MUKESH SHAH, HUF, MUMBAI V. ITO, WARD -17(2)(4), MUMBAI

ITA 2941/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 4121 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2014-2015
• Appeal Filed On: 07-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AVANEESH TIWARI
• Keywords: Transfer pricing; Principle of natural justice; International transaction; Arm length price; TDS; Set aside
• Section: 92C; 10B; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH I, MUMBAI BEFORE SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.2941/M/2010 ASSESSMENT YEAR: 2005-06 M/S. BARCLAYS BANK PLC, 801-808, CEEJAY HOUSE, DR. ANNIE BESANT ROAD, WORLI, MUMBAI 400 018 PAN: AAACU 1414F VS. ADDITIONAL DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION)-3, SCINDIA HOUSE, BALLARD PIER, MUMBAI - 400038 (APPELLANT) (RE SPONDENT) ITA NO.2117/M/2011 ASSESSMENT YEAR: 2005-06 ADDITIONAL DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION)-3, DDIT (IT)-3(2), SCINDIA HOUSE, R.NO.132, 1 ST FLOOR, N.M. ROAD, MUMBAI - 400038 VS. M/S. BARCLAYS BANK PLC, 21/23, MAKER CHAMBERS VI, NARIMAN POINT, MUMBAI 21 PAN: AAACB 4876G (APPELLANT) (RE SPONDENT) PRESENT FOR: ASSESSEE BY : SHRI MADHUR AGARWAL, A.R. SHRI FENIL BHATT, A.R. REVENUE BY : SHRI AVANEESH TIWARI, SR. D.R. DATE OF HEARING : 13.02.2020 DATE OF PRONOUNCEMENT : 19.03.2020 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: THE ABOVE TITLED CROSS APPEALS HAVE BEEN PREFERRED AGAINST THE ORDER DATED 05.02.2010 OF THE COMMISSIONER OF I NCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A)] R ELEVANT TO ASSESSMENT YEAR 2005-06. ITA NO.2941/M/2010 & ITA NO.2117/M/2011 M/S. BARCLAYS BANK PLC 2 ITA NO.2941/M/2010 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: LEARNED CIT(A) ERRED IN UPHOLDING THE ORDER OF THE ADDITIONAL DIRECTOR OF INCOME- TAX (INTERNATIONAL TAXATION) - 3, MUMBAI, [HEREINAF TER REFERRED TO AS 'THE LEARNED ASSESSING OFFICER'], THEREBY DISPOSING THE APPEAL O F THE APPELLANT ON THE FOLLOWING GROUNDS : 1. IN DISALLOWING INTEREST PAID TO HEAD OFFICE/OVER SEAS BRANCHES OF RS 11,422,709 UNDER SECTION 40(A)(I) OF THE ACT. 2 . IN CONFIRMING THE ADDITION MADE BY THE LEARNED TRAN SFER PRICING OFFICER ('TPO') ON ACCOUNT OF TRANSFER PRICING ADJUSTMENT I N RESPECT OF INTEREST ON SWEEP DEPOSITS AMOUNTING TO RS 50,416. 3. IN CONFIRMING THE ADDITION MADE BY THE LEARNED TPO ON ACCOUNT OF TRANSFER PRICING ADJUSTMENT IN RESPECT OF INTEREST ON DEPOSI TS AMOUNTING TO RS 30,680. 4. IN APPLYING AN ADHOC AND ARBITRARY RATE OF 20 PERCENT OF THE AGENCY FEES AND INTEREST INCOME OF THE OVERSEAS BRANCHES OF THE APP ELLANT AMOUNTING TO RS 6,530,336 FOR THE PURPOSES OF COMPUTING THE ARM'S L ENGTH PRICE IN RESPECT OF THE TRANSACTION RELATING TO ECBS. 3. THE ISSUE RAISED IN FIRST GROUND OF APPEAL IS AG AINST THE CONFIRMATION OF DISALLOWANCE BY LD. CIT(A) OF RS.1, 14,22,709/- AS MADE BY THE AO ON ACCOUNT OF INTEREST PAID TO HE AD OFFICE/OVERSEAS BRANCHES UNDER SECTION 40(A)(I) OF THE ACT. 4. THE FACTS IN BRIEF ARE THAT THE ASSESSEE BEING A FOREIGN BANK HAS PAID INTEREST AMOUNTING TO RS.1,14,22,709/- TO ITS HEAD OFFICE/OVERSEAS BRANCHES. THE ASSESSEE CLAIMED THE SAID INTEREST IN THE PROFIT & LOSS ACCOUNT. ACCORDING T O THE AO THE INTEREST PAYMENTS MADE BY THE ASSESSEE TO HEAD OFFI CE/OVERSEAS BRANCHES IS NOT ALLOWABLE UNDER SECTION 40(A)(I) OF THE ACT AS NO TAXES WERE WITHHELD BY THE ASSESSEE BEFORE MAKING P AYMENT TO THE HEAD OFFICE/OVERSEAS BRANCHES. 