The Delhi High Court has admitted appeal in the case of Avenue Asia Advisors Pvt Ltd Vs Deputy Commissioner of Income Tax.

The following questions have been framed for determination in the matter:

1. Was the Income Tax Appellate Tribunal justified in recharacterising the function of the Appellant as a merchant banker and was this in conformity with the sub-advisory agreement dated 1st February 2006.

2. Whether the ITAT was in error in upholding the inclusion of the comparable companies by the TPO considering the business profile of the Assessee as outlined in the transfer pricing documentation.

3. Whether the ITAT erred in upholding the addition of notional interest on the ground of it being an international transaction.

Previously, ITAT, had directed that Khandwala Securities Ltd be excluded from list of comparables while Brescon Corporate Advisors Ltd., Almondz Global Securities Ltd. and Ladderup Corporation Ltd be retained. Regarding the comparable Sumedha Fiscal Services Ltd and risk adjustment the matter was remanded for reconsideration. On the matter of outstanding receivable it was held that they should be examined on transaction to transaction basis and outstanding period should be computed after allowing period available as per industry standard. Accordingly, the matter stood remanded.

The parties have been permitted to file additional papers forming part of the assessment record or which were filed before the ITAT, within eight weeks.