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3. Without prejudice to ground 2 above, the learned AO and CIT(A) have also erred in facts and circumstances of the case in making addition of Rs.4,075,156/- based on the Form 3CEB of Cargill Global Trading India Pvt. Ltd. ('CGTIPL') instead of Rs.34,00,066/- being actual reimbursement received from CGTIPL under the Agreement by ignoring the submissions made in this regard.

4. Without prejudice to the above that the cost reimbursement made by the Indian entities to the appellant under the Agreement is not taxable under the Act as well as Treaty, the learned AO & CIT(A) have erred in facts and in law in holding that the services provided under the agreement are covered under the definition of 'FTS' under Article 12(4)(b) of the Treaty even though the appellant has not made available any technical knowledge, experience, skill, know-how or ITA No.1437 & 1438/Del/2012 & 5444/Del./2010 processes, which enables the person acquiring the service is the services to apply the technology contained therein. 4.1 The learned AO and CIT(A) have also erred in not considering the Memorandum of Understanding ('MOU') to Article 12 of the Treaty between India and USA, wherein the terms 'make available' technical knowledge, experience, skill know-how are processes, have been explained, while treating the cost reimbursements/ recharges as FTS under article 12(4)(b) of the Treaty between India and Singapore.

5. Before us, the learned Counsel of the assessee for assessment year 2005-06, has filed a paper book containing pages 1 to 144 containing a copy of the agreement relied upon by the assessee for claiming cost sharing between the assessee and the companies in respect of the various services rendered by the ITA No.1437 & 1438/Del/2012 & 5444/Del./2010 assessee. For assessment year 2006-07, the learnedCounsel filed a paper containing pages 1-150 containing a copy of old service agreement as well as new service agreement dated 01/06/2005. 5.1 In Assessment year 2005-06, the ground No. 1 to 2.1 and 2.3 to 3.1 are related to treating the payment received by the assessee for services rendered as Fee for Technical Services (FTS). Similarly, in assessment year 2006-07, the grounds No. 1 to 4.1 of the appeal relates to the same issue of treating the payment received by the assessee for services rendered as Fee for technical services (FTS).

ITA No.1437 & 1438/Del/2012 & 5444/Del./2010 10.1 On perusal of the above article, it is evident that tax rate of the 10% is applicable when the FTS are ancillary and subsidiary to the enjoyment of the property for which royalties are received.

But in the instant case no such royalties have been received and thus the FTS is taxable at the rate of the 15% of the gross amount of FTS. In view of the above, we do not find any infirmity in the order of the Assessing Officer, and we accordingly uphold the same. The ground of the appeal of the assessee is accordingly dismissed.

- The appellant has raised debit notes for all the payments made on behalf of the BO which has later reimbursed the amount so paid by the Appellant to the third parties."

15.7 After considering the submission of the assessee, the Ld. CIT(A) in assessment year 2009-10 and 2010-11 deleted the addition of observing as under:

"7.1 I have duly considered submissions of the appellant. The relevant facts are that the appellant has entered into a service agreement with its group entities under which it is providing certain services on cost plus 6% mark up basis and consideration received its being offered to tax as FTS on gross basis under Article 12 of Indo-Singapore DTAA. The appellant made certain payments to auditor namely KPMG who conducted audit of Singapore branch of Cargtill India Pvt. Ltd. ('CIPL') and subsequently Singapore branch of CIPL reimbursed the appellant on cost to cost basis. The case of theAO is that the appellant has incurred the expenses in connection with services being rendered by it under the service agreemtn and therefore, payment received from Singapore branch of CIPL is also in nature of FTS. The arguments of the appellant is that Singapore branch of CIPL received services from a third party and not from the appellant and the appellant made payments to auditor for and on behalf of Singapore branch of CIPL. The appellant also argued that ITA No.1437 & 1438/Del/2012 & 5444/Del./2010 payment does not amount to FTS u/s 9(1)(vii)(b) of the Act and Article 12(4)(b) of DTAA.