5. THE APPEAL OF THE ASSESSEE WAS ALSO DISMISSED BY THE LD. CIT(A) WHO IN VIEW OF CIRCULAR NO.740 OF 1996 ISSUE D BY CBDT AND DECISION OF SPECIAL BENCH OF KOLKATA ITAT IN TH E CASE OF ABM IMPORT BANK 98 TTJ 295 (215) AFFIRMED THE DISAL LOWANCE. ITA NO.2941/M/2010 & ITA NO.2117/M/2011 M/S. BARCLAYS BANK PLC 3 6. AT THE OUTSET, THE LD. COUNSEL OF THE ASSESSEE S UBMITTED THAT THE CASE OF THE ASSESSEE IS SQUARELY COVERED B Y THE DECISION OF CO-ORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO.178/M/2011 A.Y. 2006-07 & OTHER VIDE ORDER D ATED 12.01.2018 IN WHICH THE CO-ORDINATE BENCH OF THE TR IBUNAL HAS HELD THAT NO TDS IS REQUIRED TO BE HELD ON INTEREST PAID BY THE MUMBAI BRANCH OF THE ASSESSEE TO ITS HEAD OFFICE/OV ERSEAS BRANCHES AND ACCORDINGLY DECIDED THE ISSUE IN FAVOU R OF THE ASSESSEE. THE LD. A.R., THEREFORE, PRAYED THAT THE SAME MAY KINDLY BE DECIDED IN FAVOUR OF THE ASSESSEE BY ALLO WING THE GROUND RAISED. THE LD. A.R. ALSO RELIED ON THE DEC ISION OF HONBLE KOLKATA HIGH COURT IN THE CASE OF ABN IMPOR T BANK NV VS. CIT 343 ITR 81 (KOL) IN WHICH IDENTICAL ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE AND SPECIAL LEAVE PETITION FILED BY THE DEPARTMENT BEFORE HONBLE SUPREME COURT OF I NDIA AGAINST THE SAID ORDER WAS ALSO DISMISSED VIDE ORDE R DATED 03.08.2012. THE LD. A.R. ALSO RELIED ON THE FOLLOW ING DECISIONS: 1. SUMITOMO MITSUI BANKING CORP. VS. DDIT (IT) (16 ITR (T)116) (MUMBAI SPECIAL BENCH) (2012) 2. ROYAL BANK OF SCOTLAND N.V. VS. DDIT (IT) (47 IT R (T) 513) (KOLKATA ITAT) (2017) 3. DBS BANK LTD. VS. DDIT (IT) (66 TAXMANN.COM 173) (MUMBAI ITAT) (2016) 4. BANK OF TOKYO MITSUBISHI LTD. VS. DDIT (IT) (53 TAXMANN.COM 105) (CALCUTTA HIGH COURT) 7. FINALLY, THE LD. A.R. PRAYED THAT IN VIEW OF THE DECISION OF THE CO-ORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE IN A.Y. 2006-07 AND VARIOUS OTHER DECISIONS AS CITED A BOVE, THE GROUND RAISED BY THE ASSESSEE MAY BE ALLOWED BY DIR ECTING THE ITA NO.2941/M/2010 & ITA NO.2117/M/2011 M/S. BARCLAYS BANK PLC 4 AO TO ALLOW THE DEDUCTION OF INTEREST PAID OF RS.1, 14,22,709/- TO HEAD OFFICE/OVERSEAS BRANCHES. 8. THE LD. D.R., ON THE OTHER HAND, RELIED ON THE O RDER OF AUTHORITIES BELOW. 9. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD AND THE ORDER OF CO-ORDINATE BENCH OF THE TR IBUNAL IN ITA NO.178/M/2011 A.Y. 2006-07 (SUPRA), WHEREIN THE IDE NTICAL ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE. THE CO- ORDINATE BENCH OF THE TRIBUNAL HAS FOLLOWED THE DEC ISION OF HONBLE KOLKATA HIGH COURT IN THE CASE OF ABN IMPOR T BANK NV VS. CIT (SUPRA) WHEREIN THE HONBLE KOLKATA HIGH CO URT HAS HELD THAT NO TDS IS REQUIRED TO BE WITHHELD ON THE INTER EST PAID BY INDIAN BRANCHES TO FOREIGN HEAD OFFICE/OVERSEAS BRA NCHES. THE SLP FILED BY THE DEPARTMENT IN THE HONBLE SUPREME COURT HAS ALSO BEEN DISMISSED VIDE ORDER DATED 03.08.2012. W E, THEREFORE, FOLLOWING THE RATIO LAID DOWN AS STATED HEREINABOVE , SET ASIDE THE ORDER OF LD. CIT(A) AND DIRECT THE AO TO ALLOW THE DEDUCTION OF INTEREST PAID TO HEAD OFFICE/OVERSEAS BRANCHES. THE GROUND NO. 1 IS ALLOWED AND THE AO IS DIRECTED ACCORDINGLY. 10. GROUND NOS.2 & 3 ARE NOT PRESSED AND ACCORDINGL Y THE SAME ARE DISMISSED. 11. THE ISSUE RAISED IN GROUND NO.4 IS AGAINST THE CONFIRMATION OF ADDITION OF RS.65,30,336/- BY LD. CIT(A) AS MADE BY THE TPO/AO BY APPLYING 20% OF THE AGENCY FEE AND INTER EST INCOME OF THE OVERSEAS BRANCHES OF THE ASSESSEE FO R COMPUTING THE ARM LENGTH PRICE IN RESPECT OF SERVICES RENDERE D BY THE ITA NO.2941/M/2010 & ITA NO.2117/M/2011 M/S. BARCLAYS BANK PLC 5 ASSESSEE IN CONNECTION WITH THE TRANSACTIONS RELATI NG TO EXTERNAL COMMERCIAL BORROWINGS. 12. THE FACTS IN BRIEF ARE THAT DURING THE YEAR UND ER CONSIDERATION THE ASSESSEE HAS RENDERED CERTAIN COO RDINATION SERVICES FOR EXTERNAL COMMERCIAL BORROWINGS BY INDI AN COMPANIES FROM OVERSEAS AES OF THE ASSESSEE. THE A SSESSEE OFFERED 20% OF THE FEE INCOME FROM EXTERNAL COMMERC IAL BORROWING DURING THE YEAR BY THE AE AS CONSIDERATIO N FOR THE SERVICES RENDERED BY THE ASSESSEE IN CONNECTION WIT H THE SAID EXTERNAL COMMERCIAL BORROWINGS BY INDIAN COMPANIES FROM FOREIGN AES. ACCORDING TO THE TPO THE MOST OF THE BRANCHES ARE FOREIGN BANKS OPERATING IN INDIA ARE SHOWING 25% OF TOTAL INTEREST AND FEE RECEIVED BY OVERSEAS BRANCHES AS I NCOME