12. ..........THE ONLY DISPUTE IS WHETHER MOTILAL OSWAL INVESTMENT ADVISORS PVT LTD CAN BE CONSIDERED AS A COMPARABLE FOR THE DETERMINATION OF ALP. A PERUSAL OF THREE COMPARABLES CONSIDERED BY THE TPO SHOWS THAT M/S. FUTURE CAPITAL INVESTMENT ADVISORS LTD HAS OPERATIV E PROFIT AT 21.79% WHEREAS OPM OF MOTILAL OSWAL INVES TMENT ADVISORS PVT LTD IS 72.33%. THE COMPARABLES USED BY THE TPO THEMSELVES ARE SHOWING EXTREME OPM. A PERUSAL O F THE DIRECTOR S REPORT OF MOTILAL OSWAL INVESTMENT ADVISORS PVT LTD SHOWS THAT DURING THE YEAR UNDER CONSIDERAT ION, THE SAID COMPANY HAS COMPLETED 23 ASSIGNMENTS SUCCESSFULLY AS AGAINST 14 COMPLETED IN THE IMMEDIA TELY PRECEDING YEAR. A CLOSE LOOK AT THE FINANCIAL STATE MENTS OF THE SAID COMPANY SHOW THAT THE INCOME FROM OPERATIO NS HAVE BEEN SHOWN ONLY AS ADVISORY FEES WHEREAS IT IS ADMITTEDLY AN UNDISPUTED FACTS THAT THE SAID COMPAN Y IS ENGAGED IN DIVERSIFIED ACTIVITIES. SEGMENTAL REPORT ING IS NOT AVAILABLE. PROFIT AND LOSS ACCOUNT APPEARS TO BE ON LY OF CONSOLIDATED ACCOUNTS. THE SAID COMPANY IS REGISTER ED WITH SEBI AS A MERCHANT BANKER AND THE DIRECTOR S REPORT SHOW THAT IT IS INTO TAKEOVER ACQUISITIONS, DISINVE STMENTS ETC. IN THE ABSENCE OF SPECIFIC DATA IT IS NOT POSS IBLE TO MAKE COMPARISON. IT CAN THEREFORE BE SAFELY SAID TH AT 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 ADVISOR S PVT TA ASSOCIATES ADVISORY P. LTD. 9 LTD AS A COMPARABLE FOR THE DETERMINATION OF ALP AN D RE- DETERMINE THE ARM S LENGTH PRICE EXCLUDING MOTILAL OSWAL INVESTMENT ADVISORS PVT LTD [ AS PER THE FINDINGS] AND INCLUDING M/S. IDC [AS PER THE DIRECTIONS OF THE DR P] I THE LIGHT OF THE PROVISIONS OF SECTION 92C(2) R.W.S 92C (2A) OF THE ACT. GROUND NO.4.1 AND GROUND NO.9 ARE ACCORDIN GLY ALLOWED. 6. THE CONTENTS OF ABOVE EXTRACTED PARA HIGHLIGHTS THE FACT THAT THE MOIAPL IS INTO MERCHANT BANKING, AND THERE FORE, IS FUNCTIONALLY DIFFERENT TO THAT OF THE ASSESSEE W HICH IS ENGAGED IN THE BUSINESS OF NON-BINDING ADVISORY SER VICES. THEREFORE, IN OUR OPINION, THE ASSESSEE IS ENGAGED IN THE FUNCTION OF NON-BINDING ADVISORY SERVICES WHEREAS M OIAPL IS INTO THE MERCHANT BANKING, CAPITAL MARKETS, FINA NCE MARKETS ETC. THEREFORE, WE FIND THE MOIAPL IS FUNCT IONALLY DISSIMILAR AND THEREFORE, THE SAME SHOULD BE EXCLUD ED FOR BENCHMARKING THE INTERNATIONAL TRANSACTIONS. ACCORD INGLY, AO / TPO IS DIRECTED TO EXCLUDE THE SAME. THUS, GRO UND NO. 1 RAISED BY THE ASSESSEE IS ALLOWED IN FAVOUR OF THE ASSESSEE. 4.7. SIMILARLY, IN CASE OF Q-INDIA INVESTMENT ADVISORS PRIVATE LIMITED (SUPRA), SIMILAR VIEW HAS BEEN TAKEN. DETAI LED FINDING OF THE HONBLE BENCH ARE REPRODUCED HEREIN: 7. WE HAVE CONSIDERED RIVAL CONTENTIONS, CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOU ND THAT ASSESSEE IS ENGAGED IN RENDERING INVESTMENT ADVISOR Y SERVICES TO ITS AE. AS PER FINDING RECORDED IN VARI OUS JUDICIAL PRONOUNCEMENTS IN ABOVE REFERRED CASES, M/ S MOTILAL OSWAL INVESTMENT ADVISORY PVT. LTD. HAS BEE N EXCLUDED FROM THE LIST OF COMPARABLES ON THE PLEA T HAT IT IS ENGAGED IN DIVERSIFIED ACTIVITIES. IN THE CASE OF A CUMEN FUND ADVISORY SERVICES (I) PVT. LTD. (SUPRA), THE T RIBUNAL OBSERVED THAT M/S MOTILAL OSWAL INVESTMENT ADVISORY PVT. LTD. IS ENGAGED IN ACQUISITION, DISINVESTMENT, IPO, ETC, WHEREAS THE ASSESSEE IS ENGAGED IN INVESTMENT ADVIS ORY SERVICES. IN CASE OF CARLYLE INDIA ADVISORS PVT. LT D.