DSM Anti - Infectives India Limited, Nawanshahr V. Addl. CIT, Chandigarh

MA 6/CHANDI/2015

• Counselvise Citation: [2015] 124 COUNSELVISE.COM (IT) 2769 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s) 11 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 19-02-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 23-01-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 08-12-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AJAY SHARMA
• Keywords: Transfer pricing

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES A CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R. SOOD, ACCOUNTANT MEMBER M.A. NOS. 06/CHD/2015 (IN ITA NO.1139/CHD/2011) ASSESSMENT YEARS: 2007-08 DSM ANTI-INFECTIVES INDIA LTD., V THE ADDL CIT, RA NGE-1, TOANSA, NAWANSHAHR CHANDIGARH PAN NO. AABCM4314K M.A. NOS. 07/CHD/2015 (IN ITA NO.1290/CHD/2012) ASSESSMENT YEARS: 2008-09 DSM ANTI-SINOCHEMM PHARMACEUTICALS V THE ADDL CIT, RANGE-1, INDIA PRIVATE LIMITED, CHANDIGARH (EARLIER KNOWN AS DSM ANTI-INFECTIVES INIDA LIMITED), TOANSA, NAWASHAHR PAN NO. AABCM4314K (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PAWAN KUMAR AND SHRI K.M. GUP TA RESPONDENT BY : SHRI AJAY SHARMA DATE OF HEARING : 13.02.2015 DATE OF PRONOUNCEMENT : 19.02.2015 ORDER PER T.R.SOOD, A.M. THROUGH THESE MISC. APPLICATIONS THE ASSESSEE HAS S OUGHT RECTIFICATION OF AN ERROR WHICH HAS CREPT INTO THE ORDER OF TRIBUNAL IN ITA NOS. 1139/CHD/2011 AND 1290/CHD/2012. 2. THE LD. COUNSEL FOR THE ASSESSEE REFERRED TO THE APPLICATION AND POINTED OUT THAT WHILE ADJUDICATING THE ISSUE REGARDING ADJ USTMENT MADE BY THE ASSESSING OFFICER/TPO WITH REGARD TO VARIOUS CORPOR ATE SERVICES PROVIDED BY THE HOLDING COMPANY DSM NETHERLANDS (IN SHORT HOLDING COMPANY) PRINCIPAL OF 2 THE ASSESSEE, IT WAS HELD IN PARA 95 THAT NO ADJUST MENT CAN BE MADE AND IN PARA 98 OF THE ORDER, THIS POSITION WAS REITERATED BY MA KING A REFERENCE TO THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT(A) V EKL APPLIANCE (SUPRA). FINALLY, IT WAS HELD IN PARA 102 THAT THE TPO DID NOT HAVE ANY VALID COMPARABLE AND ACTION OF APPLYING THE CUP METHOD WA S POTENTIALLY INCORRECT AND, THEREFORE, FINDING OF THE TPO WERE REVERSED. HOWEVER, LATER ON WHILE NOTING THE ADMISSION OF THE LD. COUNSEL FOR THE ASS ESSEE THAT ONE OF THE SERVICES PROVIDED BY THE HOLDING COMPANY WAS FINANCIAL SERVI CE AND THERE WAS INTERNATIONAL PRACTICE OF PASSING ON ATLEAST 50% OF SUCH BENEFITS TO THE SERVICE PROVIDER, THE TRIBUNAL WRONGLY CONCLUDED THAT ASSES SEE HAD PASSED ON 100% BENEFIT TO THE ASSOCIATE ENTERPRISE AND 50% OF SUCH SUM SHALL BE DISALLOWED VIDE PARA 110 OF THE ORDER. THEREFORE, THE CONCLUSIVE FI NDING OF THE TRIBUNAL IN PARA 110 WERE CONTRARY TO THE EARLIER FINDING IN PARS 95 , 98 AND 102 AND THEREFORE, THERE IS AN ERROR IN THE ORDER OF THE TRIBUNAL. 