ON MARKETING OF ECBS. THE TPO ALSO NOTED THAT ASSESSE E HAS NOT COME UP WITH A SINGLE UNCONTROLLED TRANSACTION AND THUS THE ONUS OF BENCHMARKING WAS NOT DISCHARGED. ACCORDING LY, TPO MADE AN ADDITION OF RS.81,62,920/- BASED ON A REVEN UE SPLIT OF TOTAL INTEREST AND FEE. TPO ALSO STATED THAT IN AB SENCE OF AN UNCONTROLLED DATA FOR THE PURPOSE OF BENCHMARKING, IT WAS CONSIDERED APPROPRIATE TO USE CONTROL DATA AVAILABL E. 13. IN THE APPELLATE PROCEEDINGS, THE LD. CIT(A) PA RTLY ALLOWED THE APPEAL OF THE ASSESSEE BY DIRECTING TO APPLY RA TE OF 20% OF TOTAL INTEREST AND FEE AS AGAINST 25% AND THUS THE ADJUSTMENT WAS REDUCED TO RS.65,30,336/-. WHILE DOING SO, THE LD CIT(A) RELIED ON THE ORDER PASSED BY CIT(A) IN THE EARLIER YEARS. THE LD. A.R. CONTENDED BEFORE THE BENCH THAT IT HAS A VERY LIMITED ROLE AND THE CO-ORDINATION ACTIVITIES RENDERED BY THE A SSESSEE DID NOT RESULT IN ANY INCREMENTAL COST TO THE ASSESSEE AND THEREFORE ITA NO.2941/M/2010 & ITA NO.2117/M/2011 M/S. BARCLAYS BANK PLC 6 NO RECOVERY WAS MADE BY BARCLAYS INDIA IN THIS REGA RD. THE LD. A.R. SUBMITTED THAT THE PRIMARY CONTRIBUTION OF AS SESSEE WAS LIMITED TO ESTABLISHING INITIAL CONTACT WITH RESIDE NT CORPORATE AND FINANCIAL INSTITUTIONS AND THEREAFTER THE ACTING AS LIAISON BETWEEN CLIENTS AND OVERSEAS OFFICES. THE LD AR AR GUED THAT THEREAFTER EXTERNAL COMMERCIAL BORROWINGS WERE GRAN TED TO THE CUSTOMERS BY THE OVERSEAS BRANCHES AND ALL RISKS WI TH RESPECT TO THE LOANS INCLUDING RISK OF FOREX FLUCTUATION ARE B ORNE BY THE OVERSEAS BRANCHES. THE LD. AR SUBMITTED THAT THE AS SESSEE IS NOT SUBJECT TO ANY MAINTENANCE OF ANY RESERVE REQUI REMENT IN ACCORDANCE WITH THE CAPITAL ADEQUACY NORMS APPLICA BLE TO THE BANKING COMPANY WHILE THE OVERSEAS BRANCHES BOOKING THE LOANS WOULD BE AS PER THE LOCAL REGULARITY REQUIREM ENTS OF THAT JURISDICTION. ACCORDINGLY, NO PORTION OF INTEREST INCOME EARNED BY THE AE SHOULD BE APPORTIONED TO THE ASSESSEE. F URTHER, THE LD. COUNSEL SUBMITTED THAT ASSESSEE HAS ALREADY OFF ERED TO TAX 20% OF THE FEES EARNED BY OVERSEAS BRANCHES PRIMARI LY FOR MINIMIZING LITIGATION ON THE SAID ISSUE. LD. COUNS EL ALSO SUBMITTED THAT TPO & CIT(A) HAVE ARBITRARILY APPORT IONED TOTAL INTEREST TO THE ASSESSEE ON THE SAID TRANSACTIONS W ITHOUT APPLYING ANY SPECIFIC/APPROPRIATE METHOD FOR BENCHM ARKING THESE TRANSACTIONS. THE LD. A.R. SUBMITTED THAT TH E ISSUE IS SQUARELY COVERED BY THE DECISION OF CO-ORDINATE BEN CH OF THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO.172/M/201 1 A.Y.2006-07 & OTHERS VIDE ORDER DATED 12.01.2018 WH EREIN IT WAS HELD THAT 20% OF THE FEE EARNED BY OVERSEAS BRA NCHES SHOULD BE ASSESSED AS ALP OF THE TRANSACTIONS OF MA RKETING OF EXTERNAL COMMERCIAL BORROWINGS FOR THE FOREIGN AES AND ITA NO.2941/M/2010 & ITA NO.2117/M/2011 M/S. BARCLAYS BANK PLC 7 ACCORDINGLY A CONSISTENT VIEW SHOULD BE TAKEN AND T HE GROUND OF THE ASSESSEE MAY KINDLY BE ALLOWED. 14. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD, WE OBSERVE THAT IN THIS CASE THE CO-ORDINAT E BENCH OF THE TRIBUNAL HAS ALREADY TAKEN A VIEW IN ITA NO.178/M/2 011 A.Y. 2006-07 & OTHERS WHEREIN THE CO-ORDINATE BENCH OF T HE TRIBUNAL HAS HELD THAT THE 20% OF THE FEES EARNED BY THE FOR EIGN BRANCHES SHOULD BE ASSESSED AS ALP OF THE TRANSACTIONS OF MA RKETING OF EXTERNAL COMMERCIAL BORROWINGS BY THE ASSESSEE. TH E OPERATIVE PART IS REPRODUCED AS UNDER: 4.4.WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIAL BEFORE US. WE FIND THAT THE ASSESSEE WAS PLAYING A VERY LIMITE D ROLE IN THE SEQUENCE OF ACTIVITIES OF SANCTIONING OF LOAN BY THE AE.S TO TH E INDIAN CUSTOMERS. THE CONTRIBUTION ON PART OF THE ASSESSEE WAS LIMITED TO ESTABLISHING INITIAL CONTACT WITH INDIAN ENTITIES AND ACTING AS A LIAISON BETWEE N THE AE AND THE CUSTOMER. IT IS A FACT THAT LOAN WAS GRANTED BY THE AE.S AND ALL TH E GAINS AND RISKS OF THE TRANSACTION WAS WITH THEM ONLY. THE