(SUPRA), TA ASSOCIATES ADVISORY P. LTD. 10 THE TRIBUNAL OBSERVED THAT M/S MOTILAL OSWAL INVEST MENT ADVISORY PVT. LTD. IS REGISTERED WITH SEBI AS MERCH ANT BANKER AND IS ENGAGED IN DIVERSIFIED ACTIVITIES, AC QUISITION, DISINVESTMENT, IPO ETC. 8. AS PER THE ANNUAL REPORT OF M/S MOTILAL OSWAL INVESTMENT ADVISORY PVT. LTD. FOR THE YEAR ENDING ON 31-3-2010 RELEVANT ASSESSMENT YEAR 2010- 2011, THE COMPANY DERIVES ITS BUSINESS INCOME FROM FOUR DIFFERENT BUSINESS VERTICALS VIZ. EQUITY CAPITAL MA RKETS, MERGERS & ACQUISITIONS, PRIVATE EQUITY SYNDICATIONS AND STRUCTURED DEBT. THE INCOME SOURCE ACROSS THE FOUR PRODUCTS WAS MORE OR LESS EVENLY BALANCED. THE COMP ANY CONTINUES TO PERFORM WELL ON ADVISING INDIAN CORPOR ATE ON CROSS BORDER ACQUISITIONS. THE PRIVATE EQUITY BUSIN ESS OVER THE LAST THREE YEARS HAS ALSO RESULTED IN A GOOD PI PELINE OF IPOS IN THE COMING YEAR. 9. IN VIEW OF THE ABOVE OBSERVATIONS REGARDING NATU RE OF BUSINESS CARRIED ON BY MOTILAL OSWAL AND THE JUDICI AL PRONOUNCEMENTS, IT IS CRYSTAL CLEAR THAT IN ADDITIO N TO INVESTMENT ADVISORY SERVICES IN WHICH ASSESSEE WAS INVOLVED, M/S MOTILAL OSWAL INVESTMENT ADVISORY PVT . LTD. WAS ENGAGED IN DIVERSIFIED ACTIVITIES AND REGISTERE D WITH SEBI AS A MERCHANT BANKER. THUS, M/S MOTILAL OSWAL INVESTMENT ADVISORY PVT. LTD. IS FUNCTIONALLY DIFFE RENT FROM THE ASSESSEE. ACCORDINGLY, WE DIRECT THE AO TO EXCL UDE M/S MOTILAL OSWAL INVESTMENT ADVISORY PVT. LTD. FOR M THE LIST OF COMPARABLES. 4.8. IT IS NOTED THAT THE ASSESSMENT YEAR IN THE ABOVE SAID CASE IS A.Y. 2010-11 WHICH IS SAME AS THAT OF ASSES SEE IN THE CASE BEFORE US. IT IS FURTHER NOTED BY US THAT DECI SION OF HONBLE BOMBAY BENCH IN THE CASE OF CARLYLE INDIA A DVISORS (P) LTD. (SUPRA) HAS BEEN UPHELD BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. CARLYLE INDIA ADVISORS (P) LTD. 32 TAXMANN.COM 23(BOMBAY). THUS, RESPECTFULLY FOLLOWIN G THE AFORESAID JUDGMENTS AND IN VIEW OF THE FACTS BROUGH T BEFORE US. WE FIND THAT MOTILAL OSWAL IS NOT COMPARABLE TO THE ASSESSEE COMPANY AND THE AO IS DIRECTED TO EXCLUDE THE SAME FROM THE TA ASSOCIATES ADVISORY P. LTD. 11 LIST OF COMPARABLES AND RE-COMPUTE THE ARMS LENGTH PRICE AND ALSO THE TRANSFER PRICING ADJUSTMENT TO BE MADE , IF ANY AFTER THE EXCLUDING THE AFORESAID COMPANY. 4.9. IT IS SUBMITTED BY THE LD. COUNSEL OF THE ASSESSEE THAT OTHER GROUNDS RAISED BY THE ASSESSEE ARE CONSEQUENT IAL TO GROUND NO.1 AND IF GROUND NO.1 IS DECIDED IN FAVOUR OF THE ASSESSEE THE OTHER GROUNDS BECOME ACADEMIC IN NATUR E AND INFRUCTUOUS. SINCE, WE HAVE DECIDED GROUND NO.1 IN FAVOUR OF THE ASSESSEE, THEREFORE OTHER GROUNDS ARE DISMISSED AS INFRUCTUOUS. 5 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PART LY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND JANUARY, 2016. SD/- (SAKTIJIT DEY ) SD/- (ASHWANI TANEJA) ! / JUDICIAL MEMBER '! / ACCOUNTANT MEMBER MUMBAI; DATED : 22/1/2016 CTX? P.S/. .. # $%&'&($ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !'# / THE RESPONDENT. 3. $# $# % ( ) / THE CIT, MUMBAI. 4. $# $# % / CIT(A)- , MUMBAI 5. ()* # !+ , $# # +- , / DR, ITAT, MUMBAI 6. *. / / GUARD FILE. / BY ORDER, '#( ! //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI