Cargil India Pvt. Ltd., New Delhi V. DCIT, New Delhi

ITA 3060/DEL/2015

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 9925 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-05-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2008-2009
• Appeal Filed On: 15-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY I BARA
• Keywords: Depreciation; Transfer pricing; Opportunity of being heard; International transaction; Rule of consistency; Scheme of amalgamation; Commercial expediency; Revised return; Set aside
• Section: 92C; 13; 32

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH I-1 : NEW DELHI) BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.3060/DEL./2015 (ASSESSMENT YEAR : 2008-09) M/S. CARGILL INDIA PRIVATE LTD., VS. DCIT, CIRCLE 5 (2), 111, RECTANGLE I, SAKET DISTRICT CENTRE, NEW DELHI . SAKET, NEW DELHI 110 017. (PAN : AAACC3269J) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI NAGESHWAR RAO, ADVOCATE SHRI S. CHAKARBORTY, ADVOCATE REVENUE BY : SHRI SANJAY I BARA, CIT DR DATE OF HEARING : 03.02.2020 DATE OF ORDER : 18.05.2020 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : APPELLANT, M/S. CARGILL INDIA PRIVATE LTD. (HEREIN AFTER REFERRED TO AS THE TAXPAYER) BY FILING THE PRESEN T APPEAL SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 19.02.2015 PASSE D BY THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-44, NEW DELHI IN AN APPEAL CHALLENGING THE ORDERS PASSED BY THE LD. TPO /AO QUA THE ASSESSMENT YEAR 2008-09 ON THE GROUNDS INTER ALIA T HAT :- ITA NO.3060/DEL./2015 2 BASED ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE APPELLANT RESPECTFULLY SUBMITS: GROUNDS RELATING TO CORPORATE TAX ADDITIONS 1. THAT ON THE FACTS AND CIRCUMSTANCE OF THE CASE A ND IN LAW, THE LD. CIT (A) ERRED IN NOT ALLOWING A LEGAL CLAIM OF DEPRECIATION ON GOODWILL WHICH IS IN CLEAR VIOLATIO N OF THE POWERS VESTED UNDER SECTION 251(1)(C) OF THE ACT AND SETTL ED JUDICIAL PRECEDENTS. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN NOT ALLOWING LEGAL CLAIM OF DEPRECIATION ON GOODWILL UNDER SECTION 32 OF THE AC T. 3. EVEN OTHERWISE, ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) ERRED IN NOT APPRE CIATING THAT APPELLANT WAS ENTITLED TO CLAIM DEPRECIATION ON GOO DWILL WHICH IS AN 'INTANGIBLE ASSET' UNDER SECTION 32 OF THE ACT. GROUNDS RELATING TO TRANSFER PRICING ADDITIONS 4. THAT ON FACTS AND IN LAW, THE LEARNED CIT (A) H AS ERRED IN CONFIRMING THAT THE LEARNED TPO HAS DISCHARGED H IS STATUTORY ONUS BY ESTABLISHING THAT THE CONDITIONS SPECIFIED IN CLAUSE (A) TO (D) OF SECTION 92C (3) OF THE ACT HAVE BEEN SATISFI ED BEFORE DISREGARDING THE ARM'S LENGTH PRICE DETERMINED BY T HE APPELLANT AND PROCEEDING TO DETERMINE THE ARM'S LENGTH PRICE HIMSELF. 