ASSESSEE WAS CO MPENSATED BY THE AE.S FOR THE JOB DONE BY IT. AS FAR AS INTEREST INCOME IS CO NCERNED, IT IS CLEAR THAT THERE WAS NO CONTRACT /AGREEMENT BETWEEN THE ASSESSEE AND THE AE.S TO SHARE THE INTEREST AMOUNT. THE ASSESSEE IS OBJECTING TO THE ADJUSTMENT MADE UNDER THE HEAD INTEREST INCOME. IT HAS NO OBJECTION WITH REGARD TO THE OTHER PORTION OF THE ADJUSTMENT. SO, WE DIRECT THE TPO/AO THAT ONLY 20% OF THE AGENCY FEE SHOULD BE ATTRIBUTED TO THE ASSESSEE AND THE INTEREST ATTRIBU TED TO ITS INCOME SHOULD BE DELETED. HERE, WE WOULD LIKE TO REFER TO THE CASE OF M/S CRE DIT LYONNAIS (SUPRA), WHEREIN IDENTICAL ISSUE HAS BEEN DISCUSSED AS FOLLOWS: '8.8 HAVING HELD THAT PARA 4 OF THE PROTOCOL DOES N OT APPLY TO THE CASE OF THE ASSESSEE, NOW, THE QUESTION ARISES AS TO WHETHE R THE ADJUSTMENT MADE BY THE AUTHORITIES BELOW IS JUSTIFIED. FOR MAKING T HE ADJUSTMENT, THE AUTHORITIES BELOW HAVE TAKEN INTO CONSIDERATION, TH E INCOME TOWARDS INTEREST AS WELL AS THE FEE CHARGED BY THE FOREIGN BRANCH FROM THE CLIENTS. IT IS PERTINENT TO NOTE THAT WHEN THE LOAN IS PROVIDED BY THE SYNDICATE AND THE ASSESSEE HAS NOT CONTRIBUTED TO THE LOAN AMOUNT THE N AS REGARDS THE INCOME OF INTEREST, THE SAME CANNOT BE ATTRIBUTED T O THE USSESSEE FOR PROVIDING THE SERVICES OF THE FINANCIAL ANALYSIS OF THE BORROWERS, MARKET CONDITION AND REGULATORY ENVIRONMENT IN INDIA. SINC E THE ASSESSEE HAS PROVIDED CERTAIN SERVICES FOR THAT ARMS LENGTH CHAR GES CAN BE DETERMINED AS PER THE PROVISIONS OF TRANSFER PRICING REGULATION. THE TPO AS WELL AS CIT(A) HAS NOT BROUGHT OUT ANY COMPARABLE FOR DETERMIN ATION OF THE ARMS LENGTH PRICE BUT LOOK THE TOTAL INCOME COMPRISING INTEREST AS WELL AS OTHER FEES ITA NO.2941/M/2010 & ITA NO.2117/M/2011 M/S. BARCLAYS BANK PLC 8 CHARGED BY THE FOREIGN BRANCHES FOR ALLOCATION/ATTR IBUTION TO THE ASSESSEE. IN THIS CASE, THE ALP HAS NOT BEEN DETERMINED BY TA KING INTO CONSIDERATION UNCONTROLLED SIMILAR TRANSACTION. IN OUR VIEW, THE INTEREST CANNOT BE TAKEN INFO ACCOUNT FOR ATTRIBUTION OF INCOME TOWARDS SERV ICE CHARGES/FEES AND, THEREFORE, IN THE FACTS AND CIRCUMSTANCES OF THE CA SE ONLY THE FEE CHARGED BY THE FOREIGN BRANCHES CAN BE TAKEN INTO CONSIDERATIO N FOR MAKING ADJUSTMENT UNDER TRANSFER PRICING PROVISIONS.' THE ABOVE DECISION OF THE TRIBUNAL WAS UPHELD BY TH E HON'BLE BOMBAY HIGH COURT IN ITA NO.1781 OF 2014.CONSIDERING THE AFORESAID FA CTS, GROUND NO.3 IS DECIDED IN FAVOUR OF THE ASSESSEE, IN PART. 15. WE, RESPECTFULLY, FOLLOWING THE DECISION OF THE CO-ORDINATE BENCH, SET ASIDE THE ORDER OF LD. CIT(A) AND DIRECT THE TPO/AO TO DELETE THE ADDITION. ACCORDINGLY, THE GROUND RAI SED BY THE ASSESSEE IS ALLOWED. THE APPEAL OF THE ASSESSEE IS ALLOWED. ITA NO.2117/M/2011 16. THE GROUND RAISED BY THE REVENUE ARE AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE ID. CIT (APPEALS) ERRED IN DELETING THE ADDITION OF RS.37,4 4,80,696/- MADE BY THE ASSESSING OFFICER/TRANSFER PRICING OFFICER ON ACCOUNT OF RECE IPT OF SALES CREDIT RELATING TO DERIVATIVE DEALS BY OBSERVING THAT THE COST PL US MARGIN OF 335% EARNED BY THE ASSESSEE WAS FAR MORE THAN 24.19% EARNED BY COMPARA BLE COMPANIES. THE ID. CIT (APPEALS) ERRED IN NOT APPRECIATING THAT TNM METHOD WAS NOT THE MOST APPROPRIATE METHOD IN THIS CASE BECAUSE THE PROFIT FROM MARKETI NG OF DERIVATIVES WAS NOT A COST DRIVEN, ACTIVITY BUT WAS DRIVEN BY THE ASSESSEE'S C USTOMER RELATIONSHIP. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE ID. CIT(APPEALS) ERRED IN HOLDING 25% OF INITIAL NET PR ESENT VALUE (INPV) AS AGAINST 60% ADOPTED BY TRANSFER PRICING OFFICER. 3. THE APPELLANT PRAYS THAT THE ORDER OF THE ID, CI T (APPEALS) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFI CER RESTORED. 4. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY.' 16. THE ONLY ISSUE RAISED BY THE REVENUE IS AGAINST THE DELETION OF RS.37,44,80,696/- BY LD. CIT(A) AS MADE BY THE A O/TPO ON ITA NO.2941/M/2010 & ITA NO.2117/M/2011 M/S. BARCLAYS BANK PLC 9 ACCOUNT OF RECEIPT OF SALES CREDIT RELATING TO DER IVATIVE DEALS AS THE LD CIT(A) FAILED TO APPRECIATE THAT TNMM WAS NO T THE MOST APPROPRIATE METHOD. 17. THE FACTS IN BRIEF ARE THAT DURING THE YEAR THE ASSESSEE HAS RENDERED MARKETING SERVICES IN RESPECT OF DERIVATIV E PRODUCTS OFFERED BY THE AES AND RECEIVED CONSIDERATION AMOU NTING TO RS.27,48,38,625/- FOR THE SAID SERVICES. ACCORDING TO THE TPO THE BENCHMARKING ANALYSIS DONE BY THE ASSESSEE USIN G EXTERNAL COMPARABLES USING TNMM METHOD WERE OF THOSE COMPANI ES WHICH ARE IN THE BUSINESS OF FINANCING/LEASING AND CONSULTANCY SERVICES AND NONE OF THEM PROVIDED SERVICES PERTAIN ING TO MARKETING DERIVATIVE PRODUCTS AND THUS ASSESSEE HAS FAILED TO CARRY OUT THE BENCHMARKING ANALYSIS BY USING FUNCTI ONAL COMPARABILITY OF THE COMPARABLES. TPO, IN ABSENCE OF ANY APPROPRIATE DATA TO BENCHMARK THE SAID TRANSACTIONS , CONSIDERED THE MARGIN OF 60% OF INITIAL NET PRESENT VALUE AS SHOWN BY THE FOREIGN BANKS SUCH AS JP MORGAN CHASE BANK AND BANK OF AMERICA ,NA UNDER SIMILAR ARRANGEMENTS WITH THEIR AES AS APPROPRIATE BENCHMARK FOR THE SAID TRANSACTIONS. 18. THE LD. CIT(A) ACCEPTED THE BENCHMARKING ANALYS IS UNDERTAKEN BY THE ASSESSEE BASED ON TNMM RELYING ON THE PAST ORDER IN THE CASE OF THE ASSESSEE AND LD. CIT(A) AL SO HELD THAT THE COMPENSATION RECEIVED BY THE ASSESSEE IS IN ACC ORDANCE WITH GLOBAL TRANSFER PRICING POLICY AND SAME CANNOT BE A LTERED IN AN ADHOC MANNER WITHOUT ANY BASIS. THE LD. CIT(A) NOT ED THAT TPO HAD BENCHMARKED THE SAID TRANSACTIONS USING CONTROL LED TRANSACTIONS I.E. ARRANGEMENTS ENTERED INTO BY VARI OUS NON RESIDENT BANKS WITH THEIR INDIAN COUNTERPARTS AND B ASED ON ITA NO.2941/M/2010 & ITA NO.2117/M/2011 M/S. BARCLAYS BANK PLC 10 OECD COMMENTARY, RULE 10A, RULE 10B OF THE RULES AN D HELD THAT CONTROLLED TRANSACTION CAN NOT BE CONSIDERED T O BE BASIS FOR BENCHMARKING ANOTHER CONTROLLED TRANSACTION. THE L D. CIT(A) OBSERVED THAT METHOD AND STATISTICAL MODELS FOR CAL CULATION OF INITIAL NET PRESENT VALUE MAY VARY FROM BANK TO BAN K AND SIMILARLY THE EXTENT OF SERVICES RENDERED FOR MARKE TING DERIVATIVE PRODUCTS ALSO VARY. THE LD. CIT(A) ALSO HAS OBSERV ED THAT TPO WAS UNABLE TO FURNISH DATA/INFORMATION/DOCUMENTS SUBSTANTIATING THE USE OF ADHOC 60% OF INITIAL NET PRESENT VALUE FOR THE PURPOSE OF BENCHMARKING AND ACCORDINGLY HEL D THAT IT IS NOT APPROPRIATE TO CONSIDER 60% OF INITIAL NET PRES ENT VALUE AS ALP. 19. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD, WE OBSERVE THAT LD. CIT(A) HAS RIGHTLY REJE CTED THE ADHOC APPORTIONMENT OF 60% OF INITIAL NET PRESENT VALUE B Y TPO WITHOUT APPLYING ANY APPROPRIATE METHOD FOR BENCHM ARKING THE TRANSACTIONS AS TPO IS UNDER OBLIGATION TO BENCHMAR K THE TRANSACTION BY USING ONE OF THE METHODS PRESCRIBED UNDER THE ACT. WE ALSO NOTE THAT CONTROLLED TRANSACTION CAN NOT BE USED FOR THE PURPOSE OF BENCHMARKING OTHER CONTROLLED TR ANSACTION. WE ALSO NOTE THAT THE ISSUE IS SQUARELY COVERED BY THE DECISION OF CO-ORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO.178/M/2011 & OTHERS FOR A.Y. 2006-07 & ORS. ORDE R DATED 12.01.2018 WHEREIN THE SIMILAR ADDITIONS WERE DELET ED BY THE TRIBUNAL BY HOLDING AS UNDER: 5.3.WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIAL BEFORE US. WE FIND THAT ONE OF THE DIVISIONS OF THE ASSESSEE I.E. BARCLAYS CAPITAL WOULD HANDLE THE GLOBAL DERIVATIVE OPERATIONS, THAT SAME INCLUDED FO REIGN EXCHANGE, INTEREST RATE, EQUITY, COMMODITY AND CREDIT DERIVATIVES, THAT THE ACTIVITIES OF THE ASSESSEE WERE LIMITED TO MARKETING ACTIVITIES, THAT THE AE.S WERE CONCLUDING THE SALE-TRANSACTION, ITA NO.2941/M/2010 & ITA NO.2117/M/2011 M/S. BARCLAYS BANK PLC 11 THAT FOR THE YEAR UNDER CONSIDERATION THE ASSESSEE WAS COMPENSATED AT THE RATE OF 24%(APPROXIMATELY)OF THE ESTIMATED DAY-1PROFIT/LOSS FROM THE SAID DEALS IN