Xin Shang Enterprise (XSE) is incorporated and registered in Mainland China and closes its account on 31 March every year. XSE's principal business is the sale of own manufactured TV sets. In January 2020, XSE acquired a subsidiary in Hong Kong, namely Moving Fast Limited (MFL). MFL was incorporated in Hong Kong in 2004 and has been engaged in the retailing of electrical appliances for many years. After the acquisition, XSE injected a new business line of trading of TV sets to MFL. For the trading business, XSE accepted all the sales orders and instructed MFL to issue the invoices and arrange the necessary payment and receipts in Hong Kong. The purpose of putting through the trading transactions through MFL was to circumvent the trade restrictions of the countries where customers were located. The profit and loss account of MFL for the year ended 31 March 2021 showed the following information: Question 1 (15 marks) The management of MFL would like to lodge an offshore claim in respect of the profits derived from the trading business of HK $3,000,000 because they thought the operations generating the profits were done by XSE in Mainland China. Required: Outline the arguments for and against the offshore claim