TaxTMI 
TaxTMI 
2023 (11) TMI 1045
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....he case are, assessee filed its return of income declaring total income at Rs.. NIL on 26.10.2018. The case was selected for scrutiny assessment under CASS and notices u/s. 143(2) and 142(1) of Income-tax Act, 1961 (in short "Act") were issued and served on the assessee electronically. In response to the above notices, Authorised Representative of the assessee attended and submitted the relevant information as called for. 4. Assessee is a foreign company and a tax resident of the Ireland. Assessee is in the business of providing reinsurance services to insurers/ cedants. It is primarily involved in providing reinsurance services for life insurance. The assessee has entered into various reinsurance treaties with Indian Insurance Companies. For underwriting the risk, the assessee receives reinsurance premium, under the reinsurance treaties entered by it with Indian insurance companies. The Assessing Officer observed that assessee has received total premium amount of Rs.. 435,14,07,217/- during the year and assessee has claimed the same as business income of the assessee, and it does not have a Permanent Establishment in India and hence these receipts are not taxable in India. 5. Fu....
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.... Para No.7.6 of the Assessment Order, the Assessing Officer observed that the business of the assessee is to provide reinsurance services to clients / cedants in India. In the course of such business, RGA Services an Indian company, a wholly-owned subsidiary of the assessee, acts as a Permanent Establishment of the assessee in India. In the present situation, RGA Services can be considered as Fixed Place Permanent Establishment of the assessee in India. The assessee has entered into a Reinsurance Support Services Agreement (RSSA) dated 01.04.2006 with RGA Services for obtaining risk assessment services, market intelligence and administrative support in India and in turn, remunerates/compensates RGA Services on a cost plus 12 percent margin basis. This agreement is updated by another Agreement dated 31.08.2010 between the assessee and its group entity RGA Americas Reinsurance Company Ltd., and RGA India. He observed that the type of services provided by RGA Services to its group entities are the same as per the agreement dated 31.08.2010 vis-a-vis agreement dated 01.04.2006. Further, Assessing Officer observed that the various terms of the agreement support the finding that RGA Indi....
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....n of the agreement. 13. Further, he observed that assessee has remunerated RGA Services on cost-plus basis, accordingly, assessee as per agreement, reimburses cost plus a margin of 12%, by observing the above, the Assessing Officer opined that RGA Services is representative and related enterprise performing risk assessment, actuarial and underwriting services, collection of information in the reinsurance field and co-ordination with the cedants for reinsurance business gets substantially performed in India itself and thereafter not much critical functions remain to be performed outside India except for just signing the contract and observed that the final entry into contracts though undertaken de facto by the assessee on paper, in reality, is based on the vital inputs and functions performed by RGA Services in India. 14. Further, he rejected the claim of the assessee that Article 5(7) of DTAA makes the insurance company liable to tax if it collects insurance premiums in India and insures risks of Indian residents or their agents except in the case of reinsurance services, and the claim that the both the Governments intention to exclude reinsurance business from the tax net. He ob....
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.... The learned AO has, on the facts and circumstances of the case in law, and based on the directions of the Hon'ble DRP, erred in concluding that the Appellant has a fixed place permanent establishment (PE) in India as per Article 5(1) of the Double Taxation Avoidance Agreement entered between India and Ireland (India-Ireland Tax Treaty). 3. Ground 3 The learned AO has, on the facts and circumstances of the case in law, and based on the directions of the Hon'ble DRP, erred in concluding that RGA Services acts as a Dependent Agent PE of the Appellant in India as per Article 5(6) of the India-Ireland Tax Treaty. 4. Ground 4 The learned AO has, on the facts and circumstances of the case in law, and based on the directions of the Hon'ble DRP, erred in concluding that the support services performed by RGA Services are not in the nature of preparatory or auxiliary services but are core and crucial business activities in relation to reinsurance business. 5. Ground 5 The learned AO has, on the facts and circumstances of the case and in law, erred in applying the provisions of Multilateral Conventions to implement tax treaty related measures to prevent base ero....