3. HE FURTHER SUBMITTED THAT ASSESSEE HAS MERELY PA ID THE LUMP SUM CHARGES IN ACCORDANCE WITH PRE-DETERMINED FORMULA OF SERVIC ES PROVIDED BY THE PRINCIPAL OF THE ASSESSEE. THEREFORE, IT WAS NOT FAIR TO CONC LUDE THAT SEPARATE CHARGES SHOULD BE DETERMINED FOR FINANCIAL SERVICES. HE CON TENDED THAT BENEFIT ON ACCOUNT OF FINANCIAL SERVICES WERE RS. 9.29 CROES A ND IF THE TRIBUNAL IS CORRECT IN HOLDING THAT THE ASSESSEE HAS PAID 100%, THEN TH AT WOULD NOT BE CORRECT OBSERVATION BECAUSE IN ASSESSMENT YEAR 2008-09, THE TOTAL ADJUSTMENT MADE BY THE ASSESSEE ON TPO/ASSESSING OFFICER OF SERVICES W AS ONLY RS. 6,14,13,983/-. IF 100% FINANCIAL BENEFIT WAS TRANSFERRED BY THE AS SESSEE THEN THIS BECOMES CONTRADICTORY. IN THIS BACKGROUND IT WAS PRAYED THA T ERROR MAY BE RECTIFIED BY HOLDING THAT NO ADJUSTMENT SHOULD BE MADE ON ACCOUN T OF SERVICES OBTAINED BY THE ASSESSEE FROM THE HOLDING COMPANY. 3 4. ON THE OTHER HAND LD. DR SUBMITTED THAT THERE IS NO ERROR IN THE ORDER OF TRIBUNAL. HE POINTED OUT THAT DURING THE HEARING I T WAS POINTED OUT ON BEHALF OF THE REVENUE THAT THE AMOUNT PAID ON ACCOUNT OF CORP ORATE SERVICES IS CONTINUOUSLY INCREASING OVER THE PERIOD OF TIME AND THE SAME THEREFORE, CANNOT BE RELATED TO ONLY CORPORATE SERVICES. HOWEVER, TH E KIND OF CORPORATE SERVICES WHICH HAS BEEN RECEIVED BY THE ASSESSEE COMPANY COU LD NOT JUSTIFY THE INCREASE IN THE AMOUNTS IN THE LATER YEARS. AT THAT JUNCTUR E, THE BENCH HAD POSED THIS QUERY TO THE LD. COUNSEL FOR THE ASSESSEE AND IN RE SPONSE IT WAS SUBMITTED THAT IN LATER YEARS THE ASSESSEE HAS STARTED RECEIVING F INANCIAL SERVICES IN THE FORM OF BANK GUARANTEES AND SANCTION OF LIMITS AT A VERY CO MPETITIVE INTEREST RATES. IT WAS REITERATED ON BEHALF OF THE ASSESSEE THAT THE A MOUNTS OF CORPORATE SERVICES HAVE INCREASED BECAUSE OF THESE FINANCIAL SERVICES THROUGH WHICH ASSESSEE HAS RECEIVED ENORMOUS BENEFITS. AT THAT STAGE THE BENCH HAD ASKED THE ASSESSEE TO ATLEAST QUANTITY THE BENEFIT RECEIVED ON ACCOUNT OF FINANCIAL SERVICES AND ASSESSEE FURNISHED THOSE FIGURES BEFORE THE BENCH. DURING THE COURSE OF HEARING IT WAS ADMITTED