DCIT 2(1), R No. 561, 5th floor, Aayakar Bhavan, M.K. Road, Mumbai 400 020. Vs. M/s Deutsche Asset Management (India) Pvt. Ltd., 222, Kodak House, D.N. Road, Fort, Mumbai 400001.
June, 15th 2015
IN THE INCOME TAX APPELLATE TRIBUNAL "K" BENCH, MUMBAI
BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND
SHRI B.R. BASKARAN, ACCOUNTANT MEMBER
./I.T.A. No.789/ Mum/2014
( / Assessment Year : 2009-2010
DCIT 2(1), / M/s Deutsche Asset
R No. 561, 5 t h floor, Management (India) Pvt.
Aayakar Bhavan, Ltd.,
M.K. Road, 222, Kodak House,
Mumbai 400 020. D.N. Road, Fort,
. / PAN : AABCD5226D
( /Appellant) .. ( / Respondent)
Appellant by Shri Padmanabhan
Respondent by : Shri Niraj Sheth
/ Date of Hearing : 07-04-2015
/Date of Pronouncement : 12-06-2015
/ O R D E R
PER B.R. BASKARAN, A.M.
This appeal filed by the Revenue is directed against the assessment
order dated 6-12-2013 passed by the A.O. u/s 143(3) r.w.s. 144C(13) of the
Act in conformity with the directions issued by the Dispute Resolution Panel -
1, Mumbai ("DRP").
2. The Revenue has aggrieved by the decision of DRP in deleting the
adjustment of Rs. 1.50 crores made by the Transfer Pricing Officer ("TPO").
3. We have heard the parties and perused the record. The assessee
company is engaged in the business of providing investment advisory and
marketing support services. The assessee company provided advisory services
2 ITA 789/M/11
to its Associated Enterprises ("AEs") named Deutsche Asset Management
(Asia) Limited (in short "DAMAL"), Singapore. DAMAL is a fund Manager for
Deutsche India Equity Fund. In consideration for providing such advisory
services, DAMAL has given 50% shares of the fees received by it to the
assessee. The TPO noticed that the assessee has received share of 70% of the
fees from another AE, Germany for providing liaisoning/marketing support
services to it. Though the assessee had bench marked the transactions under
TNMM with net cost plus margin, the TPO held that the said method is not
acceptable. The TPO further held that the assessee should have taken share
of 70% of fees for advisory services provided to DAMAL also. Accordingly, he
proposed to adjustment of Rs. 1.50 crores to the income returned by the
4. Before the ld. DRP, it was contended that the TPO has proposed
adjustment by using a controlled transaction entered between the assessee
and its AE in Germany to benchmark another controlled transaction entered
into by the assessee with its AEs at Singapore. It was further submitted that
the assessee was providing advisory services to DAMAL, Singapore which is
functionally different from the liasioning/marketing support services provided
to another AE located in Germany. The ld. DRP agreed with both the
contentions of the assessee and accordingly deleted the transfer pricing
adjustment proposed by the TPO.
5. At the time of hearing, the ld. Counsel for the assessee submitted that
an identical adjustment made in the assessee's own case in A.Y. 2006-07
came to be considered by the co-ordinate bench of this Tribunal in ITA No.
7717/Mum/2010 and the Tribunal vide its order dated 12-12-2012 has given
a clear finding that the fee received by the assessee for providing marketing
and liasioning services cannot be equated with the advisory services given to
an investment manager. Accordingly, the Tribunal set aside the adjustment
3 ITA 789/M/11
proposed by the TPO, which had also been confirmed by the ld. DRP in that
year. The ld. Counsel for the assessee further submitted that the TPO, in the
subsequent years, has accepted the fact that the services provided to AEs
located in Singapore and Germany are different and accordingly did not
propose any adjustment in assessment years 2010-11 and 2011-12.
6. The ld. D.R. did not controvert the factual aspects presented by the ld.
Counsel for the assessee.
7. We further notice that the ld. DRP has followed his decision rendered
by it in A.Y. 2008-09 in deciding the issue in favour of the assessee. We have
already seen that the Tribunal, in assessment year 2006-07, has given a
finding that the services provided to AE, Singapore cannot be equated with
the kind of services provided to AE, Germany. Accordingly the Co-ordinate
bench has deleted the TP adjustment made in AY 2006-07. Since the facts
and circumstances of the issue are identical in the instant year also, by
following the order passed by the Tribunal in the hands of the assessee for AY
2006-07, we uphold the order of ld. DRP on this issue.
8. In the result, the appeal filed by the Revenue is dismissed.
Order pronounced in the open court on 12th June, 2015.
(D. MANMOHAN) (B.R. BASKARAN)
VICE PRESIDENT ACCOUNTANT MEMBER
Mumbai; Dated 12-06-2015
. ../ RK , Sr. PS
4 ITA 789/M/11
/Copy of the Order forwarded to :
1. / The Appellant
2. / The Respondent.
3. The DRP, Concerned, , Mumbai
4. TPO, Mumbai
5. , , / DR, ITAT, Mumbai K Bench
6. / Guard file.
/ BY ORDER,
/ (Dy./Asstt. Registrar)
, / ITAT, Mumbai