ACCORDANCE WITH THE GTPP OF THE GROUP, THAT THE TPO HAD REJECTED THE TNMM APPLIED BY THE ASSESSEE AND HAD USED PSM FOR BENCHM ARKING THE TRANSACTION OF MARKETING OF DERIVATIVE PRODUCTS, THAT HE CONCLUDED THAT RISK RELATING TO THE DERIVATIVE BUSINESS REMAINED PARTLY IN INDIA AND PA RTLY OUTSIDE INDIA AND THAT THE KEY ASSETS IN DERIVATIVE WERE ITS PEOPLE, THAT ONE OF THE FOREIGN BANK BRANCH WAS BEING COMPENSATED AT THE RATE OF 60% FOR THE SAME D ERIVATIVE BUSINESS, THAT HE MADE AN ADDITION OF RS.51.12 CRORES, THAT THE FAA G RANTED RELIEF TO THE ASSESSEE. WE FIND THAT THE TPO HAD ACCEPTED, IN PRINCIPLE, TH AT THE FUNCTIONAL ROLE OF THE ASSESSEE WAS LIMITED TO RENDERING THE MARKETING SER VICES TO OVERSEAS BRANCHES, THAT REST OF THE ACTIVITIES WERE HANDLED BY THE AE.S. TH E DERIVATIVE TRANSACTION DOES NOT END WITH MARKETING. IT IS A COMPLEX PROCESS. SO, T HE AE WOULD COMPENSATE THE ASSESSEE FOR THE SERVICES RENDERED TO IT. THERE WOU LD ALWAYS BE A RELATION BETWEEN THE COMPENSATION PAID AND AVAILED SERVICES. THE ASS ESSEE HAD ADOPTED THE GTPP TO DETERMINE ALP OF THE IT.S. IN OUR OPINION, THERE WA S NO DEFECT IN ITS APPROACH. ON THE OTHER HAND, METHOD APPLIED BY THE TPO AND THE D ETAILS OF CONTROLLED TRANSACTIONS, RELIED UPON BY HIM, WERE NOT AVAILABL E IN THE PUBLIC DOMAIN. THE ASSESSEE DID NOT HAVE ANY OPPORTUNITY TO EXAMINE TH E COMPARABILITY OF FAR OF THE TRANSACTIONS SELECTED BY THE TPO. IN OUR OPINION, U SE OF UNTESTED COMPARABLES TO DETERMINE THE ALP IS AGAINST THE BASIC SPIRIT OF TH E TP PROVISIONS AND THE RULE 10 OF THE RULES THE TPO HAD ALSO VIOLATED THE PRINCIPLES OF NATURAL JUSTICE BY NOT CONFRONTING THE ASSESSEE WITH THE COMPARABLES USED AGAINST IT. HE PROPOSED AN ADDITION OF RS. 51.12 CRORES TO THE INCOME OF THE A SSESSEE WITHOUT AFFORDING AN OPPORTUNITY TO IT, SO THAT IT COULD BECOME AWARE OF THE BASIS FOR THE ADJUSTMENT. ONLY ON THIS COUNT THE ADJUSTMENT COULD BE VALIDLY DELETED. 5.4. BUT, WE WOULD LIKE DECIDE THE ISSUE ON MERITS ALSO. IT IS FOUND THAT THE ASSESSEE HAD FOLLOWED GTPP FOR TP PURPOSES, THAT AS PER THE GLOBAL POLICY THE INDIAN BRANCHES-RENDERING THE SERVICES AND ARRANGIN G FOR THE SALES OF THE DERIVATIVE PRODUCTS FOR ITS CUSTOMERS FROM ITS FOREIGN BRANCHE S- WERE TO GET AT 24.40 PERCENT OF THE INPV. THE APPELLANT HAD CARRIED OUT A TP STU DY AND HAD APPLIED TNMM FOR DETERMINING THE ALP. WE FIND THAT THE AVERAGE COST PLUS MARGIN OF THE UNCONTROLLED COMPARABLES WAS 19% AND IN THE ASSESSEE'S CASE, COS T PLUS MARGIN WAS 424%. IF WE LOOK AT THESE FIGURES, IT BECOMES CLEAR THAT COMPEN SATION RECEIVED BY THE ASSESSEE FROM ITS AE FOR DERIVATIVE DEAL WAS AT ARM'S LENGTH . INPV OF A DERIVATIVE TRANSACTION IS CALIBRATED BASED ON PROJECTION OF EXPECTED CASH FLOW ON A DERIVATIVE TRANSACTION AND APPLYING APPROPRIATE DISCOUNTING FACTOR. INPV C ALCULATION CAN BE DIFFERENT FOR DIFFERENT BANKS BECAUSE OF THEIR FUNCTIONING. SO, I N OUR OPINION IT WOULD BE INAPPROPRIATE TO APPLY FOR A UNIFORM MULTIPLIER EFF ECT ON THE VALUE OF SALES CREDIT/INPV OF DERIVATIVE TRANSACTIONS. IN OTHER WO RDS, THE INPV FIXED BY INDIAN BRANCH OF ANOTHER FOREIGN BANK IN INDIA SHOULD NOT HAVE BEEN COMPARED WITH THE ASSESSEE CASE, BECAUSE THE ABOVE SAID BRANCH OF THE FOREIGN BANK ITSELF WAS DEALING WITH ITS ANOTHER AE. IN SHORT, WE HOLD THAT THE MET HODOLOGY ADOPTED BY THE TPO, FOR DETERMINING THE ALP OF INPV OF THE DERIVATIVE T RANSACTIONS, WAS INCORRECT FROM THE VERY BEGINNING AND WAS FUNDAMENTALLY WRONG. WE WOULD LIKE TO REFER TO THE CASE OF TECHNIMONT ICB(P.)LTD.