THAT THERE IS AN INTERNATIONAL PRAC TICE THAT WHATEVER BENEFITS ARE RECEIVED ON ACCOUNT OF FINANCIAL SERVICES, AT BEST 50% CAN BE PASSED ON TO THE SERVICE PROVIDER BY THE RECIPEINT COMPANY AND 50% SHOULD BE RETAINED BY THE RECIPEINT COMPANY I.E. ASSESSEE. ON THESE FACTS, T HE BENCH HAD CLEARLY INDICATED DURING THE COURSE OF HEARING THAT NO INFERENCE WOUL D BE MADE IN OVER ALL CORPORATE SERVICE AMOUNT PAID BY THE ASSESSEE SUBJE CT TO THE RIDER THAT THE SAME WOULD BE RESTRICTED IN RESPECT OF FINANCIAL SERVICE S TO THE EXTENT OF 50% AND THIS DECISION IS FINALLY BEEN CLARIFIED BY THE TRIBUNAL IN PARA 110. THEREFORE, NOW THE ASSESSEE CANNOT GO BACK ON ITS OWN ADMISSION NO W IN THE MISC. APPLICATION. WHEN THIS FACT WAS CONFRONTED TO SHRI K.M. GUPTA, L D. COUNSEL FOR THE ASSESSEE WHO WAS PRESENT AT THE TIME OF HEARING OF THE APPEA L IS ALSO PRESENT TODAY ADMITTED THAT ASSESSEE HAD MADE THESE SUBMISSIONS A ND HAD ALSO FURNISHED THE AMOUNTS OF FINANCIAL BENEFITS AS WELL AS AGREED THA T AT BEST ONLY 50% OF THE SUCH 4 FINANCIAL BENEFITS CAN BE SHARED WITH THE HOLDING C OMPANY AND 50% BENEFIT CAN BE RETAINED BY THE ASSESSEE COMPANY. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFUL LY. WE FIND THAT DURING ASSESSMENT YEAR 2007-08 THE ASSESSEE HAS PAID CORPO RATE SERVICE FEE OF RS. 3,30,72,526/- WHICH INCLUDED SOME DIRECT SERVICES A ND SOME SERVICES ON ACCOUNT OF SHARING OF I.T. PLATFORM LIKE SAP ETC. THE NATUR E OF SERVICES WAS EXPLAINED TO BE THE CORPORATE SERVICE CHARGE: THE AE PROVIDES THE CORP ORATE SERVICES IN THE AREA OF PRODUCTION AND SALES, MARKET INFORMATIO N, BUSINESS INTELLIGENCE, SAFETY, HEALTH AND ENVIRONMENT AND FINANCE RELATED STRATEGIC PLANNING SUPPORT TO THE ASSESSEE. FOR WHICH IT CHARGES AS PER THE AL LOCATION OF TOTAL EXPENSE OF DSM CORPORATE AND BUSINESS GROUP UNITS. SOME OF THESE AMOUNTS PARTICULARLY ON ACCOUNT OF I.T. SERVICES WERE HELD TO BE PAYABLE BY THE TPO. HOWEVER, SINCE NO BREAK-UP WAS GIVEN FOR OTHER SERVICES, THEREFORE , THE SAME WAS HELD TO BE OF NO BENEFIT TO THE ASSESSEE AND THE WHOLE OF THE AMO UNTS WAS ADDED BY WAY OF ADJUSTMENT BY THE TPO AND TBHIS ACTION WAS CHALLENG ED BEFORE THE TRIBUNAL. WHEN IT WAS POINTED OUT BY THE REVENUE THAT IN LATE R YEARS, THE AMOUNT PAID ON ACCOUNT OF CORPORATE SERVICES IS INCREASING FROM YE AR TO YEAR SUBSTANTIALLY THEN A QUERY WAS RAISED TO DETERMINE THE REASON FOR SUCH A BIG JUMP IN THE CORPORATE SERVICE CHARGES. AT THIS STAGE, THE LD. COUNSEL