5. THE LEARNED CIT (A) HAS GROSSLY ERRED IN CONTEN DING THAT NO PROPER EVIDENCE WAS SUBMITTED BY THE APPELLANT T O PROVE THAT CERTAIN INTRA GROUP SERVICES WERE ACTUALLY AVAILED BY THE APPELLANT, UNDERMINING THE REASONABLENESS OF THE EV IDENCE SUBMITTED BY THE APPELLANT. 6. THE LEARNED CIT (A) BY UPHOLDING THE ADDITION MA DE BY THE LD. ASSESSING OFFICER/TRANSFER PRICING OFFICER, HAS GROSSLY ERRED IN QUESTIONING THE NEED FOR AVAILING CERTAIN INTRA GROUP SERVICES FROM ITS ASSOCIATED ENTERPRISES (AES). THE LEARNED CIT (A) HAS EXCEEDED HIS JURISDICTIONAL REACH BY CHALLE NGING THE COMMERCIAL EXPEDIENCY AND BUSINESS DECISIONS OF THE APPELLANT AND BY EXPECTING THE APPELLANT TO DEMONSTRATE ANY TANGIBLE/QUANTITATIVE BENEFIT FROM THE RECEIPT OF S UCH SERVICES. 7. THE LEARNED CIT(A) HAS FAILED TO TAKE COGNIZANCE OF THE FACT THAT CERTAIN INTRA GROUP SERVICES A AILED BY I T FROM ITS ASSOCIATED ENTERPRISES HAVE BENEFITTED THE APPELLAN T IN THE SMOOTH AND EFFICIENT FUNCTIONING OF ITS VARIOUS BUS INESSES IN ITA NO.3060/DEL./2015 3 INDIA AND ERRONEOUSLY CONCLUDED THAT ONLY INCIDENTA L BENEFITS WERE RECEIVED BY THE APPELLANT FROM AVAILING SUCH S ERVICES. 8. THE LEARNED CIT(A) HAS GROSSLY ERRED BY CONCLUDI NG THAT CERTAIN INTRA GROUP SERVICES RECEIVED BY THE APPELL ANT FROM ITS AE WERE 'DUPLICATE' IN NATURE. 9. THE LEARNED CIT(A) HAS GROSSLY ERRED BY NOT GIVI NG DUE COGNIZANCE TO THE FACT THAT THE APPELLANT COULD NOT HAVE AVAILED CERTAIN INTRA GROUP SERVICES FROM UNRELATED PARTIES WHICH WERE A CASE OF BUSINESS NECESSITY AND REQUIREMENT FOR THE APPELLANT AND THE ASSOCIATED ENTERPRISES HAVE NOT PROVIDED SUCH S ERVICES IN THE CAPACITY OF HOLDING COMPANY/GROUP COMPANY. 10. THE LEARNED CIT(A) HAS FAILED TO UNDERSTAND THA T EVEN IN PRIOR YEARS, WHEN FACTS OF THESE IMPUGNED TRANSACTI ONS REMAINED SAME AS IN A Y 2008-09, THE APPELLANT HAS AVAILED S IMILAR SERVICES FROM ITS GROUP COMPANIES AND THE TRANSACTI ON PRICES OF THE APPELLANT WERE CONSIDERED BY THE LEARNED AOITPO AT ARM'S LENGTH IN THOSE YEARS. FURTHER, THE SAME WAS NOT EV EN QUESTIONED AT THE TIME OF ASSESSMENT PROCEEDINGS OF THE ASSOCI ATED ENTERPRISES. 11. WITHOUT PREJUDICE TO THE ABOVE GROUNDS, THE LEA RNED CIT (A) HAS FAILED TO PROVE THAT THE ARM'S LENGTH PRICE OF CERTAIN INTRA GROUP SERVICES AVAILED WOULD DEPEND ON THE BE NEFIT DERIVED BY THE APPELLANT. 