The Pr. Commissioner Of Income ... vs Warburg Pincus India Pvt. Ltd
2023 Latest Caselaw 11217 Bom

2023:BHC-OS:13053-DB
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                              IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                                  ORDINARY ORIGINAL CIVIL JURISDICTION
                                      INCOME TAX APPEAL NO. 117 OF 2018

            Pr. Commissioner of Income Tax-3                       ....Appellant
                 V/s.
            M/s Warburg Pincus India Pvt Ltd.                      ....Respondent

                                                        ----
            Mr. Suresh Kumar for Appellant.
            Mr. Manish Kanth i/b Mr. Atul K Jasani for Respondent.
                                                ----

                                                    CORAM : K. R. SHRIRAM &
                                                            NEELA GOKHALE, JJ.

DATED : 1st NOVEMBER 2023

P.C. :

1 The following two questions of law were proposed:

A. "Whether, on the facts and in the circumstances of the

case and in law, the Hon'ble Tribunal was right by holding

that M/s. ICRA Ltd. to be excluded and M/s. IDC Ltd. to be

included as comparables ignoring the FAR analysis carried

out by the TPO?"

B. "Whether, on the facts and in the circumstances of the

case and in law, the Hon'ble Tribunal erred by relying upon

several case laws and not judging the comparability of the

facts of this case, though facts of each case are different

and not squarely applicable with the facts of other cases?"

2 The appeal was earlier disposed on 28 th March 2022 since the court

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was informed that substantial questions of law were covered by two

judgments CIT Vs. Carlyle India Advisors (P) Ltd 1. and CIT Vs. Temasek

Holding Advisors India Pvt Ltd. 2 Against this order, revenue had preferred

an SLP and the Apex Court by an order dated 3 rd July 2023 remanded the

matter by passing the following order:

"UPON hearing the counsel the Court made the following Order:

Having heard the learned senior counsel for the parties, we notice the order passed by this Court in the case of M/s. SAP Labs India (P) Ltd. v. CIT dated 16.04.2023 reported in 2023 SCC online SC 449 wherein this Court has set aside similar orders and remanded the matter to the High Court for fresh consideration.

In that view without expressing any opinion on merits, the order impugned herein is set aside. The appeal is restored to the file of the High Court of Judicature at Bombay to re-hear the I.T. Appeal No.117/2018 on all aspects as indicated in the above referred judgment."

3 As regards question no.A proposed, the Transfer Pricing Officer (TPO)

for A.Y.-2009-2010 after considering the submissions made by assessee had

held that ICRA was not comparable due to functional dissimilarity. TPO

had, therefore, held ICRA has to be excluded. If for A.Y.-2009-2010 the TPO

has found ICRA to be excluded, there is nothing on record to indicate that

for A.Y.-2008-2009 ICRA has to be included.

3 As regards IDC Ltd, the Income Tax Appellate Tribunal (ITAT), on

facts of the case came to a conclusion that IDC Ltd has to be included.

Coming to this question, the Tribunal has perused the functional profile of

IDC Ltd. and as mentioned in the annual report of IDC Ltd. has come to a

1 . (2013) 357 ITR 584 (Bom) 2 . Unreported in ITXA No.1051 of 2014 dated 17-11-2016

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conclusion that it operates in a single segment, i.e., market research and

management consulting. The Tribunal has also observed that a coordinate

bench in case of General Atlantic Pvt Ltd. Vs. DCIT3 following another

decision of the same bench, has found IDC as comparable to an investment

advisory service provider. It is not in dispute that respondent is in business

of investment advisory services.

4 The decision of the Tribunal in General Atlantic Pvt Ltd. (Supra) has

been upheld by this court in Commissioner of Income Tax-3, Mumbai Vs.

General Atlantic P Ltd.4 The coordinate bench in Sandstone Capital

Advisors Pvt Ltd Vs. ACIT5 has also found IDC Ltd. to be functionally similar

to investment advisory service provider, hence comparable. A similar view

has also been expressed in Temasek Holdings Advisors India Pvt Ltd .

(supra) and Carlyle India Advisors Pvt Ltd. (Supra). The Tribunal,

therefore, on facts came to a conclusion that IDC Ltd. has to be treated as a

comparable to assessee following the consistent view of the Tribunal in the

decisions referred above.

5 As regards proposed question no.B, in our view, it will be covered by

question no.A.

6 In our view, no substantial question of law arises. Appeal dismissed.

3   (2013) 32 taxmann.com 178 (Mum)
4   (2016) 68 taxmann.com 88 (Bombay)
5   (2013) 32 taxmann.com 216 (Mum)


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(NEELA GOKHALE, J.)                            (K. R. SHRIRAM, J.)




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