Pr. Commissioner Of Income Tax-2 } v. M/S. Arisaig

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO. 609 OF 2016 Pr. Commissioner of Income Tax-2}AppellantversusM/s. Arisaig Partner India Pvt. Ltd.}Respondent Mr. Suresh Kumar for the appellant. Mr. Jeet Kamdar I/b. Mr. Atul K. Jasanifor the respondent. CORAM :-S. C. DHARMADHIKARI &B. P. COLABAWALLA, JJ.DATE :- OCTOBER 10, 2018 P.C. :- 1.This appeal challenges the order passed by the tribunaldated 25[th] March, 2015 for assessment year 2009-10. Mr.SureshKumar submits that the Revenue proposes the questions at pagenos. 4 and 5 of the paper book as substantial questions of law.They squarely arise from the order of the tribunal. 2.To appreciate this argument, we must refer to the basicfacts. A return of income was filed by the assessee. The case wasselected for scrutiny. A notice was issued and thereafter, theassessing officer discovered that an international transactionwith associate enterprise entered into by the assessee exceeded the threshold limit of Rs.15 crores. The assessing officer,therefore, made a reference to the Transfer Pricing Officer afterseeking approval of the Commissioner of Income Tax-2, Mumbai.The Transfer Pricing Officer made an order under section92CA(3) of the Income Tax Act, 1961 on 26[th] November, 2012,based on which, the assessing officer made his order. TheTransfer Pricing Officer considered certain instances ascomparables. The assesee was aggrieved by this exercise carriedout by the Transfer Pricing Officer as also the assessing officerand filed objections before the Dispute Resolution Panel. TheDispute Resolution Panel deleted certain comparables from theTransfer Pricing Officer's order, but maintained the rest. In termsof the directions of the Dispute Resolution Panel, the assessingofficer passed the assessment order dated 20[th] October, 2013. 3.The Revenue being aggrieved thereby, filed an appeal to thetribunal and the assessee also filed cross objections. TheRevenue, in the appeal, challenged the deletion of certaincomparables, whereas, the assessee challenged the upholding ofthe Dispute Resolution Panel's view insofar as a comparable in theform of Motilal Oswal Investment Advisors Pvt. Ltd. That couldnot have been, in the submission of the assessee, taken ascomparable for determining an arms length price. 4.By the impugned order, the tribunal dismissed the appeal ofthe Revenue. However, it allowed the cross objections of theassessee. Aggrieved thereby, the Revenue has proposed theabove referred questions as substantial questions of law. 5.In the case of Motilal Oswal Investment Advisors Pvt. Ltd., aview has been taken by this court in its order dated 18[th]September, 2018 in Income Tax Appeal No. 406 of 2016. There,the assessee was a venture capital company. For a similarinternational transaction, the arms length price was to bedetermined and the Transfer Pricing Officer, inter alia, includedMotilal Oswal Investment Advisors Pvt. Ltd. as a comparable. Theaggrieved assessee approached the Dispute Resolution Panel,which deleted the instance of Motilal Oswal Investment AdvisorsPvt. Ltd. as comparable. That is how maintaining of that view bythe tribunal triggered Income Tax Appeal No. 406 of 2016 andproposing identical questions as substantial questions of law. 6.In a detailed order passed by this court, it has been heldthat there is a difference between services and business ofcomparable like Motilal Oswal Investment Advisors Pvt. Ltd. andthe assesee. The Division Bench held that the activities of MotilalOswal Investment Advisors Pvt. Ltd. were functionally incomparable to the activities of investment advisory servicesrendered by the assessee to its associate enterprise. 6.In a detailed order passed by this court, it has been heldthat there is a difference between services and business ofcomparable like Motilal Oswal Investment Advisors Pvt. Ltd. andthe assesee. The Division Bench held that the activities of MotilalOswal Investment Advisors Pvt. Ltd. were functionally incomparable to the activities of investment advisory servicesrendered by the assessee to its associate enterprise. 7.Here as well, similar is the factual position. Once the factualfindings rendered in the impugned order are based on thematerials before the tribunal, then, it is not permissible for us tore-appraise and re-appreciate the same and arrive at a differentconclusion. No perversity has been demonstrated in the viewtaken by the tribunal nor is it vitiated by an error of law apparenton the face of the record. Consequently, none of the questionsproposed before us can be treated as substantial questions of law.The appeal fails and it is dismissed. There would be no order as tocosts. JayantVishwanathSalunkeDigitally signed by(B. P. COLABAWALLA, J.) (S.C.DHARMADHIKARI, J.)Jayant VishwanathSalunkeDate: 2018.10.1118:10:17 +0530