12. WITHOUT PREJUDICE TO THE ABOVE GROUNDS, THE LE ARNED CIT(A) HAS GROSSLY ERRED BY ASSUMING THE ARM'S LENG TH PRICE FOR CERTAIN INTRA GROUP SERVICES TO BE 'NIL' WHILE APPLYING THE COMPARABLE UNCONTROLLED PRICE ('CUP') METHOD TO BEN CHMARK THE IMPUGNED TRANSACTIONS. THE LEARNED CIT (A) HAS NOT MADE ANY EFFORTS TO IDENTIFY COMPARABLE UNCONTROLLED TRA NSACTIONS, IN THE ABSENCE OF WHICH, THE CUP METHOD CANNOT BE APPL IED ABOVE GROUNDS ARE INDEPENDENT AND WITHOUT PREJUDICE TO EA CH OTHER. 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE CONTROVERSY AT HAND ARE : M/S. CARGILL INDIA PRIVATE LTD., THE TAXPAYER, INCORPORATED ON APRIL 12, 1996 IS INTO TRADING OF A GRICULTURAL COMMODITIES AND PROCESSED FOODS, SUCH AS, WHEAT, CO RN, SOYAMEAL, ETC. AND PROCESSING AND SALE OF REFINED OIL. THE TAXPAY ER HAS ALSO SET UP AN OVERSEAS TRADING BRANCH (OTB) IN SINGAPORE IN 1998 AFTER OBTAINING ITA NO.3060/DEL./2015 4 THE PRIOR APPROVAL FROM THE RESERVE BANK OF INDIA ( RBI). THE TAXPAYER IS PART OF THE CARGILL GROUP WHICH IS AN INTERNATIO NAL MARKETER, PROCESSOR AND DISTRIBUTOR OF AGRICULTURAL, FOOD, INDUSTRIAL A ND FINANCIAL PRODUCTS. THE TAXPAYER PROVIDES DISTINCTIVE CUSTOMER SOLUTION S IN SUPPLY CHAIN MANAGEMENT, FOOD APPLICATIONS AND HEALTH & NUTRITIO N. 3. THE TAXPAYER IN ITS TRANSFER PRICING STUDY CLASS IFIED ITS INTERNATIONAL TRANSACTIONS INTO 3 CATEGORIES VIZ. ( I) PHYSICAL TRADE WHICH INCLUDED PURCHASE OF OIL AND WHEAT AND SALE OF SUGA R, SOYAMEAL, CORN AND COTTON; (II) MERCHANTING TRADE; AND (III) OTHER TRANSACTIONS. THE TAXPAYER IN ORDER TO BENCHMARK ITS INTERNATIONAL TR ANSACTIONS QUA PHYSICAL PURCHASE AND SALE OF COMMODITIES LIKE SUGA R, WHEAT, SOYAMEAL AND OIL USING COMPARABLE UNCONTROLLED PRICE (CUP) A S THE MOST APPROPRIATE METHOD (MAM) TO BENCHMARK ITS INTERNATI ONAL TRANSACTIONS QUA MERCHANTING TRADE USING TRANSACTIONAL NET MARGI N METHOD (TNMM) AS THE MAM WHEREAS BENCHMARKED THE INTERNATI ONAL TRANSACTIONS USING TNMM / CUP AND COMPUTED THE INTE RNATIONAL TRANSACTIONS AS UNDER :- TYPE OF INTERNATIONAL TRANSACTION METHOD SELECTED TOTAL VALUE (RS.) MERCHANTING TRADE (PURCHASE) TNMM USING OPERATING PROFIT AS A PLI VALUE ADDED COST 4166424840+ 435503723+ 4117362140+ 617722320+ 822323079+ 447254878 MERCHANTING TRADE (SALES) 8725208443+ 1441488626+ 447483729 EXPORT OF COTTON CUP 264904879 EXPORT OF SUGAR CUP 322734818 EXPORT OF CORN CUP 1344700066 EXPORT OF SOYA MEALS (INCLUDING SALES BY OTB) CUP 724024834+4405508880 EXPORT OF RAPESEED MEAL CUP 2058169 IMPORT OF OIL CUP 3821959048+2153664960+ 882905773+ 160575764 IMPORT OF WHEAT CUP 322106833 ITA NO.3060/DEL./2015 5 IMPORT OF INGREDIENTS (FOR FISH/SHRIMP FEED) CUP 6221057 IMPORT OF RAW MATERIAL (FOR FLAVOURS AND EMULSIFIERS) TNMM USING OPERATING