UCB INDIAP.LTD,MUMBAI vs. ITO 7(3)(3), MUMBAI

सुनवाई क" तार"ख / Date of Hearing :26.02.2016 घोषणा क" तार"ख /Date of Pronouncement :18.05.2016 / O R D E R/ PER C.N. PRASAD, JM: These bunch of appeals are filed by the assessee and the Revenue against the orders of the Ld. CIT(A)-15 for the Assessment Years 2004-05, 2005-06 and 2007-08. As these appeals were heard together, they are disposed of by this common order for the sake of convenience. -A.Y. 2004-05 – Assessee’s appeal

2. The first ground of appeal in assessee’s appeal is that the Ld. CIT(A) erred in upholding the disallowance of sales promotion expenses incurred by the assessee to the tune of Rs. 10,42,837/- by considering the same as not having been incurred for the appellant’s business.

“We now discuss the other grounds of appeal. A common disallowance is made for the Assessment Years 2002-03 and 2003-04 which pertains to a disallowance of a percentage out of the total sales promotion expenses claimed by the assessee. During the assessment year 202-03 the assessee claimed a sum of Rs. 3,93,15,069 as expenses in connection with sales promotion activity. Out of this, an amount of Rs. 4,48,975 pertained to purchase of various gift items for doctors. For the Assessment Year 2003-04 the figure were Rs. 4,43,19,884/- being expenses connected with sales promotion activities and amount of Rs. 1,04,71,947/- being sales promotional expenses pertaining to purchase of various gift items for doctors. The assessing officer described the expenses as that which is incurred towards purchase of various gift items such as, ball pens towels and tissue foils, household appliances and watches. On a query the assessee explained that the company distributed its product through various medical representative, who got in touch with large number of doctors, etc. for marking and distributing the company products. It was submitted that the gift items are distributed through these medical representatives and the sales promotion expenses incurred were for the purpose of business to promote sales and has to be allowed. The undisputed fact was that all the gift articles bore the logo of the company and were useful for branch regulating. Samples of these gift articles were produced before the assessing officer. The assessing officer directed the assessee to submit details of recipients of gift articles. On the ground that non business obligation of the same cannot be rules out 20% of Rs.44,48,975/- was disallowed for the assessment year 2002-03 and20% of Rs. 1,04,71,947/- was disallowed for the assessment year 2006-07 by the AO . Aggrieved the assessee carried the matter in appeal without success. Further aggrieved the assessee is before us. After considering rival submissions we observe that there is no dispute as to the allowability of this expenditure as business expenditure. Only the quantum is being restricted on adhoc basis. In one year an adhoc 20% disallowance is made and in the other year an adhoc 10% of the disallowance is made. The primary reason for making such disallowance is that the assessee has not furnished details of recipients of the gift articles. The assessing officer presumes that there might be an element of non-business use. The assessee explains that it distributes its product through various medical representatives who inter......... got in touch with a very large number of doctors., etc. who are contacted for improving the marketing and distribution of the assessee’s products. He states that the total list of doctors, who received the gifts are extremely voluminous and hence cannot be attached. A list of representatives was furnished to the CIT(A). He also submits that the CIT(A) was wrong in stating that there is no procedure or system in place to monitor, control, supervise, guide or even to veto the distribution of samples. The assessee submits that it is an internal procedure of approval and a copy of the same is attached as Annexure-II. Thus, submissions of the assessee on facts are not controverted by the revenue. There is an internal control procedure in place. On this factual matrix we are of the considered opinion that the adhoc disallowance is not based on firm legal ground. There is no dispute that the expenditure incurred on gifts was for the purpose of business. The gifts display the logo of the assessee company. To assume that 20% or 10% of these gifts might have not been used for the purpose of business, in our considered opinion is based on mere surmises and presumptions. It is well settled that no addition can be made merely on the basis of such presumptions and assumptions. Thus, the adhoc disallowance is hereby deleted for both the assessments.”