HAS POINTED OUT THAT THE MAIN REASON FOR SUBSTANTIAL INCREASE IN THE AMOUNT OF CO RPORATE SERVICES AMOUNT PAID WAS ON ACCOUNT OF FINANCIAL SERVICES. THE ASSESSEE HAS STARTED RECEIVING FINANCIAL SERVICES IN THE FORM OF CORPORATE GUARANT EE AS WELL AS SANCTIONS OF THE LIMIT BY BANKS ON THE RECOMMENDATION OF HOLDING COM PANY BECAUSE OF WHICH THE ASSESSEE GOT THE LIMITS SANCTIONED FROM THE BANK AT MUCH LOWER RATES THAN THE MARKET RATES. AT THE INSTANCE OF BENCH THE LD. COUN SEL HAS ALSO QUANTIFIED THE AMOUNTS OF BENEFITS RECEIVED BY THE ASSESSEE COMPAN Y DURING THESE TWO YEARS. THE AMOUNTS OF CORPORATE SERVICE CHARGES IN VARIOUS ASSESSMENT YEARS ARE AS UNDER:- 5 ASSESSMENT YEAR AMOUNT (IN RS. ) 2007-08 22,700,000 2008-09 63,970,136 2009-10 79,931,741 2010-11 89,829,606 6. FROM THE ABOVE FIGURES THE BENCH AGREED WITH THE CONTENTION OF THE REVENUE THAT SERVICE CHARGES PAID ON ACCOUNT OF COR PORATE SERVICES HAD INCREASED MANIFOLD IN THE LATER YEARS. THEREFORE, ASSESSEE WAS ASKED WHY THERE IS SUCH A HUGE INCREASE IN THE TOTAL CORPORATE SERV ICE CHARGES. THE ASSESSEE IN REPLY HAD EXPLAINED THAT IN LATER YEARS THE ASSESSE E HAD STARTED RECEIVING FINANCIAL SERVICES ALSO AND BECAUSE OF WHICH THE TO TAL CORPORATE SERVICE CHARGES HAD INCREASED. IN THIS REGARD DETAILED WRITTEN SUB MISSIONS WERE FILED WHICH ARE PLACED ON RECORD. WE WOULD LIKE TO GIVE THE FOLLOW ING EXTRACTS FROM SUCH WRITTEN SUBMISSIONS:- IT IS RESPECTFULLY SUBMITTED THAT UNDER THE CORPOR ATE SERVICES ENTERED INTO BY THE APPELLANT, THE ASSOCIATED ENTERPRISE IN TER ALIA PROVIDES GUARANTEE TO BANKS FOR THE BENEFIT OF THE APPELLANT . IT IS SUBMITTED THE GUARANTEE ISSUED BY THE ASSOCIATED ENTERPRISE ENABL ED THE APPELLANT TO OBTAIN BORROWINGS AT CHEAPER RATE OF INTEREST AND L ED TO SIGNIFICANT SAVINGS OF FINANCE COST OF THE APPELLANT. DURING FINANCIAL YEAR 2006-07 AND 2007-08 THE APPEL LANT HAD AVAILED TERM LOAN FROM DEUTSCHE BANK AMOUNTING TO INR 52.63 CRORES. SUCH LOAN WAS GRANTED BY DEUTSCHE BANK BASED UPON A RISK ASSU MPTION AGREEMENT ENTERED INTO BY THE ASSOCIATED ENTERPRISE WITH DEUT SCHE BANK, AMSTERDAM. IN THIS REGARD THE FOLLOWING DOCUMENTS ARE ATTACHED FOR CONSIDERATION BY THE HONBLE TRIBUNAL: (I) LOAN AGREEMENT ENTERED INTO BY THE APPELLANT WITH D EUTSCHE BANK (ANNEXURE 1) (II) LETTER ISSUED BY DEUTSCHE BANK, AMSTERDAM TO THE AS SOCIATED ENTERPRISE CONFIRMING ASSUMPTION OF RISK ON BEHALF OF THE APPELLANT (ANNEXURE 2) (III) DEED OF PLEDGE OF DEPOSIT