PROFIT AS A PLI OPERATING REVENUE 11505203 EXPORT OF FISHMEAL CUP 7291677 RECEIPT OF AGENCY FEE TNMM USING OPERATING PROFIT AS A PLI OPERATING COST 61229077+ 23326139+ 34876448+ 6424923 DISCOUNTING CHARGES CUP 137826682 PREPAYMENT DISCOUNT CHARGES CUP 88690478 AVAILING OF TREASURY SERVICES TNMM USING OPERATING PROFIT AS A PLI OPERATING COST 4047708+ 698421 AVAILING OF ADMINISTRATIVE SERVICES TNMM USING OPERATING PROFIT AS A PLI OPERATING COST 91770637 INTEREST PAID TO AES CUP 1178897+ 9885893+ 157476 PAYMENT OF ROYALTY CUP 3818910+ 48950 RECEIPT OF CARRYING COST CHARGES (COTTON BU) CUP 3977358+ 48950 GAIN ON CANCELLATION OF PURCHASE/SALE CONTRACTS CUP 360328617 LOSS ON CANCELLATION PURCHASE/SALE CONTRACTS CUP 58990193 + 269224 PROVISION OF BUSINESS SUPPORT SERVICES TNMM USING OPERATING PROFIT AS A PLI OPERATING COST 2038228+3516738+ 4201533+2587274 PURCHASE OF FIXED ASSETS CUP 193450 PROVISION OF LIAISON SUPPORT SERVICES (COMMISSION AGENCY SERVICES TO CISA) CUP 15771999 PROVISION OF MARKETING SUPPORT SERVICES TNMM USING OPERATING PROFIT AS A PLI OPERATING COST 3227820 PROVISION OF SUPPORT SERVICES TNMM USING OPERATING PROFIT AS A PLI OPERATING COST 5834832 AVAILING OF BROKERAGES/ COMMISSION AGENCY SERVICES CUP 835992 RECEIPT OF INTEREST CUP 7795 RECEIPT OF HANDLING INCOME NO BENCHMARKING REQUIRED 7634604 COST SHARING/ RECHARGE BY AES NO BENCHMARKING REQUIRED 7721643+21206453+ 1560534+6660786+219111+31336 PROVISION OF OTHER TNMM USING 1431869+3516738 ITA NO.3060/DEL./2015 6 SUPPORT SERVICES OPERATING PROFIT AS A PLI OPERATING COST WRITE BACK TO EXCESS PROVISION NO BENCHMARKING REQUIRED 208794 DEMURRAGE EXPENSES NO BENCHMARKING REQUIRED 20204479+2066934+159814 DISPATCH INCOME NO BENCHMARKING REQUIRED 8068541+213171 PAYMENT OF LAB ANALYSIS FEE NO BENCHMARKING REQUIRED 132353 STOCK OPTION COST ADJUSTMENT NO BENCHMARKING REQUIRED 105 REIMBURSEMENT PAID TO AES NO BENCHMARKING REQUIRED 404559+60585+433717+100790+ 240179+8929+34122+125207+ 1271518+180895+47369 REIMBURSEMENT RECEIVED FROM AES NO BENCHMARKING REQUIRED 111722 4. LD. TPO NOTICED THAT THE TAXPAYER HAS MADE PAYME NT FOR CERTAIN INTRA GROUP SERVICES (IGS), ISSUED QUESTIONNAIRE TO THE TAXPAYER SEEKING INFORMATION/EVIDENCE IN ORDER TO DETERMINE THE ARM S LENGTH PRICE BY EXAMINING IF THE SERVICES WERE REALLY NEEDED BY THE TAXPAYER AND ALSO INVOKED THE PRINCIPLE OF BENEFIT TEST. AFTER EXA MINING THE REPLY FILED BY THE TAXPAYER, LD. TPO REACHED THE CONCLUSION THA T NO INDEPENDENT PARTY WOULD HAVE MADE SUCH LARGE PAYMENTS IN UNCONT ROLLED CIRCUMSTANCES AND, THEREFORE, BY APPLYING CUP METHO D DETERMINED THE ALP FOR