We have considered rival contentions and found that receiving of gifts by doctors was prohibited by MCI guidelines, giving of the same by manufacturer is not prohibited under any law for the time being in force. Giving small gifts bearing company logo to doctors does not tantamount to giving gifts to doctors but it is regarded as advertising expenses. As regards sponsoring doctors for conferences and extending hospitality, pharmaceuticals companies have been sponsoring practicing doctors to attend prestigious conferences so that they gather contemporary knowledge about management of certain illness/disease and learn about newer therapies. We found that the disallowance was made by the AO by relying on the CBDT Circular dated 01.08.2012 onwards. However, the Circular was not applicable because it was introduced w.e.f.01.08.2012 i.e. assessment year 2013-2014, whereas the relevant assessment year under consideration is 2010-2011 and 2011-2012. Accordingly, we do not find any merit in the disallowance so made by the AO in both the assessment years under consideration Respectfully following the decision of the Co-ordinate Bench in assessee’s own case, we delete the adhoc disallowance made by the Assessing Officer in respect of gifts articles. Ground No. 1 is allowed.

The consistent line of reasoning which emerges from the decision of several High Courts adverted to earlier is that the mere fact that an assessee carries on business would not result in an inference that the income which is earned by way of interest would fall for classification as business income. Where an assessee invests its surplus funds in order to earn interest and to obviate its funds lying idle, such income would not fall for classification as business income. This is particularly so in a situation where the business of the assessee does not consist in the investment of funds. Where the assessee engages in an independent line of business, interest earned on deposits cannot be regarded as falling under the head of profits and gains of business or profession. Such income would fall for classification as income from other sources. In applying the provisions of Sec. 80HHC(1), the Legislature has made a specific provision for the deduction of such profits of business as are derived from the export activity. The expression “derived from has been construed to require a direct and proximate nexus with the business of export. Absent such a nexus, the income which results from the activity would have to be excluded from reckoning for the purposes of the formula prescribed by Sec. 80HHC”.

14.1. With reference to the Insurance amount of Rs. 3,53,385/-, the Ld. Counsel for the assessee submits that insurance claim against various operating losses/breakages at the factory and distribution stages. These are the salvaged value of operational losses and relate to the business operations of the assessee. Drawing our attention to the decision in the case of Pfizer Ltd (330 ITR 62), it was held that insurance claim form part of profits of the business and therefore cannot be excluded while computing business profits for the purpose of Sec. 80HHC of the Act.

14.2. With reference to miscellaneous income, the Ld. Counsel for the assessee submits that this amount represents sale of scrap generated from wastage or breakage of bottles, foils, packing materials & newspaper etc. Placing reliance on the decision of Mumbai Bench in the case of Sandoz Pvt. Ltd., Vs ACIT in of 2004 dated 9.11.2012 and the decision of Ahmedabad Bench in the case of Arvind Fashions Ltd. Vs ACIT (37 SOT 369) the Ld. Counsel for the assessee submits that 90% of such amount should not be reduced from business income while computing deduction u/s. 80HHC.

14.3. Coming to the service charges of Rs. 3,21,836/- he submits that in connection with the reimbursement of the shared cost charged by the assessee to its group company UCB Malaysia and this was related to employee salary and office administrative charges provided by the assessee as cost of these services. The assessee has charged UCB Malaysia 5% of the reimbursement cost as service charge or administrative charge which has been accounted under the head “Other Miscellaneous Income”. The Ld. Counsel for the assessee placed reliance on the decision of Mumbai Bench in the case of Rishabh Instruments Pvt. Ltd in dated 16th June 2009 and the decision of the Hon’ble Madras High Court in the case of T.T.G. Industries (209 Taxman 0014).

14.4. Coming to Cenvat credit, the Ld. Counsel for the assessee submits that assessee follows inclusive method of accounting in respect of accounting of excise duty. While excise duty paid on raw materials purchased is added to purchase cost of raw material, the amount of excise duty availed as cenvat credit is credited to the profit and loss account under the head ‘other income’. The Ld. Counsel for the assessee submits that cenvat credit amount has been credited to profit and loss account instead of showing raw material cost net of credit. Referring to various decisions, the Ld. Counsel for the assessee submits that in all these decisions, it has been held that cenvat credit does not par take to character of income since the credit given is the amount paid by the assessee under the moralities provided by the revenue. The Ld. Counsel for the assessee submits that even assuming the refund does not amount to income in the hands of the assessee. It is a profit or gain directly derived by the assessee from its industrial activities. Therefore, the Ld. Counsel for the assessee submits that 90% of such amount should not be reduced from business income while computing deduction u/s. 80HHC of the Act.