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....ns of the Hon'ble DRP, erred in initiating penalty proceedings under section 270A of the Act." 19. At the time of hearing, Ld. AR of the assessee brought to our notice relevant facts of the case and filed its written submissions, for the sake of clarity it is reproduced below: - "A) Background of RGA International Reinsurance Company Designated Activity Company ('RIRC' or 'the Assessee') and operations undertaken from India perspective For the period from Financial Year 2003 to 31 March 2017 1. RIRC is a company incorporated in Ireland on 23 June 2003 and is a tax resident of Ireland. RIRC is a part of Reinsurance Group of America (RGA) and undertakes reinsurance business with insurers in Europe, United Kingdom and Asia (which includes India). In terms of its India business, RIRC undertakes reinsurance business with Indian life insurance companies (Indian Cedents) from the year 2003. 2. The key function in re-insurance is the acceptance of the risk that an insurance company transfers (cedes) to a re-insurer. The income to the re-insurer accrues in the jurisdiction in which the re- insurer accepts the said risk. In the case before your Honours, the d....
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.... different from the Assessee. 4. Pursuant to set up of RGA Canada - India Branch, the new reinsurance treaties with Indian Cedents were entered into by RGA Canada's India Branch. RIRC did not enter into any new treaties with Indian Cedents post set up of RGA Canada - India Branch with effect from 1 April 2017 (the India Branch, I.e., RGA Canada India Branch actually commenced business from this date). However, all the older reinsurance treaties (ie., treaties entered into by RIRC prior to commencement of business by RGA Canada - India Branch) between RIRC and the Indian Cedents remained with RIRC under which RIRC earns premiums from the Indian Cedents. 5. Further, 45 percent of the premiums earned by RGA Canada India Branch is retroceded to RIRC. B) Background of RGA Services India Private Limited (RGA Services) 6. RGA Services, subsidiary of Reinsurance Group of America, Inc. (United States of America) and thus, a group entity of RIRC, was incorporated in India on 14 June 2006. RGA Services provides support services to RIRC for its transaction with Indian Cedants as well as to RIRC's operations outside India and other entities of the RGA Group. 7. RGA Servic....
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....ncludes keeping track of premiums received with respect to various re-insurance policies, amount of premium received during a particular period etc. * Further, these services also include other ancillary services like human resource support services, data entry accounting services to RIRC. 12. Thus, RGA Services is a back office entity which has only provided support services to RIRC and other group companies. RGA Services has provided services in the form of claims support, claim data synopsis and administration and other ancillary services in connection with RIRC's India business. Further, RGA Services has also not provided any marketing services in respect of RIRC's India Business during the year. RGA Services does not act as an agent and it does not take any independent decision on behalf of RIRC with regard to any claim lodged against RIRC by the Indian Cedents. C) RGA Services does not constitute a Dependant Agent Permanent Establishment (DAPE) of RIRC 13. Your Honor's may note that Article 5(6) of the India-Ireland Tax Treaty provides that a person acting on behalf of an enterprise may be deemed to be a PE in India of such an enterprise if such person....
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....ons are always taken by RIRC from Ireland; and * Employees of RGA Services only provide services to RGA Services in the ordinary course of their employment with RGA Services. RIRC does not have any control or dominion over the functioning of such employees of RGA Services (i.e., the employees of RGA Services do not take direction from RIRC). 16. Thus, as can be evident from the said agreement referred above, RGA Services is not an agent of RIRC nor does it represent itself as the agent of RIRC to any cedent. It is also provided in the agreement that RGA services shall not act on behalf of the RIRC, not conclude contracts on behalf of RIRC, not bind RIRC by any contract or bind RIRC to conclude contracts, not alter or modify any contracts entered in to by RIRC, not make any commitment on behalf of RIRC, not make or give any representation or warranty to any clients of RIRC or hold itself out as having any authority not granted to it by RIRC under this agreement. Further, it is laid down that it is RIRC who will set out the terms and offers for reinsurance and that RIRC is solely responsible for conducting contracts and signing them. RIRC as the risk carrier shall invoice premi....
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.... of foreign enterprise exists in India in the form of the Indian subsidiary. The burden of proof is to be discharged by the Department. We have reproduced the relevant extract of the judgment hereunder for ready reference: "20. So far as the case of the Revenue that there is a dependent PE in India is concerned, herein also, the Revenue has merely brushed aside the claim of the assessee that the Indian subsidiary does not have any authority to secure contracts or solicit business on its behalf in India independent of the assessee. According to the Revenue, the Indian subsidiary uses brand name of the assessee while carrying out its activities in India. In our view, the same cannot be a ground to say that there existed a dependent PE in India. In fact, a point which has been emphasised before us is that the assertions of the Revenue that the Indian subsidiary has a decision making authority is a mere bald assertion and is devoid of any factual support." 21. Reliance is further placed on the following decisions (relevant extracts enclosed separately at Annexure 2 - refer page nos. 23 to 26 of the compilation): * Formula One World Championship Limited v. CIT [2017] 390 ITR 19....
