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These cross appeals are filed by assessee and revenue directed against
144C of the Income-Tax Act, 1961. Since identical issues are involved in
these appeals, they were heard together and are being disposed off by
before us, we find that the only issue to be decided is as to whether the
Ld. DRP was justified in not including IDC (India) Ltd., Informed
whether the Ld. DRP was justified in including the Ladderup Corporate
3. The brief facts of this issue are that the assessee is a part of
analyse the same to give its reports to its overseas AE. Assessee is
mentioned in the order of the Ld. TPO dated 13/01/2015 are as under:-
multiple year data of last three years average margin and by identifying
14.31% as under:-
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ITA No.423/Mum/2016 and other appeals
M/s. Gugganheim Capital Management (Asia) Pvt. Ltd.,
company as the tested party. The profit margin of the assessee was
the assessee pleaded that its margin to be at arm’s length price. The Ld.
TPO rejected four out of five comparables identified by the assessee and
retained only ICRA Online Ltd., from the comparables chosen by the
assessee.
3.3. During the course of proceedings before the TPO, assessee gave a
single year data i.e., contemporaneous data for all the five list of
comparables selected by the Ld. TPO which admittedly included the list of
as under:-
OP/OC 17.77%
3.5. The assessee filed objections before the Hon’ble Dispute Resolution
Panel (Ld. DRP) and the Ld. DRP vide its directions u/s.144C(5) of the Act
Advisory Pvt. Ltd., and ICRA Technoanalyst Ltd., in the list of final
comparables chosen by the Ld. TPO and directed the Ld. TPO to arrive at
4. Against the said directions of the Ld. DRP, both assessee as well as
the revenue are in appeal before us. Revenue is in appeal against the
Pvt. Ltd., and ICRA Technoanalyst Ltd. in the list of comparables. The
i.e IDC India Ltd., Informed Technologies India Ltd., Pipal Research
Analyst & Information Services India Pvt Ltd., and ICRA Management
Pvt. Ltd., and prayed for exclusion of the same from the list of
comparables.
Ltd., ITA Nos. 1717 & 2207/Mum/2016 dated 21/02/2018 for A.Y.2011-
12 in the case of General Atlantic Pvt. Ltd., and IT(TP)A Nos. 1148&
Silk Route Advisors Pvt. Ltd., wherein IDC (India) Ltd., and ICRA
reliance on the aforesaid orders to drive home his point for exclusion of
one of the comparables Ladderup Corporate Advisory Pvt. Ltd. from the
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ITA No.423/Mum/2016 and other appeals
M/s. Gugganheim Capital Management (Asia) Pvt. Ltd.,
the fact that Ld. DRP in page 28 at para 3.9.2. had categorically stated
that the income of the assessee during the year was Rs.11.18 Crores
during the year 2010-11 any income has been received from merchant
We find the entire argument of the Ld. DR have already been considered
by the Co-ordinate Bench decision of this Tribunal in IT(TP)A Nos. 1148 &
“11. This company was selected by the Transfer Pricing Officer and was
also retained by the DRP.
taxmann.com 18 iv) Avenue Asia Advisors Pvt. Ltd. v/s DCIT, [2017] 85
taxmann.com 311 (Del.)
assessee.
We find that the Co-ordinate Bench of this Tribunal in ITA Nos.1717 &
the Tribunal has held that IDC (India) Ltd. is a good comparable. In this
context, we refer to the decisions of the Tribunal in case of AGM India
Advisory Pvt. Ltd. (supra) and Temasek Holdings Advisors India Pvt. Ltd.
v/s DCIT, 87 taxmann.com 168 (Mum.). Moreover, in assessee’s own case
in the earlier assessment years, this company having been found to be
functionally similar was accepted as a comparable. In view of the
aforesaid, we direct the Assessing Officer to include this company as a
comparable.”
“8. This is one of the companies selected by the assessee. The Transfer
Pricing Officer rejected this comparable on the reasoning that the
company is not functionally similar to the assessee on the basis functions
provided, asset employed and risk undertaken. The Transfer Pricing
Officer observed, while the assessee is providing investment advisory
services, as per the information obtained under section 133(6) of the Act,
this company provides management consultancy and advisory services to
corporate banks, government, multilateral agencies, institutional agencies,
etc. Whereas, the assessee is providing investment advisory services for
private equity investment as well as real estate investment to the A.Es.
Thus, he held that the company is not a comparable. This view of the
Transfer Pricing Officer was also endorsed by the DRP.
9. The learned Sr. Counsel for the assessee submitted, functions performed
by this company is more or less similar to the investment advisory services
provided by the assessee to the A.Es. He submitted, in a number of cases
relating to the very same assessment year the Tribunal held this company
to be a comparable to an investment advisory service provider. In this
context, he drew our attention to the following decisions:– i) DCIT v/s
General Atlantic Pvt. Ltd., ITA no.1717/Mum./ 2016, dated 21.02.2018; ii)
Temasek Holdings Advisors India Pvt. Ltd. v/s DCIT, [2017] 87
10
ITA No.423/Mum/2016 and other appeals
M/s. Gugganheim Capital Management (Asia) Pvt. Ltd.,
taxmann.com 168; and iii) Sun Ares India Real Estate Pvt. Ltd. v/s DCIT,
ITA no.621/ Mum./2016, dated 09.02.2018.