(SUPRA) AND IT READS AS UNDER: ITA NO.2941/M/2010 & ITA NO.2117/M/2011 M/S. BARCLAYS BANK PLC 12 '14. WHAT IS AN 'UNCONTROLLED TRANSACTION' HAS BEEN CLEARLY DEFINED UNDER RULE 10A(A) TO MEAN 'A TRANSACTION BETWEEN ENTERPRI SES OTHER THAN ASSOCIATED ENTERPRISES WHETHER RESIDENT OR NON- RES IDENT'. A PLAIN READING OF THE MEANING GIVEN TO THE EXPRESSION 'UNCONTROLLED T RANSACTION1 LEAVES NO ROOM FOR ANY DOUBT THAT IT IS A TRANSACTION BETWEEN TWO NON-ASSOCIATED ENTERPRISES. IF THE TRANSACTION IS BETWEEN TWO ASSO CIATED ENTERPRISES, IT GOES OUT OF THE AMBIT OF' UNCONTROLLED TRANSACTION' UNDE R RULE 10A.WHEN SECTION 92C IS READ ALONG WITH RULES 10B(E), AND 10A, IT BE COMES ABUNDANTLY CLEAR THAT IN COMPUTING ALP UNDER THE TRANSACTIONAL NET M ARGIN METHOD, A COMPARISON OF THE ASSESSEE'S NET PROFIT MARGIN FROM INTERNATIONAL TRANSACTIONS WITH ITS AES HAS NECESSARILY TO BE MAD E WITH THAT OF THE NET PRO FIT MARGIN REALIZED BY THE SAME ENTERPRISE OR AN UN RELATED ENTERPRISE FROM A COMPARABLE BUT DEFINITELY UNCONTROLLED TRANSACTION I.E., A TRANSACTION BETWEEN NON-ASSOCIATED ENTERPRISES. THERE IS NO STA TUTORY SANCTION FOR ROPING IN A COMPARABLE CONTROLLED TRANSACTION FOR T HE PURPOSES OF BENCHMARKING. WHEN IT HAS BEEN CLEARLY MANDATED IN ALL THE RELEVANT METHODS FOR DETERMINING ALP THAT THE COMPARISON HAS TO BE MADE BY THE ENTERPRISE'S INTERNATIONAL TRANSACTION WITH COMPARA BLE UNCONTROLLED TRANSACTION, BY NO SHEER LOGIC A COMPARABLE CONTROL LED TRANSACTION CAN BE EMPLOYED FOR THE PURPOSES OF MAKING COMPARISON. THE RE IS NO WARRANT FOR DILUTING THE PRESCRIPTION GIVEN BY THE STATUTE OR R ULES WHEN SUCH PRESCRIPTION ITSELF SERVES THE ENDS OF JUSTICE PROP ERLY AND IS INFALLIBLE. IF THE VIEW OF THE REVENUE THAT A CONTROLLED TRANSACTION S HOULD NOT BE SHUNTED OUT FOR THE PURPOSES OF BENCHMARKING IS ACCEPTED, THEN ALL THE RELEVANT PROVISIONS CONTAINED IN CHAPTER X IN THIS REGARD, W ILL BECOME OTIOSE. IF SUCH A CONTENTION OF MAKING COMPARISON WITH A COMPARABLE CONTROLLED TRANSACTION IS TAKEN TO ITS LOGICAL CONCLUSION, THE N THERE WILL NEVER ARISE ANY NEED TO TAKE UP ANY CASE FOR TRANSFER PRICING SCRUT INY. THE REASON IS OBVIOUS. ALP IS DETERMINED FOR APPLICATION IN RESPECT OF TRA NSACTIONS BETWEEN TWO AES SO THAT THE PROFIT LIKELY TO ARISE FROM SUCH TR ANSACTIONS IS NOT UNDER- REPORTED VIS-A-VIS FROM SIMILAR TRANSACTIONS WITH T HIRD PARTIES. IF THE COMPARISON IS MADE AGAIN WITH NET PROFIT MARGIN REA LIZED FROM TRANSACTIONS BETWEEN TWO AES, INSTEAD OF THIRD PARTIES, IT MAY D EMONSTRATE THE SAME COOKED RESULTS IN BOTH THE SITUATIONS, THEREBY LEAV ING NO SCOPE FOR ANY ADJUSTMENT. IN THIS EVENTUALITY, THE VERY OBJECT OF SUCH PROVISIONS WILL BE FRUSTRATED. THUS IT FOLLOWS THAT THE ALP CAN BE DET ERMINED ONLY BY MAKING COMPARISON WITH A COMPARABLE UNCONTROLLED TRANSACTI ON AND NOT A COMPARABLE CONTROLLED TRANSACTION.' WE ARE OF THE OPINION THAT THE FAA HAD RIGHTLY HELD THAT THE TPO WAS NOT JUSTIFIED IN CONSIDERING JP MORGAN CHASE BANK AND BANK OF AMERIC A, NA HAVING SIMILAR ARRANGEMENTS WITH THEIR AES AS APPROPRIATE COMPARAB LES FOR THE AFORESAID TRANSACTION. 5.5. WE ALSO FIND THAT THE METHOD APPLIED BY THE TP O IS NOT PSM AS DEFINED UNDER THE RULES. RULE 10B OF THE RULES STIPULATES T HAT THE FOR THE PURPOSE OF APPLYING PSM THE NET PROFIT DERIVED BY THE AE FROM THE INTERNATIONAL TRANSACTIONS IS TO BE CONSIDERED. HOWEVER, THE TPO HAS MADE THE ADJ USTMENT BY TAKING 60% OF DAY 1 INPV, WHICH IS A HYPOTHETICAL VALUE REPRESENTING THE GROSS SURPLUS CASH. IN THE ITA NO.2941/M/2010 & ITA NO.2117/M/2011 M/S. BARCLAYS BANK PLC 13 MATTER OF JOHNSON & JOHNSON LTD. (247 TAXMAN 136) T HE HON'BLE BOMBAY HIGH COURT HAS HELD THAT THE TPO IS OBLIGED UNDER THE LA W TO DETERMINE THE ALP BY FOLLOWING ANY ONE OF THE PRESCRIBED METHODS OF DETE RMINING THE ALP AS DETAILED IN SECTION 92C(1) OF THE ACT, THAT THE DETERMINATION OF THE ALP HAS TO BE DONE ONLY BY FOLLOWING ONE OF THE METHOD PRESCRIBED UNDER THE ACT. WE ARE ALSO AGREEABLE TO THE ARGUMENT SUBMITTED BY THE ASSESSEE THAT THE PSM CAN NEVER BE APPLIED FOR BENCHMARKING MARKETING SUPPORT SERVICE FUNCTIONS. A S PER RULE 10B(D),PSM IS APPLICABLE 'MAINLY IN IT.S INVOLVING TRANSFER OF UN IQUE INTANGIBLES OR IN MULTIPLE IT.S WHICH ARE SO INTER-RELATED THAT THEY CANNOT BE EVAL UATED SEPARATELY FOR THE PURPOSE OF DETERMINING THE ALP OF ANY ONE TRANSACTION. 