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....tablishment on "source basis". 2. It is respectfully submitted that the earlier decisions have been given on the basis of the 'single taxpayer approach', holding that once an arm's length payment is made to a dependent agent PE, no further profits can be taxed in the hands of foreign enterprise. This 'single taxpayer entity approach' has been rejected in unequivocal terms by the OECD and India's DTAAS. 3. Furthermore, the Hon'ble Supreme Court in the case of DIT (International Taxation) Vis Morgan Stanley & Co. Inc. [2007 292 ITR 416] dt. 09.07.2007, at para 16, has affirmed the principles of 'separate entity approach two point taxation', that is, both the P.E. on its own income earned in India as per I.T. Act and MNE L.e. the foreign principal, in respect of profits attributable to the PE are taxable separately. The concept of two point taxation has been discussed lucidly by the ITAT in case of Set Satellite (Singapore) Pte. Ltd, AY. 1999-2000, in its order dated 24.04.2007. The Tribunal after an elaborate discussion on legal principles involved in Articles 7(1) and 7(2) of the Singapore DTAA and international practices followed, held that....
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.... can never be taxed in India. This will render the concept of agency permanent establishment (Agency PE) redundant. This will also have wider ramifications on similar cases of insurance companies, service industries, etc., with significant revenue effect and will seriously erode the 'source based' principle of taxation advanced by developing countries. 5. Firstly, the 'Dependent Agent', i.e., RGA India, and the 'Dependent Agent Permanent Establishment' i.e. the assessee are two separate entities with regard to their activities in India. The former is taxable in India in accordance with the provisions of Income Tax Act being resident assessee while the later would be taxable in India under Article 7 of DTAA in respect of the profits attributable to the Permanent Establishment of RGA Ireland, read with the provisions of section 9 of the Act. It means that RGA India is taxable separately in respect of incomes earned in India as per the Indian I. T. Act. At the same time the income which it is earning for and on behalf of the foreign non resident company (RGA Ireland), will also be taxable in the hands of the non resident as per the principles laid down in th....
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....ents")." The OECD emphasizes that profits attributable to the deemed PE are separate from the profits attributable to the dependent agent itself. 7. Secondly, the Hon'ble Supreme Court in DIT (International Taxation) V/s Morgan Stanley & Co. Inc. [2007 292 ITR 416] dt. 09.07.2007 has in fact, affirmed the principle of 'two point taxation' and has held that the host country has taxation rights over the dependent agent in respect of its income earned in India and over the foreign entity in respect of theprofits attributable to its permanent establishment in India. This is evident from paragraph no. 16 and concluding paragraph no. 33 of the judgment. These paragraphs, in brief, are as under: 16."........... Therefore, there is a difference between the taxability of the PE in respect of its income earned by it in India which is in accordance with the Income Tax Act, 1961 and which has nothing to do with the taxability of MNE, which is also taxable in India under Article 7, in respect of the profits attributable to its P.E......" As per para 33 under the 'conclusion' the Hon'ble SC has held as under: 33... The Situation would be different if the tr....
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....t at 29% on the operating costs of MSAS. As regards attribution of further profits to the PE of MSCo where the transaction between the two are held to be at arm's length, we hold that the ruling is correct in principle provided that an associated enterprise (that also constitutes a PE} is remunerated on arm's length basis taking into account all the risk- taking functions of the multinational enterprise. In such a case nothing further would be left to attribute to the PE. The situation would be different if the transfer pricing analysis does not adequately reflect the functions performed and the risks assumed by the enterprise. In such a case, there would be need to attribute profits to the PE for those functions/risks that have not been considered. The entire exercise ultimately is to ascertain whether the service charges payable or paid to the service provider (MSAS in this case) fully represents the value of the profit attributable to his service. 9. It is apparent that if paragraph 33 of the decision is read in its entirety, Hon'ble Apex Court held that no profit can be attributed to PE if and only if the associated enterprise (that also constitutes a PE) is r....