10. The learned Sr. Counsel submitted, in assessee’s own case for the
assessment year 2008–09, the Tribunal has accepted this company as
comparable to the assessee. Thus, he submitted, this company has to be
accepted as a comparable.
the assessee.
Services and IDC (India) Ltd., are included in the list of comparables and
comparables, assessee would be well within the +/- 5% range and hence,
refrain to give our opinion on the other comparables for which grounds
have been raised by the assessee before us and those issues are left
6.2. With regard to the revenue appeal, the disputed issue before us as
would be squarely hit by the recent Circular of the CBDT vide Circular No.
3/2018 dated 11.07.2018 wherein tax effect on the disputed issue would
No.1146/Mum/2017.
(India) Ltd., and 3. Informed Technologies India Ltd., and sought for
him.
9.1. The brief facts of this issue are that the business profile of assessee
international transactions carried out by the assessee during the year are
as under:-
management charges
3 Reimbursement of expenses 3,351,875 Cost to cost
Total 70,194,067
9.2. The assessee claimed its profit margin at 15.07%. The assessee
benchmarked its transactions by using both multiple year data and single
9.3. The Ld. TPO rejected the comparables chosen by the assessee
except ICRA Online Ltd., and included Ladderup Corporate Advisory Pvt.
OP/OC 15.07%
10. The Ld. DRP upheld the action of the Ld. TPO by placing reliance of
12. We have heard the rival submissions. We find that the assessee
Pvt. Ltd. and inclusion of ICRA Management Consulting Services Ltd., IDC
(India) Ltd., and Informed Technologies India Ltd. We find that the Co-
“The learned representative for the assessee pointed out that there was no
dispute so far as the nature of services being rendered by the assessee is
concerned, being non-binding investment advisory services. It is pointed
out that the action of the TPO in considering Ladderup Corporate
Advisory Pvt. Ltd. as a comparable is incorrect inasmuch as the said
concern is functionally dissimilar. It has been pointed out that the said
concern is registered with the SEBI as a Category-I merchant banker and
is, inter-alia, engaged in rendering services in investment banking, capital
markets, wealth management, project finance and growth stage investing,
etc. Reference has also been made to para 9.1 of the order of TPO to point
out that assessee had brought out, on the basis of the website extract of the
said concern, that it was engaged in rendering investment banking and
debt capital services and not investment advisory services. Before the
TPO, assessee has also pointed out that even if there was any element of
investment advisory services being rendered by the said concern, the
15
ITA No.423/Mum/2016 and other appeals
M/s. Gugganheim Capital Management (Asia) Pvt. Ltd.,
Annual Report of the said concern showed that there was no separate
reportable segment and, therefore, the said concern could not be
compared with the tested transactions. At the time of hearing, the learned
representative for the assessee pointed out that for the instant assessment
year, under identical circumstances, in the case of Temasek Holdings
Advisors (India) Pvt. Ltd. (ITA No. 1429/Mum/2017 dated 03.01.2018), the
said concern stood held to be functionally dissimilar to the activities
similar to that of the assessee. Reliance has also been placed on the case
of Temasek Holdings Advisors (India) Pvt. Ltd. (ITA No. 477/Mum/2016
dated 11.08.2017) and Wells Fargo Real Estate Advisors Pvt. Ltd., (ITA
No.1520/Mum/2016 dated 17.01.2018.
7. On the other hand, the ld. CIT-DR appearing for the Revenue
referred to the discussion made by the TPO whereby it is canvassed that
the said concern offers various types of services including financial
advisory services. It has also been pointed out that the TPO perused the
relevant Notes to the Accounts accompanying the Annual financial
statements, which showed that the said concern was receiving income by
way of corporate advisory services and that the said concern is to be
understood as a finance, consultancy and advisory service. It was,
therefore, contended that the income-tax authorities made no mistake in
treating the said concern as a comparable in order to benchmark the
tested transaction.
9. In view of the said precedent, which has been rendered based on the
fact-situation of the financial year relevant to the assessment year before
us, we find no justification to uphold the action of the TPO in considering
that Ladderup Corporate Advisory Pvt. Ltd. is a good comparable. Thus,
on this aspect, the plea of the assessee is upheld and Ladderup Corporate
Advisory Pvt. Ltd. is directed to be excluded from the final list of
comparables.”
12.1. Respectfully following the aforesaid decision, we direct the Ld. TPO
by the Ld. AR for the assessee would be through by taking the benefit of
Consulting Services Ltd., and IDC (India) Ltd., for the Asst Year 2012-
13. The Ld. TPO is hereby directed to recompute the margins of the
directions.
17
ITA No.423/Mum/2016 and other appeals
M/s. Gugganheim Capital Management (Asia) Pvt. Ltd.,
2012-13 are allowed and appeal of the revenue for the A.Y.2011-
12 is dismissed.
Sd/- Sd/-
(SAKTIJIT DEY) (M. BALAGANESH)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Mumbai; Dated 20/02/2019
Karuna Sr.PS
Copy of the Order forwarded to :
1. The Appellant
2. The Respondent.
3. The CIT(A), Mumbai.
4. CIT
DR, ITAT, Mumbai
5.
BY ORDER,
6. Guard file.
सत्यापित प्रतत //True Copy//
(Asstt. Registrar)
ITAT, Mumbai