ENTERED INTO BY THE ASSOC IATED ENTERPRISE WITH DEUTSCHE BANK, AMSTERDAM PLEDGING A N AMOUNT OF EUR 10 MILLION AS GUARANTEE AGAINST PROVIDING LO AN TO THE APPELLANT (ANNEXURE 3) 6 AS PER THE BENCHMARKING ANALYSIS CONDUCTED BY THE A PPELLANT, THE ARMS LENGTH PRICE OF THE GUARANTEE ISSUED BY THE ASSOCIA TED ENTERPRISE IN SUPPORT OF THE APPELLANT IS 2.65% FOR FINANCIAL YEA R 2006-07 AND 4.65% FOR FINANCIAL YEAR 2007-08 WHICH TRANSLATES INTO BE NEFIT OF RS. 39 CRORE AND 2.45 CRORE RESPECTIVELY. THE DETAILED BENCHMARKING REPORT ALONG WITH CREDIT RATING ANALYSIS IS PROVIDED AS ANNEXURE4. IT IS RESPECTFULLY SUBMITTED THAT AS PER THE ANALYSIS CONDUCTED BY THE APPELLANT, THE CREDIT RAT ING WAS CALCULATED IN A SCIENTIFIC MANNER AND THE SAME WAS DETERMINED AT B2 . CONSIDERING THE CREDIT RATING OF THE APPELLANT, IT WOULD BE APPRECI ATED THAT WITHOUT THE SUPPORT OF GUARANTEE FORM IT ASSOCIATED ENTERPRISE, THE APPELLANT COULD HAVE BORROWED MONEY AT A SIGNIFICANT PREMIUM TO THE PRIME LENDING RATE (PLR) PREVAILING DURING THE RELEVANT FINANCIAL YEAR . HOWEVER, ON A CONSERVATIVE BASIS, THE INTEREST SAVI NGS AVAILED BY THE APPELLANT, DUE TO GUARANTEE PROVIDED BY THE ASSOCIA TED ENTERPRISE HAS BEEN COMPUTED ON THE BASIS OF PREVAILING PLR. THE P LR PREVAILING DURING FINANCIAL YEAR 2006-07 WAS 10.75% WHEREAS THE PLR D URING FINANCIAL YEAR 2007-08 WAS THE RELEVANT PERIOD WAS 12.75% WHE REAS THE APPELLANT HAD BORROWED MONEY AT 8.10%. CONSIDERING THE ABOVE FACTORS, THE INTEREST COST SAVINGS ENJOYED BY THE APPELLANT DUE TO GUARAN TEE PROVIDED BY THE ASSOCIATED ENTERPRISE FOR FINANCIAL YEAR 2006-07 AN D 2007-08 IS AS UNDER: FINANCIAL YEAR AMOUNT OF LOAN (INR IN CR) INTEREST RATE PLR SAVINGS % SAVINGS (INRE IN CR) 2006-07 52.63 8.10% 10.75% 2.65% 1.39 2007-08 52.63 8.10% 12.75% 4.65% 2.45 FURTHER, THE ASSOCIATED ENTERPRISE HAS ALSO PROVIDE D GUARANTEE TO ENABLE THE APPELLANT TO AVAIL LETTER OF CREDIT (LC) FACI LITY FROM ROYAL BANK OF SCOTLAND (RBS) WITHOUT PROVIDING ANY SECURITY. DURING FINANCIAL YEAR 2007-08 THE APPELLANT AVAILED LETTER OF CREDIT (LC) FACILITY FROM ROYAL BANK OF SCOTLAND (RBS) . THE SAID FACILITY WAS ISSUED BY THE BANK ON THE BASIS OF A CORPORATE GUAR ANTEE AMOUNTING TO EUR30 MILLION ISSUED BY THE ASSOCIATED ENTERPRISE. AS PER GENERAL BANKING NORMS, FOR OBTAINING A LC FA CILITY, A FIXED DEPOSIT IS REQUIRED TO BE PLEDGED BY THE CUSTOMER AS A SECU RITY AGAINST THE FACILITY ALLOWED BY THE BANK. HOWEVER, IN THE CASE OF APPELL