INTERNATIONAL TRANSACTIONS QUA AVAILING OF TREASURY SERVICES, AVAILING OF ADMINISTRATIVE SERVICES AND COST RECHAR GE, TRANSACTIONS AS NIL AS AGAINST RS.13,65,07,645/- DETERMINED BY THE TAXP AYER. LD. TPO PROPOSED THE ENHANCEMENT OF THE INCOME OF THE TAXPA YER AT RS.13,65,07,645/-. AO REJECTED THE CLAIM OF THE TA XPAYER FOR ITA NO.3060/DEL./2015 7 DEPRECIATION ON GOODWILL ON THE GROUND THAT GOODWIL L IN THIS CASE DOES NOT FORM INTANGIBLE ASSET ELIGIBLE FOR DEPRECIATION . AO THEREBY ASSESSED THE INCOME OF THE ASSESSEE AT LOSS OF RS.138,03,92, 588/- . 5. THE TAXPAYER CARRIED THE MATTER BEFORE THE LD. CIT (A) BY WAY OF FILING AN APPEAL WHO HAS PARTLY ALLOWED THE SAME. FEELING AGGRIEVED, THE TAXPAYER HAS COME UP BEFORE THE TRIB UNAL BY WAY OF FILING THE PRESENT APPEAL. 6. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. TRANSFER PRICING GROUNDS 7. LD. AR FOR THE TAXPAYER CONTENDED THAT TRANSFER PRICING STUDY PREPARED FOR BENCHMARKING THE INTERNATIONAL TRANSAC TION AS TO PAYMENT TOWARDS INTRA GROUP SERVICES HAVE BEEN UNJU STLY AND WRONGLY REJECTED BY THE TPO BY APPLYING CUP AS THE MAM WITHOUT ANY REASON; WITHOUT INDICATING ANY BASIS FO R SELECTION OF MAM; WITHOUT REFERENCE TO ANY UNCONTROLLED TRANSACT IONS RATHER LAID EMPHASIS ON THE FACT THAT SERVICES RECEIVED IN QUESTION ARE DUPLICATIVE IN NATURE, TANGIBLE BENEFIT ACCRUING TO THE TAXPAYER HAS NOT BEEN ESTABLISHED AND THAT THERE IS NO NEED FOR PROCURING SUCH SERVICES, THUS ARBITRARILY FIXED ALP OF ADMINISTRAT IVE SERVICES AND ITA NO.3060/DEL./2015 8 COST REIMBURSED AT 30% OF THE VALUE AND 70% OF THE SAME HAS BEEN DIRECTED TO BE ADJUSTED. 8. HOWEVER, ON THE OTHER HAND, LD. DR FOR THE REVEN UE SUPPORTED THE ORDERS PASSED BY THE AO/TPO/CIT(A) AN D CONTENDED THAT THE ASSESSEE IS TO SATISFY THE TPO THAT SERVIC ES HAVE BEEN RENDERED. 9. UNDISPUTEDLY, DURING THE COURSE OF FIRST APPELLA TE PROCEEDINGS, THE TAXPAYER HAS FILED ADDITIONAL EVID ENCE QUA INTRA GROUP SERVICES RECEIVED FROM ITS AES QUA WHICH REMA ND REPORT WAS CALLED. IN THE REMAND REPORT, LD. TPO DIVIDED THE SERVICES RECEIVED BY THE TAXPAYER AS UNDER ;- S.NO. SERVICES 1 ADMINISTRATIVE SERVICES 2 CORPORATE IT & OTHER SERVICE 3 TREASURY SERVICES 4 ADMIN & TECH TRAINING 5 BROKERAGE SERVICES 6 OTHER SERVICES 7 SOFTWARE SHARING 10. A REMAND REPORT ITSELF SHOWS THAT PLETHORA OF E VIDENCE HAS BEEN BROUGHT ON RECORD BY THE TAXPAYER TO PROVE THE RECEIPT OF THE INTRA GROUP SERVICES RECEIVED FROM THE AE BUT TPO, WITHOUT MAKING ANY COGENT COMMENT ON THE EVIDENCES, DISMISS ED THE SAME BY MENTIONING THAT THERE IS NO CLEARLY DEFINED EVID ENCE IN RESPECT OF THESE EVIDENCES. ITA