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....ervices by a foreign company out-side India would not be taxable in India merely because the equipment was supplied in relation to a turnkey project in India". In essence, the Hon'ble Court in this case also upheld the principal of double point taxation, if the territorial connection with India could be established. 14. Thus, the Hon'ble Supreme Court in no uncertain terms has approved the principle that the income of a foreign company will be taxable in India and further profits can be attributed to it with regards to functions performed, assets used and risks assumed that have not been considered by the transfer pricing analysis. Now, how much profits will be attributable will be a question of pure factual determination. 15. Thus RGA India will be taxed independently for its own income received from the assessee. At the same time it will be taxed as PE of assessee in India for income of assessee attributable to the PE in India. 16. Thus, both the dependent agent (RGA India) and the dependent agent permanent establishment (DAPE, being hypothesized or deemed PE) are separate taxable entities with regard to their activities in India. The former is taxable in India i....
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....prise are subject to detailed instructions or to comprehensive control by it, such person cannot be regarded as independent of the enterprise. Another important criterion will be whether the entrepreneurial risk has to be borne by the person or by the enterprise the person represents...... 106. An independent agent will typically be responsible to his principal for the results of his work but not subject to significant control with respect to the manner in which that work is carried out. He will not be subject to detailed instructions from the principal as to the conduct of the work. The fact that the principal is relying on the special skill and knowledge of the agent is an indication of independence." 17.4 Similar view adopted in the case of E-Funds [2014] 42 taxmann.com 50 (Delhi HC), Reuters Ltd [2015] 63 taxmann.com 115 (Mumbai ITAT) and Net App [2017] 78 taxmann.com 97 (Delhi ITAT). 17.5 From the above discussion, it is clear that RGA India is not an Agent of independent status within the meaning of Article 5(8) of India Ireland DTAA. 17.6 RGA India constitutes DAPE of the assessee in India. Perusal of various clauses of the Reinsurance Services Agreement dated 31....
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....ndia. It is also brought to our notice that assessee did not enter into any new treaty with Indian cedants after setting up of RGAC India branch w.e.f. 01.04.2017. However, all the older reinsurance treaties between assessee and Indian cedants remain with the assessee under which assessee earns premiums from the Indian cedants. 23. The current issue raised by the revenue authorities are that RGA Services (an Indian Entity) which is subsidiary of RGA USA, which was incorporated on 14.06.2006. The RGA Services provides support services to assessee for its transactions with Indian cedants as well as assessee's operations outside India and other entities of the RGA Group. It is submitted that RGA Services does not have a licence from IRDAI to undertake reinsurance business or even to act as reinsurance broker and the services provided are restricted only to support services to assessee's operation in and outside India and services to other group entities operating outside India. 24. We observe from the record that RGA Services provides various services to the assessee and other group concerns which includes claim support, claim data synopsis, administration support and other ancillar....
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....urance. Under a reinsurance arrangement, the reinsurer assumes, of course, for consideration (i.e. reinsurance premium), the risk, as a whole or in part, covered under a policy issued by an insurance company. The fundamental presumption under which the insurance business functions is that only a fraction of the policies issued would result in claims and the premiums collected on all the insurance policies by an insurance company will be far in excess of such claims, and it is this fundamental presumption because of which the total sum insured by an insurance company is often several times the capacity of the insurance company to pay, and even far in excess of the net worth of the insurance companies. Presumptions, no matter how valid and how realistic, are presumptions nevertheless, and there is a possibility that in a bad year, such a presumption will turn out to be incorrect and the total value of insurance claims may be much more than the premium collected, and if the losses are of a very large magnitude, even the net worth of the company would be wiped out. That is the risk that reinsurance contracts cover, but there can also be situations in which the insurance companies take ....
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....Dispute Resolution Panel. It was submitted by the assessee that the assessee does not have any place of business operations in India and that the assessee does not have any premises at its disposal. It was also pointed out that RGA India is a separate legal entity having its own personnel, and the services rendered by RGA India are preparatory and auxiliary in nature, rather than core reinsurance services. It was also pointed out that whatever services are rendered by RGA India to the assessee have been remunerated at an arm's length price as such, and that position has been accepted in the transfer pricing assessment. It was also explained that the services rendered by the RGA India and the assessee company are distinct in nature inasmuch as while the former renders support services, the later provides reinsurance services. As regards the software said to be generating a reinsurance proposal, it was explained by the assessee that the assessee does not own that software, nor is its server even located in India. The assessee also placed its reliance on a number of judicial precedents, including E Funds IT Solutions Inc Vs ADIT [(2017) 86 Taxman 240 (SC)], Formulae One World Champion....