ANT, SINCE THE GUARANTEE WAS PROVIDED BY THE ASSOCIATED ENTERPRISE , THE FACILITY WAS ALLOWED BY THE BANK WITHOUT OBTAINING ANY SECURITY FROM THE APPELLANT. IT IS RESPECTFULLY SUBMITTED THAT IN THE ABSENCE OF GU ARANTEE PROVIDED BY THE ASSOCIATED ENTERPRISES, THE APPELLANT WOULD HAVE BO RROWED MONEY TO OBTAIN A FIXED DEPOSIT FOR PLEDGING THE SAME WITH T HE BANK FOR AVAILING THE LC FACILITY. IN VIEW OF THE AFORESAID, IT IS RESPECTFULLY SUBMIT TED THAT THE APPELLANT ENJOYED SIGNIFICANT SAVINGS INTEREST COST DUE TO TH E GUARANTEE PROVIDED BY THE ASSOCIATED ENTERPRISE AGAINST THE LC FACILITY A VAILED BY THE APPELLANT. THE DETAILED ECONOMIC ANALYSIS UNDERTAKEN BY THE AP PELLANT FOR BENCHMARKING THE GUARANTEE PROVIDED BY THE ASSOCIAT ED ENTERPRISE IS PROVIDED AS ANNEXURE 4. THE RESULTS OF THE ANALYSIS ARE SUMMARIZED AS UNDER: 7 PARTICULARS AMOUNT (INR) AMOUNT OF FACILITY (EUR 30,000,000 @ RS. 57 (A) 1,710,000,000 PRIME LENDING RATE OF SBI(B) 12.75% INTEREST PAYABLE BY DSM INDIA (C= A*B) 218,025,000 INTEREST RATE AVAILABLE ON FD (1 TO 3 YEARS ) (D) 8.75% INTEREST RECEIVABLE BY DSM INDIA (E= A*D) 149,625,000 INTEREST SAVINGS BY THE APPELLANT (F= C-E) 68,400,000 GUARANTEE FEE (F/A%) 4% FROM THE ABOVE ANALYSIS, IT CAN THUS BE CONCLUDED T HAT A GUARANTEE FEE CHARGED BY DSM NETHERLANDS TO DSM INDIA AT 4% FOR T HE OVERALL ARRANGEMENT, SHALL BE CONSIDERED TO BE AT ARMS LEN GTH AS REQUIRED UNDER INDIAN REGULATIONS. IN VIEW OF THE AFORESAID, IT IS RESPECTFULLY SUBMIT TED THAT THE ABOVE DOCUMENTS NOW PLACED ON RECORD BY THE APPELLANT PUR SUANT TO THE QUERY RAISED BY THE HONBLE TRIBUNAL MAY KINDLY BE TAKEN INTO CONSIDERATION WHILE ADJUDICATING THE APPEAL OF THE ASSESSEE. B. ISSUE OF GUARANTEE BY DSM FINANCE B.V. THE LD DR CONTENDED THAT THE APPELLANT HAS ENTERED INTO CONTRACT SERVICE AGREEMENT WITH DSM N.V. WHEREAS THE GUARANTEE WAS B EEN ISSUED BY ANOTHER ASSOCIATED ENTERPRISE, DSM FINANCE B.V. IN THIS REGARD IT IS RESPECTFULLY SUBMITTED THAT DS M FINANCE B.V. IS A PART OF CORPORATE TREASURY DIVISION OF THE DSM GROUP AND HAS A MANDATE FROM DSM N.V. (NOW ROYAL DSM NV OR KONINKLIJKE DSM N.V) TO MANAGE/ARRANGE/SUPPORT THE FUNDING OF DSM GROUP COM PANIES. A POWER OF ATTORNEY EXECUTED BY DSM NV AUTHORIZING DSM FINANCE BV TO SIGN ANY OBLIGATION / ARRANGEMENT IN THE FIELD OF CASH MANAG EMENT IS ATTACHED AS ANNEXURE 5. IT IS FURTHER SUBMITTED THAT THE NAME O F DSM NV WAS CHANGED TO ROYAL DSM NV ON COMPLETION OF 100 YEARS OF ITS E