NO.3060/DEL./2015 9 11. LD. CIT (A) UPHELD THE VIEW TAKEN BY THE AO THA T THE SERVICES ARE PARTLY IN THE NATURE OF DUPLICATIVE OF SERVICES, INCIDENTAL SERVICES AND PARTLY IN THE NATURE OF SHA REHOLDER SERVICES. LD. CIT (A) ALSO HELD THAT FROM THE ADDITIONAL EVID ENCE, IT IS MADE OUT THAT THERE IS NO PROPER EVIDENCE TO PROVE THAT THESE SERVICES WERE ACTUALLY RENDERED, IN OTHER WORDS, THE SERVICE S WERE ACTUALLY RECEIVED BY THE TAXPAYER AND THEREBY UPHELD THE DET ERMINATION OF ALP BY THE TPO QUA ADMINISTRATIVE SERVICES FOR THE VALUE OF RS.91,17,70,637/-. 12. FOR TREASURY SERVICES, LD. TPO HAS AGAIN OBSERV ED THAT NO DOCUMENTATION REGARDING THE SERVICES RECEIVED FROM THE AE HAS BEEN BROUGHT ON RECORD. LD. CIT (A) ON THE BASIS O F REMAND REPORT AND DOCUMENTS BROUGHT ON RECORD BY THE TAXPAYER HEL D THAT, THERE IS NO PROPER EVIDENCE TO PROVE THAT THESE SERVICES WERE ACTUALLY RENDERED BY ITS AE. THE TAXPAYER COULD NOT DEMONST RATE THAT SERVICES WERE ACTUALLY RECEIVED BY IT FROM ITS AE A ND ACCORDINGLY UPHELD THE ORDER OF TPO DETERMINING TREASURY SERVIC ES OF RS.47,46,129/- AT NIL . 13. SO FAR AS ADMINISTRATIVE AND TECHNICAL TRAINING SERVICES ARE CONCERNED, THE TAXPAYER CLAIMED TO HAVE RECEIVED TH ESE SERVICES FROM CTSFA TO THE TUNE OF RS.77,21,643/-. LD. TPO AGAIN DETERMINED ITS ALP AT NIL ON THE GROUND THAT NO DOC UMENTATION HAS ITA NO.3060/DEL./2015 10 BEEN FILED BY THE TAXPAYER IN RESPECT OF SERVICES A VAILED AND THE TAXPAYER HAS FAILED TO PROVIDE ANY BASIS FOR MAKING THIS PAYMENT. LD. CIT (A) AGAIN UPHELD THE FINDINGS OF THE TPO BY OBSERVING THAT THE TAXPAYER HAS ENGAGED LEGAL PROFESSIONALS F OR ADMINISTRATIVE AND TECHNICAL TRAINING SERVICES BY INCURRING HUGE E XPENSES, SO THESE SERVICES ARE IN THE NATURE OF DUPLICATIVE OF SERVIC ES/INCIDENTAL SERVICES/SHAREHOLDER SERVICES. 14. LD. CIT (A) ALSO OBSERVED THAT NO PROPER EVIDEN CE TO PROVE THAT THESE SERVICES ARE ACTUALLY RENDERED BY ITS AE . FOR BROKERAGE SERVICES, THE TAXPAYER ALSO ENTERED INTO AGREEMENT WITH CARGILL TARIM VE GIDA SAYANI TICARET AS (CARGILL, TURKEY) F OR AVAILING BROKERAGE/COMMISSION AGENCY SERVICES IN THE NATURE OF MARKETING / SALES SUPPORT SERVICES. LD. TPO DETERMINED ITS VALU E AT NIL ON THE GROUND THAT THE TAXPAYER HAS NOT RECEIVED ANY SERVI CE FROM CARGILL, TURKEY. LD. CIT (A) ALSO UPHELD THE FINDINGS OF TH E TPO AND PROCEEDED TO HOLD THAT BROKERAGE SERVICES ARE IN TH E NATURE OF DUPLICATIVE OF SERVICES / INCIDENTAL SERVICES AND N OT SUPPORTED BY PROPER EVIDENCE. 