14.5. Coming to extraordinary income, the Ld. Counsel for the assessee submits that this amount pertains to the excess of assets over liabilities pertaining to resins and additives business of Solutia Chemicals India Pvt. Ltd., which was acquired by the assessee on a going concern basis from 1.6.2003. The Ld. Counsel for the assessee submits that this amount is the cost differential of asset over liability. The Ld. Counsel for the assessee submits that this amount is not income at all but should go capital reserve therefore not be considered as income at all.

We have heard the rival contention and carefully perused the relevant material on record. Undisputedly, the Modvat credit earned by the assessee during the earlier years could not be availed and set off because of the huge difference of excise duty rates on purchase of raw material and sale of goods. Upto 31st March, 2005, the excise duty on raw material was 16% which the assessee used to pay whereas the excise duty on manufactured goods collected by the assessee was 8%. Therefore, it was not possible to recover the full excise duty paid on purchases from the excise duty collected on the finished goods. Vide Finance Act, 2006, the Government has amended the rates of excise duty and consequently, the excise duty on purchases of raw material by the assessee was reduced from 16% to 8%. Thus, only after the amendment vide the Finance Act 2006, the assessee was able not only to recover the full excise duty payable but also set off the Modvat credit earned in the earlier years.

5.1 It is not the case of the refund of excise duty in cash; but only a benefit of Modvat credit was available to the assessee, which could be set off and utilised against the collection of the excise duty on sale of goods w.e.f Assessment Year 2006-07. Therefore, this amount has been rightly taken into account as income for the year under consideration. Even otherwise, the Assessing Officer has not treated this amount as the income of the earlier years but denied the deduction on the ground that this is not the income derived from the industrial undertaking.

6 In view of the above discussion, we do not find any merit or substance in the contention of the ld DR. 6.1 On the issue whether this benefit of Modvat credit is the income derived from the industrial undertaking or not, the Hon’ble Guwahati High Court in the case of Meghalaya Steels Ltd. (supra), has held as under:

“In so far as the second question is concerned, the Central excise duty refund claimed by the assessee is on the basis of an exemption notifications issued by the Ministry of Finance (Department of Revenue) being Notification No. 32 of 1999 and Notification No. 33 of 1999 both dated July 8, 1999. In terms of these notifications, a manufacturer is required to first pay the Central excise duty and thereafter claimed a refund on fulfilment of certain conditions. In the next month, after verification of the claim, the Central excise duty so deposited is refunded to the assessee if the conditions laid down in the notifications are fulfilled. In the present case, there is no dispute that the assessee was entitled to the Central excise duty refund.

The Central Board of Excise and Customs in its circular dated December 19, 2002 clarified that the refund is not on account of excess payment of excise duty but is basically designed to give effect to the exemption and to operationalise the exemption given by the notifications. In that sense, the Central excise duty refund does not appear to bear the character of income since what is refunded to the assessee is the amount paid under the modalities provided by the Department of Revenue for giving effect to the exemption notifications. There is also nothing to suggest that the assessee has recovered or passed on the excise duty element to its customers.

Even assuming the refund does amount to income in the hands of the assessee, it is a profit or gain directly derived by the assessee from its industrial activity. The payment of Central excise duty has a direct nexus with the manufacturing activity and similarly, the refund of the Central excise duty also has a direct nexus with the manufacturing activity. The issue of payment of Central excise duty would not arise in the absence of any industrial activity. There is, therefore, an inextricable link between the manufacturing activity, the payment of Central excise duty and its refund. In the circumstances, we are of the opinion that question No. 2 must be answered in the affirmative in favour of the assessee and against the Revenue.”

6.2 The Hon’ble High Court has decided the issue in favour of the assessee after considering the decision of the Hon’ble Supreme Court in the case of Liberty India vs CIT reported in 317 ITR 218. Accordingly, following the decision of the Hon’ble Gawahati High Court in the case of Meghalaya Steels Ltd (supra), we decide this issue against the revenue and in favour of the assessee”.

Respectfully following the said decision, we hold that the cenvat credit is derived from the industrial undertaking therefore cannot be treated as other income and cannot be reduced 90% of such income while computing deduction u/s. 80HHC.