XISTENCE IN 2004. AN EXTRACT FROM THE CHAMBER OF COMMERCE FOR LIMBURG, N ETHERLAND IS ATTACHED AS ANNEXURE 6. IN VIEW OF THE AFORESAID, IT IS RESPECTFULLY SUBMIT TED THAT THE GUARANTEE WAS ISSUED BY DSM FINANCE B.V. AT THE DIRECTIONS/IN STRUCTION OF DSM N.V. AND ACCORDINGLY, AN ARMS LENGTH GUARANTEE FEE WAS PAYABLE BY THE APPELLANT TO DSM N.V. IN CONSIDERATION FOR ISSUANCE OF SUCH GUARANTEE. 7. FROM THE ABOVE IT BECOME CLEAR THAT ASSESSEE HAD STARTED RECEIVING SO ME FINANCIAL SERVICES ALSO FROM THE HOLDING COMPANY WH ICH EXPLAINED THE INCREASE IN TOTAL PAYMENTS ON ACCOUNT OF CORPORATE SERVICES. THE ASSESSEE HAD TRIED TO JUSTIFY THE PAYMENT ON ACCOUNT OF SUCH FINANCIAL SE RVICES BUT WHEN AGAIN IT WAS CONFRONTED THAT IF ASSESSEE HAD SAVED RS. 100/- AND IF HE PAYS THE ENTIRE AMOUNT 8 OF RS. 100/- TO THE HOLDING COMPANY AND IN THAT CAS E THERE WOULD BE NO SAVINGS TO THE ASSESSEE. IN RESPONSE TO THIS QUERY, THE LD. COUNSEL ON BEHALF OF THE ASSESSEE HAD ADMITTED THAT THERE IS INTERNATIONAL P RACTICE TO PASS ON 50% OF THE AMOUNT OF SUCH FINANCIAL SAVINGS ON ACCOUNT OF FINA NCIAL SERVICES AND BALANCE 50% WAS TO BE RETAINED BY THE RECIPIENTS OF THE SER VICES. THIS WAS FOUND TO BE LOGICAL BECAUSE BENEFIT WAS BEING SHARED ON 50 50 BASIS. THEREFORE, ASSESSEE WAS ASKED TO GIVE AMOUNT OF TOTAL BENEFIT ON ACCOUN T OF FINANCIAL SERVICES. THE DETAILS OF SUCH BENEFIT AS ADMITTED BY THE LD. COUN SEL FOR THE ASSESSEE AT THE TIME OF ORIGINAL HEARING WAS STATED TO BE AS UNDER: - ASSESSMENT YEAR AMOUNT OF BENEFIT OR SERVICES OBTAINED BY THE ASSESSEE. 2007-08 RS. 1.40 CRORES 2008-09 RS. 9.29 CRORES 8. ON THE BASIS OF ABOVE ADMISSION THE BENCH HELD T HAT FEE PAID FOR OTHER CORPORATE SERVICES COULD NOT HAVE INCREASED SO MUCH AND THEREFORE, IT WAS FAIR AND JUST THAT THAT NORMAL FEE PAID FOR CORPORATE SE RVICES SHOULD NOT BE DISALLOWED BUT IN VIEW OF THE INCREASE IN THE AMOUN T THE BENEFITS OBTAINED BY THE ASSESSEE ON ACCOUNT OF FINANCIAL SERVICES HAVE TO BE SHARED ON THE BASIS OF 50-50. THIS POSITON HAS BEEN CLEARLY INDICATED IN PARA 110 OF THE ORDER OF TRIBUNAL. 9. IN VIEW OF THIS DISCUSSION WE FIND NO ERROR IN T HE ORDER OF TRIBUNAL AND THEREFORE, NO RECTIFICATION CAN BE MADE. 10. IN THE RESULT, MISC. APPLICATION IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 19.02.2015. SD/- SD/- (BHAVNESH SAINI) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 19 TH FEBRUARY,2015 RKK COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR 9