15. IN CASE OF OTHER SERVICES, THE TAXPAYER WAS A LSO CHARGED FOR ONE-OFF SERVICES PROVIDED BY CARGILL BV, CARGILL BA -CARGILL PLC CARGILL SRL AND CARGILL AGRI PURINA INC. FOR RS.86, 40,242/-. LD. TPO DETERMINED THE ALP OF OTHER SERVICES AT NIL BY OBSERVING THAT ITA NO.3060/DEL./2015 11 FROM THE DETAILS OF EVIDENCE SUBMITTED BY THE TAXPA YER, MOST OF IT IS IRRELEVANT SINCE IT CONSISTS OF INVOICES AND SIMPLY FILING OF INVOICES CANNOT BE CONSIDERED SERVICES RENDERED. LD. CIT (A ) ALSO UPHELD THE FINDINGS RETURNED BY THE TPO BY HOLDING THAT OT HER SERVICES ARE IN THE NATURE OF DUPLICATIVE/INCIDENTAL SERVICES AN D ARE NOT SUPPORTED BY PROPER EVIDENCE. 16. IN CASE OF SOFTWARE SHARING SERVICES OF THE VAL UE OF RS.15,60,534/-, LD. TPO AGAIN DETERMINED THE ALP OF THE SERVICES AT NIL ON THE GROUND THAT THE TAXPAYER HAS FAILED T O BRING ON RECORD ANY BASIS TO CLAIM THAT IT IS SHARING THE TRADING T ERMINALS AND IT HAS NOT SHOWN WHAT KIND OF PROJECT WORK HAS BEEN UNDERT AKEN AND EVEN HR SERVICES THAT IT REFERS TO. LD. CIT (A) AGAIN U PHELD THE FINDINGS OF THE LD. TPO BY HOLDING THAT THESE SERVICES IN TH E NATURE OF DUPLICATIVE/ INCIDENTAL/ SHAREHOLDER SERVICES. LD. CIT (A) ACCORDINGLY DETERMINED THE INTRA GROUP SERVICES AT RS.2,27,84,103/- AS AGAINST NIL COMPUTED BY THE TPO. 17. WE ARE OF THE CONSIDERED VIEW THAT WHEN WE EXAM INE THE ORDER PASSED BY THE LD. TPO AS WELL AS LD. CIT (A), THEY HAVE DETERMINED THE ALP OF INTRA GROUP SERVICES VIZ. ADM INISTRATIVE SERVICES, CORPORATE IT & OTHER SERVICES, TREASURY S ERVICES, ADMINISTRATIVE AND TECHNICAL TRAINING SERVICES, BRO KERAGE SERVICES, OTHER SERVICES AND SOFTWARE SHARING SERVICES AT NIL BY USING THE ITA NO.3060/DEL./2015 12 SAME TERMINOLOGY WITHOUT DISCUSSING THE PLETHORA OF EVIDENCES BROUGHT ON RECORD BY THE TAXPAYER INTER ALIA THAT T HE TAXPAYER HAS NOT FILED ANY EVIDENCE AS TO HOW IT HAS BEEN BENEFI TED FROM THE RECEIPT OF THESE SERVICES; THAT THE TAXPAYER HAS EN GAGED LOCAL PROFESSIONALS FOR ADMINISTRATIVE SERVICES AND INCUR RED HUGE EXPENSES OF THESE ACCOUNTS; THAT THERE IS NO PROPER EVIDENCE TO PROVE THAT THESE SERVICES WERE ACTUALLY RENDERED; T HAT MOST OF THE EVIDENCES FILED BY THE TAXPAYER CONSIST OF INVOICES WHICH IS NOT SUFFICIENT TO PROVE THAT THE SERVICES WERE ACTUALLY RENDERED; THAT LD. CIT (A) UPHELD THE FINDINGS RETURNED BY THE LD. TPO BY MERELY OBSERVING THAT THE SERVICES CLAIMED TO HAVE BEEN RE CEIVED BY THE TAXPAYER ARE IN THE NATURE OF DUPLICATION OF SERVIC ES, INCIDENTAL OF SERVICES AND SHAREHOLDER SERVICES. 18. IT IS SETTLED PRINCIPLE OF LAW AS HAS BEEN HELD BY HONBLE HIGH COURT OF DELHI IN CASE OF CIT VS. EKL APPLIANC ES LTD. 345 ITR 241 THAT THERE IS NO NEED TO ESTABLISH NECESSITY AND B ENEFIT ESPECIALLY IN PROCEEDINGS BEFORE THE TPO. IN CASE OF CUSHMAN WAKEFIELD 46 TAXMANN.COM 317, SIMILAR VIEW HAS BEEN EXPRESSED BY HONBLE DELHI HIGH COURT. 