16.1. Coming to extraordinary income, it is the submission of the Ld. Counsel for the assessee that this amount is not income at all but should go to capital reserve as this income represents only excess income over liabilities in the process of acquiring the business by the assessee. In the circumstances, we are of the view that this aspect has to be looked into by the Assessing Officer for the reason that if this amount is not income at all, the question of reducing 90% will not arise. Thus, we restore the matter to the file of the Assessing Officer for fresh adjudication.

17.1. The Assessing Officer while computing the assessment disallowed e-connectivity charges of Rs. 20,04,718/- paid by the assessee to its parent company UCB SA by treating such expenses as capital expenditure. The Assessing Officer was of the view that assessee has acquired this software and this has enduring benefit therefore the cost for acquisition of such software is capital in nature and allowed depreciation @16%.

17.2. On appeal, the Ld. CIT(A) following the DRP directions for the Assessment Years 2006-07 and 2008-09 upheld the finding of the Assessing Officer that these expenses are being incurred for acquisition of software and therefore it is capital in nature.

18.1. Ld Counsel submits that the assessee has claimed the said amount as revenue expenditure under section 37(1) of the Act. The learned AO held that the said expense is being incurred for acquisition of software and accordingly, is a capital expenditure which should be capitalised in the books of account. The depreciation @ 60% is allowed on the said expense treating the same as being incurred for acquisition of software.

18.2. Ld Counsel submits that the Ld. CIT(A) following the DRP directions for A.Y 2006-07 and 2008-09 upheld the finding of the AO that these expenses are being incurred for acquisition of software and thus, is capital in nature. The Ld. CIT(A) also held that the software was to be developed by the parent company would be provided to the Assessee free of cost which amounts to acquisition of asset to be capitalized in several years and hence providing enduring benefit.

18.3. The Ld. Counsel submits that these expenses facilitate the efficient and smooth conduct of its business activities, being essentially in the nature of access/ usage charges for various applications, intranet websites, emails, global resources, etc and services such as data security, performance tuning, etc, all of which are required for the day-to-day running of the business. However, during the assessment proceeding, the learned AO relied on the head 'Scope of Contract' at Para 1.1 of the contract which mentioned as under :-

UCB shall at its discretion perform development work on softwares or new' functionalities which shall be offered to UCB COMPANY 18.4. The Ld. Counsel submits that the learned AO inferred that "license charges" includes expenses on development of software and in case of any future changes, upgradation or new versions that will be developed in future, the assessee will have an access to the same. The AO further, held that since the Assessee is not in the business of Software but in the manufacturing business acquiring of the e- connectivity and information system services is to support its pharmaceutical business. Further, schedule 1 to the agreement, i.e. 'Services' which is SAO Services to UCB Entities was referred and held that the e-connectivity tantamount acquiring of a 'Software.' Accordingly, the AO has held that it the payment for e-connectivity charges was for purchase of software and accordingly, allowed depreciation at the rate of 60% on the same. The Ld. Counsel further submits that the assessee does not get any owner's right to any software, server, processes, connections etc. The Assessee merely receives services related to the software. Also, the Assessee pays the costs/ charges for usage of the lease line separately.

18.5. The Ld. Counsel further submits that UCB SA provides these services at the same professional service standard as other third party service providers. The allocation of these expenses by UCB SA is also done on a rational basis, i.e the number of employees in the assessee company and usage of the remote connections. Further, these expenses are in the nature of periodic (annual) charges, and are not one-time costs resulting in any long-term benefit. In addition, if the assessee does not pay the same, it would no longer have access to these services. Therefore, the assessee has neither acquired any enduring benefit nor does any new capital asset comes into existence and hence, the above expenditure is not capital in nature.

20.1. It is the contention of the assessee that it has not acquired any software but was paying annual charges towards activity for various services provided for the parent company in access/usage of SAP modules and various other services referred to above. ON going through the agreement entered into by the assessee, we find that assessee has not acquired any software from its parent company but assessee is paying activity charges for the facility of access/usage of various applications, intranet websites, emails, global resources etc for day today running of the business. We do not find any acquisition of software by the assessee by payment of this activity charges. We also do not find any enduring benefit for the assessee. Thus, we hold that the e-connectivity charges paid by the assessee are of Revenue in nature.

“1. The Ld. CIT(A) has erred on facts and in law in rejecting CUP method followed by Assessing Officer/TPO for computing of the arm’s length price in respect of international transaction of purchase of Active Pharmaceutical Ingredients from its associate enterprise without properly appreciating the factual and legal matrix of the case as clearly brought out by the Assessing Officer in the assessment order.

