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4. We will first dwell upon the issue of adjustment on account of „Royalty‟ Payments in relation to Corn and Sunflower seeds, the facts in brief are that, the assessee in the Financial Year 2002-03 had entered into a „Technical Collaboration Agreement with Syngenta Seeds AG, Switzerland‟ ("SSAG") for the use of proprietary rights, proprietary information, valuable technical know-how and trademarks owned by its AE, SSAG; to produce, promote and commercialize corn and sunflower seeds in the domestic market. In terms of the said agreement, the assessee paid SSAG, royalty @ 5% on local sales and 8% on export sales.

11. We have heard the rival submissions, perused the relevant finding given in the impugned orders as well as material referred to and placed on records. It is an undisputed fact that the assessee‟s AE, Syngenta Seeds AG, Switzerland has been supplying plant material / basic seed to the assessee in terms of „Technical Collaboration Agreement‟. The assessee based on such proprietary rights, proprietary information, valuable technical knowhow and trademarks owned by AE carries out to produce, promote, and commercialize corn and sunflower seeds in the domestic market through its own process and modification to suit to Indian climatic condition. It bears the trademark of the AE in respect of which the royalty is being paid. The benefits derived by the assessee under the agreement and also the use of technology in the form of basic seeds have already been discussed above. The issue of royalty payment has chequered history, that is, similar payment in terms of same technical collaboration agreement has been made to the AE in the earlier years also. In the assessment year 2007-08 this issue has been dealt by the Tribunal after discussing the entire facts in the following manner:-

29. We have heard the rival submissions and perused the relevant finding given in the impugned orders as well as material placed before us. It is an undisputed fact that assessee had entered into technical collaboration agreement with Syngenta AG Switzerland ससिंगएनता इिंडिमा प्राइवेट सरसभटे ि Syngenta India Ltd IT(TP)A 1373/Mum/2014 ITA 1926/Mum/2014 ITA 560/Mum/2015 ITA 147/Mum/2016 for the use of proprietary rights; proprietary information;

valuable technical know-how; trademarks owned by its AE to produce, promote and commercialize corn and sunflower seeds in the domestic market. All these rights, information and trademarks were given as non- exclusive, non-transferable and royalty bearing license. As per agreement, the said license includes the rights to multiply the lines and varieties and produce the basic seed as per the assessee‟s requirement. In the TP Study report, the assessee has highlighted the benefits from such a technical know-how agreement and how it has helped the assessee to develop the capability of seeds that cater to the tropical climate of the region. The significant R&D required for this purpose has not been undertaken by the assessee. If all these technical know- how given by AE have been used including trademark and information for the business carried out by assessee in India, then the payment made for usage and utilization of such rights, information and trademarks has to be reckoned as "royalty" only. Here it is not the case that payment has been made in this year for the first time albeit is a recurring payment from the earlier years and also in the subsequent years and no such adjustment or disallowance has been made in the seeds segment. It has been categorically stated before the authorities below and before us, which has not been rebutted by the revenue that, the payment of royalty in the seed segment had passed the test of functional and economic justification and has been allowed in the earlier years. The assessee is importing basically the breeder seeds and with the aid of technical know-how of its AE and assists in further ससिंगएनता इिंडिमा प्राइवेट सरसभटे ि Syngenta India Ltd IT(TP)A 1373/Mum/2014 ITA 1926/Mum/2014 ITA 560/Mum/2015 ITA 147/Mum/2016 developing seeds at the facilities located in various parts of the country. Thus, to say that there is no benefit to the assessee from such proprietary information, trademarks, technical know-how would not be correct. Even in third party situation, proprietary rights, information and license to use trademarks and know- how is provided or make available then it would not be free of cost. In such transactions there is always a price which needs to be computed under the principles of "Arm‟s Length Price". Thus, we hold that, the contention of the TPO as well as direction of the DRP that royalty payment has to be treated as "Nil" cannot be justified in the wake of not only the "technical collaboration agreement" but also the actual conduct of the parties and the assessee who has earned huge returns during carrying out its activity by exploiting these intangibles.