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....act. Accordingly, given that core business activities of reinsurance business of the assessee in connection to Indian region are performed through the premises of RGA Services, RGA Services constitute a Fixed Place PE of the Assessee as per Article 5(1) of the IR Treaty. In view of the above, the objection of assessee is rejected. 6. It is thus the view of the Assessing Officer, which has been approved by the Dispute Resolution Panel, that this subsidiary constitutes a dependent agency permanent establishment (DA-PE) as also fixed place permanent establishment (FP-PE) of the assessee in India. Consequently, in the view of the authorities below, the assessee is liable to be taxed in respect of the business profits, arising out of the reinsurance premium received from the Indian insurance companies, in India. The Assessing Officer has computed 50% of the reinsurance revenue so generated as attributable to the operations in India, and treated its taxability @ 10% of the gross reinsurance revenue. The action so taken by the Assessing Officer has also been confirmed by the DRP, and, accordingly, the Assessing Officer has proceeded to bring the reinsurance revenues to tax in India ....
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.... and of little relevance for the PE definition. According to him, the crucial element is the term 'place'. Importance of the term 'place' is explained by him in the following manner: "In conjunction with the attribute 'fixed', the requirement of a place reflects the strong link between the land and the taxing powers of the State. This territorial link serves as the basis not only for the distributive rules which are tied to the existence of PE but also for a considerable number of other distributive rules and, above all, for the assignment of a person to either Contracting State on the basis of residence (Article 1, read in conjunction with Article 4 OECD and UN MC)." 36. We would also like to extract below the definition to the expression 'place' by Vogel, which is as under: "A place is a certain amount of space within the soil or on the soil. This understanding of place as a three- dimensional zone rather than a single point on the earth can be derived from the French Version ('installation fixe') as well as the term 'establishment'. As a rule, this zone is based on a certain area in, on, or above the surface of the earth. ....
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....ncorporation of a company in a Contracting State in itself constitute a PE of the company in that State. Where a company has its seat, according to its by-laws and/or registration, in State A while the POEM is situated in State B, this company will usually be liable to tax on the basis of its worldwide income in both Contracting States under their respective domestic tax law. Under the A-B treaty, however, the company will be regarded as a resident of State B only (Article 4(3) OECD and UN MC). In the absence of both actual facilities and a dependent agent in State A, income of this company will be taxable only in State B under the 1st sentence of Article 7(1) OECD and UN MC. There is no minimum size of the piece of land. Where the qualifying business activities consist (in full or in part) of human activities by the taxpayer, his employees or representatives, the mere space needed for the physical presence of these individuals is not sufficient (if it were sufficient, Article 5(5) OECD MC and Article 5(5)(a) UN MC and the notion of agent PEs were superfluous). This can be illustrated by the example of a salesman who regularly visits a major customer to take orders, and conducts....
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....etwork. By contrast, in the case of a competing enterprise, the Bench did assume an Indian PE because the employees of that enterprise (unlike Ericsson's) had exercised other businesses of their employer. The OECD view can hardly be reconciled with the two court cases. All three examples do indeed shed some light onto the method how the relative standards for the control threshold should be designed. While the OECD MC Comm. suggests that it is sufficient to require not more than the type and extent of control necessary for the specific business activity which the taxpayer wants to exercise in the source State, the Canadian and Indian decisions advocate for stricter standards for the control threshold. The OECD MC shows a paramount tendency (though no strict rule) that PEs should be treated like subsidiaries (cf. Article 24(3) OECD and UN MC), and that facilities of a subsidiary would rarely been unusable outside the office hours of one of its customers (i.e. a third person), the view of the two courts is still more convincing. Along these lines, a POB will usually exist only where the taxpayer is free to use the POB: * at any time of his own choice; * for work re....