19. LD. TPO/AO/CIT (A) HAVE ALSO PROCEEDED TO APPLY CUP AS MAM WITHOUT ANY BASIS AND WITHOUT HAVING REFERENCE TO ANY UNCONTROLLED TRANSACTION RATHER RELYING UPON IRRELE VANT ASPECTS EG. ITA NO.3060/DEL./2015 13 SERVICES RECEIVED IN QUESTIONS ARE DUPLICATE IN NAT URE OR TANGIBLE BENEFITS ACCRUED TO THE TAXPAYER HAS NOT BEEN ESTAB LISHED OR THAT THERE WAS NO NEED FOR PROCURING SUCH SERVICES. 20. SO, IN THESE CIRCUMSTANCES, WE ARE OF THE CONSI DERED VIEW THAT THE MATTER IS REQUIRED TO BE REMANDED BACK TO THE TPO TO DECIDE AFRESH AFTER EXAMINING THE EVIDENCE/ADDITION AL EVIDENCE BROUGHT ON RECORD BY THE TAXPAYER WITHOUT HARPING O N THE IRRELEVANT ASPECT THAT SERVICES RECEIVED IN QUESTION BEING DUP LICATIVE IN NATURE OR TANGIBLE BENEFIT ACCRUED TO THE TAXPAYER HAS NOT BEEN ESTABLISHED AND THAT THERE IS NO NEED FOR PROCURING SUCH SERVIC ES IN THE LIGHT OF THE DECISIONS RENDERED BY HONBLE DELHI HIGH COURT IN CASE OF EKL APPLIANCES LTD. AND CUSHMAN WAKEFIELD (SUPRA) AFTER PROVIDING AN OPPORTUNITY OF BEING HEARD TO THE TAXP AYER. ISSUE AS TO DEPRECIATION IN RELATION TO GOODWILL 21. UNDISPUTEDLY, ON ACCOUNT OF AMALGAMATION OF COM PANY WITH TAXPAYER COMPANY W.E.F. 01.04.2007 AS PER SCHEME OF AMALGAMATION APPROVED BY THE HONBLE DELHI HIGH COU RT, THE SAME HAS BEEN RESULTED INTO GOODWILL WHICH WAS RECO RDED IN THE BOOKS OF ACCOUNT. IT IS ALSO NOT IN DISPUTE THAT D EPRECIATION CLAIMED UNDER INCOME-TAX ACT, 1961 WAS CLAIMED ONLY DURING THE ASSESSMENT PROCEEDINGS BY WAY OF FILING REVISED RET URN OF INCOME. ITA NO.3060/DEL./2015 14 HOWEVER, AO/CIT (A) HAVE REJECTED CLAIM OF THE TAXP AYER OF GROUND OF GOODWILL. IT IS CONTENDED BY THE LD. AR FOR THE TAXPAYER THAT IN AYS 2009-10 AND 2010-11, REVENUE ITSELF HAS ALLOWED THE DEPRECIATION ON GOODWILL. WE ARE OF THE CONSIDERED VIEW THAT EVEN IF THE REVISED RETURN IS FILED QUA LEGITIMATE CLAIM BY THE TAXPAYER, AO IS REQUIRED TO BE DIRECTED TO CONSIDER THE SAME BY FOLLOWING THE RULE OF CONSISTENCY. SO, THIS ISSUE IS REMITTED TO THE AO TO DECIDE AFRESH ON THE BASIS OF REVISED RETURN IN ACCORDANCE WITH THE LAW AFTER PROVIDING AN OPPORTUNITY OF BEING HEARD TO TH E TAXPAYER. 22. RESULTANTLY, THE APPEAL FILED BY THE TAXPAYER I S ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THIS 18 TH DAY OF MAY, 2020. SD/- SD/- (R.K. PANDA) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 18 TH DAY OF MAY, 2020. TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A). 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.