5.6. WE ARE NOT INCLINED TO REFER THE MATTER TO THE FILE OF THE TPO. WE WOULD LIKE TO REFER TO THE CASE OF KODAK INDIA(P)LTD.(155TTJ69 7)WHEREIN THE TRIBUNAL HAS HELD AS UNDER: '69.WE ALSO CANNOT AGREE WITH THE DR THAT THE ISSUE BE RESTORED TO THE TPO BECAUSE THE METHODS, AS PRESCRIBED BY THE LEGISLATU RE ARE MANDATORY, NOT DIRECTORY. WHEN MANDATORY PROVISION IS EITHER SUPER SEDED OR IGNORED, IT STRAIGHTWAY AFFECTS THE JURISDICTION. IN THE INSTAN T CASE, WE HAVE TO MENTION THAT IT WAS A CASE OF SUO MOTO REFERENCE TO THE TPO AND IT IS THE CASE OF THE REVENUE AUTHORITIES, TO IMPORT THE PROVISIONS OF CH APTER X. IN THIS CIRCUMSTANCE, SINCE THE ATPO DID NOT ADHERE TO THE PRESCRIBED METHODS CONSCIOUSLY, ANOTHER INNINGS TO RECTIFY THE MISTAKE CANNOT BE ALLOWED, AS THE TPO INFRINGED THE RELEVANT PROVISION OF THE INCOME TAX ACT AND RULES.' IN THE CASE OF HAVELLS INDIA LTD.(140 TTJ283)THE TR IBUNAL HAS DEALT WITH THE ISSUE OF RESTORING THE MATTER TO THE FILE OF THE TPO AND HAS HELD AS UNDER: 29.APROPOS THE LD. DR'S CONTENTION ASKING FOR REMIT TING THE MATTER TO THE ASSESSING OFFICER, IT MUST BE NOTED HERE THAT SUCH A COURSE IS NEITHER REQUIRED, NOR APPROPRIATE TO BE ADOPTED. AS AN APPE LLATE AUTHORITY, THE TRIBUNAL HAS TO SEE WHETHER THE ASSESSMENT FRAMED H AS BEEN FRAMED IN ACCORDANCE WITH LAW AND IF THERE IS SUFFICIENT MATE RIAL TO SUPPORT IT. IF THAT IS SO, IT IS NOT FOR THE TRIBUNAL TO START INVESTIGATI ON SUO MOTO AND TO THEREBY FILL UP THE LACUNAE IF THERE IS MATERIAL TO SUPPORT THE ASSESSMENT, THE ASSESSMENT, AS CONFIRMED OR UPHELD BY THE CIT(A) NE EDS TO BE SUSTAINED BY THE TRIBUNAL IF NOT, THE ASSESSMENT FALLS. IT IS FO R THE DEPARTMENT TO GATHER MATERIAL AND MAKE PROPER ASSESSMENT AND THE TRIBUNA L IS NOT IN THAT MANNER, AN INCOME-TAX AUTHORITY. THE INCOME-TAX ACT DOES NOT ENVISAGE THE ITAT AS AN INCOME-TAX AUTHORITY, RATHER IN THE SCHE ME OF THE ACT, IT IS A PURELY APPELLATE AUTHORITY. THAT BEING SO, AS OBSER VED IN RAJ KUMARJAIN V. ASSTT. CIT [1994] 501TD I (ALL.)(TM), THE OBJECT OF THE APPEAL BEFORE THE TRIBUNAL IS WHETHER THE ADDITION OR DISALLOWANCE SU STAINED WAS IN ACCORDANCE WITH LAW. IF THERE IS SUFFICIENT MATERIA L, THE ADDITION MUST BE UPHELD. IF NOT, THE ADDITION MUST BE DELETED. NO FU RTHER ENQUIRY CAN BE ORDERED BY THE TRIBUNAL WITH A VIEW TO FILL IN THE LACUNAE AND SUSTAIN THE ADDITION/DISALLOWANCE. DOING SO WOULD AMOUNT TO TAK ING SIDES WITH THE PARTIES, WHICH IS NOT THE FUNCTION OF A JUDICIAL AU THORITY LIKE THE TRIBUNAL. IT IS ONLY THAT IF THERE IS ANY ERROR IN THE PROCEEDINGS OR THE PROCEDURE, THE ITA NO.2941/M/2010 & ITA NO.2117/M/2011 M/S. BARCLAYS BANK PLC 14 APPELLATE AUTHORITY COULD CORRECT IT. MAKING FURTHE R INVESTIGATION, HOWEVER, IS NOT APART OF THE PROCEDURE, BUT IS SUBSTANTIVE A ND IS BEYOND THE PURVIEW OF THE TRIBUNAL ' CONSIDERING THE ABOVE DISCUSSION AND THE PECULIAR F ACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE OPINION THAT THE ORDER OF THE F AA DOES NOT SUFFER FROM ANY LEGAL OR FACTUAL INFIRMITY. SO, CONFIRMING THE SAME, WE D ECIDE THE EFFECTIVE GROUND OF APPEAL AGAINST THE AO. 20. WE ALSO NOTE THAT A SIMILAR VIEW HAS BEEN TAKEN BY MUMBAI BENCHES IN ASSESSEES OWN CASE FOR A.Y. 2004-05, 20 07-08, 2008-09 & 2009-10 AND THEREFORE TAKING A CONSISTENT VIEW WITH THE EARLIER YEAR, WE UPHOLD THE ORDER OF LD. CIT(A) WHEREIN THE LD. CIT(A) HAS DELETED THE ADJUSTMENT PERTAINING TO MARKETING OF DERIVATIVE PRODUCTS. ACCORDINGLY, APPEAL OF THE RE VENUE IS DISMISSED. 21. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED AND THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 19.03.2020. SD/- SD/- (CHALLA NAGENDRA PRASAD) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 19.03.2020. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY /ASSTT. REGISTRAR, ITAT, MUMBAI.