25. In reply, the Ld. Counsel for the assessee submits that assessee has furnished segmental date before the Ld. CIT(A) and CIT(A) discussed these details and remand report is also called from TPO and considering the remand report and the segmental results filed by the assessee, the Ld. CIT(A) accepted the TNMM method is the most appropriate method and deleted the adjustment and therefore prays for sustaining the order of the Ld. CIT(A).

26. We have heard the rival contentions and perused the orders of the authorities below. In this case, the Tribunal for the Assessment Years 2002-03 and 2003-04 rejected CUP method and considered segmental TNMM method as the most appropriate method directed the Assessing Officer to examine the external comparables and in the absence of such comparables to accept internal comparables including segmental data or internal TNMM and adjudicate the issue in accordance with law after giving adequate opportunity to the assessee. It is the submission of the assessee that order giving effect was passed by the TPO granting relief as per the directions of the ITAT for the Assessment Years 2002-03 and 2003-04 and such order is placed at page-183 to 188 of the Paper Book. It is the submission that segmental data has been provided and considering the same effect order was passed for the year under consideration also. We find from the order of the Ld. CIT(A) that remand report was called for by the Ld. CIT(A) and considering the remand report and directions of the DRP for the Assessment Years 2006-07 and 2008- 09, the Ld. CIT(A) held that assessee’s margin is quite high as compared to arithmetical mean margin of the comparables and therefore adjustment made by the Assessing Officer/TPO being CUP as Most Appropriate Method is directed to be changed following the decision of this Tribunal in assessee’s own case for Assessment Year 2002-03 and 2003-04. The Ld. CIT(A) further held that Assessing Officer/TPO would be at liberty to factually verify the benchmarking analysis carried out by the assessee under TNMM on transaction to transaction basis in consonance with directions of ITAT while giving effect to this order of the Ld. CIT(A). While holding so, the Ld. CIT(A) observed as under:

“Since the facts were identical in this year also, the matter as stated above was referred to the AO/TPO to verify the material submitted by the appellant as to whether the transactions of import of APIs (i.e. the margins of FDF segment) meet the arm's length test.

In remand report the A.O. stated that the appellant has incorporated the other income on sale ratio of FDF on total sales and if the same is excluded the operating margin of FDF goes down at 28.42%. The AO/TPO further stated that the computation of operating margin for FDF segments which has adopted the cost of goods sold on the basis of consumption ratio of raw materials by FDF segment to total segment could not be verified. It was also stated that against all these expenses have been apportioned on the basis of sale ratio. Explaining this the appellant stated that the statement was factually incorrect since the raw material was allocated on direct basis while only common operating expenses were apportioned in raw material consumption ratio. It was further stated that even if it is taken on sales ratio the Margin goes to 28.42%.

The appellant further stated that it has submitted segmental margin analysis computed using same methodology in Transfer Pricing study in as A. Y.s 2005-06 upto 2008-09 which has been accepted by the TPO and hence there should not be any objection by him in this regard. Regarding computation of margin on comparable AO has shown arithmetical mean 6.41% in 22 comparables and thereafter suggested exclusion of few comparables whose operating revenue are very less and also loss making companies. Even if these companies are excluded arithmetic mean works out to 8.42% against which appellant had arithmetical mean of 28.42% excluding other operating income and hence the international transaction entered meets arm's length test. Regarding non submission of screen shot for computing the fresh' search it was stated by the appellant that same were submitted as per letter dated 21.01.2011 before the TPO. Even otherwise the search was conducted on prowess data and capitaline which was accessible by the TPO as well. Regarding TPO's objection for non specification of percentage of RPT the appellant stated that for computing of comparable companies, companies in related party transaction have already been rejected and hence the observation was not correct.

Since CUP method was rejected by Hon'ble IT AT and also objected to by TPO in remand, same is not being considered. Accordingly objection raised by TPO under rule 46A is not relevant. For evidence relating to TNMM no objection was raised by TPO. Accordingly in view of submission vide dated 20.07.2011 and case laws referred to therein, same is admitted.