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....voidance agreement comes into play, as admittedly, in this case, the provisions of the Income Tax Act 1961 cannot be pressed into service unless these provisions are more beneficial to the assessee. The DRP has simply observed that since the core business activities are conducted by RGA India, RGA India constitutes the fixed place PE. As we we have seen above, unless a particular place is at the disposal of the assessee, that place cannot be said to constitute the PE of the assessee. In any case, the core reinsurance activity is the assumption of risk, and that assumption of risk has been done outside India. There is thus no occasion to attribute reinsurance profit attribution to RGA India. Whatever activities are carried out by RGA India have been duly paid for by the asseseee, and the transfer pricing assessment has accepted that position. Once that position is accepted, there cannot be any further profit attribution for services rendered by the RGA. In view of these discussions, and bearing in mind the entirety of the case, we disapprove the stand of the authorities below, and hold that there was no fixed place permanent establishment on the facts of this case. As regards the ex....
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.... neutrality theory, we will still have to deal with learned Departmental Representative's plea that as per the law laid down by Hon'ble Supreme Court in the case of DIT v. Morgan Stanley & Co Inc. [2007] 162 Taxman 165 (SC), the arm's length remuneration paid to the PE must take into account 'all the risks of the foreign enterprise as assumed by the PE', but then in an agency PE situation, unlike a service PE situation which was the case before the Hon'ble Supreme Court, a DAPE assumes the entrepreneurship risk in respect of which agent can never be compensated because even as DAPE inherently assumes the entrepreneurship risk, an agent cannot assume that entrepreneurship risk. To this extent, there may clearly be a subtle line of demarcation between the dependent agent and the dependent agency permanent establishment. The tax neutrality theory, on account of existence of DAPE, may not indeed be wholly unqualified- at least on a conceptual note". However, in the present case, successive coordinate benches in assessee's own case for different assessment years have upheld the contentions of the assessee and held that once an arm's length remuneration is....
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....re us is that here is a case of dependent agency permanent establishment, and existence of a DAPE, in the light of these discussions, is wholly tax neutral- particularly in the light of the legal position regarding profit attribution to the DAPE. We need not, therefore, deal with the question about existence of a DAPE, as it is an academic exercise with no tax effect involved. The related grounds of appeal are thus infructuous. 10. In view of these discussions, we hold that the assessee did not have a fixed place permanent establishment in India, that the question of assessee having a dependent agency PE is wholly academic in the sense that, as the law stands now, the existence of the DAPE is wholly tax neutral in India. Accordingly, the business profits earned by the assessee on account of the reinsurance business have no tax implications in India. In view of these findings, all other issues raised in the appeal are academic and call for no adjudication as of now." 6. Since the issue is exactly similar and grounds as well as the facts are also identical, respectfully following the above decision in assessee's own case for the A.Y. 2015-16 we allow the ground raised by the as....
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....dia. The Dependent agent is performing additional functions for and on behalf of the foreign company which are not part of its profile and for which it is not being remunerated by the foreign company. He also raised issue of profits / losses may be attributed to the DAPE by host country based on those assets used, risks assumed and functions performed and the DAPE is entitled to deduction in host country for arm's length compensation / remuneration paid to dependent agent enterprise. 28. Ld. DR submitted that Profits can be attributed to DAPE even if arm's length price has been paid to a Dependent Agent. He objected to assertion that 'once the Indian Dependent Agent is taxed on its own income nothing further would be taxable in the hands of the non-resident foreign company'. He is of the view that the functions performed by the RGA Services are intertwined in the various functions of reinsurance activities which has standalone services offered by the RGA Services which was already compensated. However, as per the OECD commentary on Article 7(2) which requires a total factual analysis on the basis of functions performed, assets used and risk assumed. He submitted that O....
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....ution of such contracts, the issue of dependent or independent is different aspect of analysis. First, the other person is eligible to function as an agent or not as a broker, in the given case RGA Services does not have any recognition in India to conclude any contract in line of reinsurance. Therefore, it can never be allowed to act as an agent in India, not even assume or conclude contract on behalf of the principal i.e., the assessee. 33. Further, we observe that even Ld. DR has not brought on any material to show that RGA Services has utilized its assets or assumed any risk in this line of reinsurance business. Merely because its whole functions are depend on the services which will be utilized by the Foreign principal does not make it as an dependent agent. 34. For example, the claim of the tax authorities is like the directors of the company are agents of the company and all the functions of the directors are conducted on behalf of the company. The question is, whether the directors can claim that the profits generated by the company are mainly depends upon their existence and functions. Therefore, the profit earned by the company should be attributed to the directors also....