The DRP vide order 20.09.2010 in A.Y. 2006-07 relying upon the judgement of Hon'ble ITAT have accepted the transactional computation made by the assessee under TNMM and rejected the CUP method and deleted adjustment made under CUP method.

Similar directions were given in A.Y. 2008-09 also by DRP vide order dated 30-07.2012. The observation of DRP is reproduced as under :-

We have gone through the orders of the ITAT for the A. Y 2002-03 and 2003-04 and the Transfer Pricing Report of the assessee, during the year under consideration. The assessee during the year has made transaction wise comparability analysis in the Transfer Pricing Report. The TPO without taking into consideration the directions of the ITAT in assessee's own case for the A.Y 2002-03 and 2003-04 still followed the approach of the then TPO and applied CUP method to benchmark the transaction of import of AP1 from AEs. The TPO has completely ignored the fact that during the year under consideration, the assessee had not followed the entity level comparability under TNMM, but has benchmarked every transaction separately under TNMM In view of the above, the Adjustment made by the TPO/AO using CUP As the MAM, is directed to be changed following the decision of the ITAT in assessee's own case for the A. Y 2002-03 and 2003-04. The TPO/AO are at liberty to verify the benchmarking analysis done by the assessee under the TNMM on transaction by in consonance with the directions of the 1TAT in the earlier years, while giving effect to these directions. As the adjustment proposed by the TPO using CUP as the MAM has already been directed to be deleted, the other objections raised by the assessee become infructuous From the above it is noted that Hon'ble ITAT had directed to carry out the transaction wise analysis which has been carried out in this year also by the assessee, verified by TPO and which has been analysed in the preceding paragraphs. CUP method was not approved by the Hon'ble ITA T following which and also on the basis of the objection raised by the TPO in remand report the CUP method is rejected. Under TNMM all the objections raised by the TPO in his remand report have been addressed by the appellant as discussed above and accordingly it is held that the appellant's margin is quite high as compared to arithmetical mean margin of the comparables and hence the adjustment made by the AO/TPO being CUP as MAM is directed to be changed following the decision of the Hon'ble ITAT in appellant's own case for A.Y. 2002-03 and 2003-04. However, the Assessing Officer/TPO would be at liberty to factually verify the benchmarking analysis carried out by the appellant under TNMM on transaction to transaction basis in consonance with directions of IT A T while giving effect to this order. This ground of appeal is therefore allowed subject to verification as above”.

As seen from the above, the Ld. CIT(A) adopted the directions given by the DRP for the Assessment Year 2006-07 and 2008-09 for the year under consideration to change the method following the decision of the ITAT. The above findings have not been rebutted by the Revenue, we do not find any infirmity in the order passed by the Ld. CIT(A) for the year under consideration also.

28. The first ground of appeal in assessee’s appeal is that the Ld. CIT(A) erred in upholding the disallowance of sales promotion expenses incurred by the appellant to the tune of Rs. 11,94,376/- by considering the same as not having been incurred for the appellant’s business.

22. This issue is identical with the issue in Ground No.1 in for assessment year 2004-05 from para 2 to 7. Therefore, on similar lines and for similar reasons, the ground raised by the assessee in ITA No. 6682/M/13 for assessment year 2005-06 is allowed.

23. The second ground in assessee’s appeal is that the Ld. CIT(A) erred in upholding the addition of Rs. 31,56,446/- by considering e- connectivity charges as an expense incurred for acquiring Software and resulting in benefit of enduring nature and thereby classifying the expenses as Capital expenditure.

24. This issue is identical with the issue in Ground No.4 in for assessment year 2004-05 from para 17 to 20.1. Therefore, on similar lines and for similar reasons, the ground raised by the assessee in ITA No. 6682/M/13 for assessment year 2005-06 is allowed.

27. This issue is identical with the issue in Ground No.1 in for assessment year 2004-05 from para 22 to 26. Therefore, on similar lines and for similar reasons, the ground raised by the Revenue in ITA No. 6455/M/13 for assessment year 2005-06 is allowed. – A.Y. 2007-08 – Assessee’s appeal

Order pronounced in the open court on 18th May, 2016. (RAJENDRA) (C.N. PRASAD ) लेखा सद"य / ACCOUNTANT MEMBER "या"यक सद"य/JUDICIAL MEMBER मुंबई Mumbai; "दनांक Dated : 18th May, 2016 व."न.स./ Rj , Sr. PS