Aptara Technologies Private Limited Vs DCIT (ITAT Pune)
ITAT Pune held that creation of artificial intangible asset i.e. goodwill in intra-group merger is merely a colourable transaction out between the Holding Company and the subsidiary company. Accordingly, depreciation claimed thereon deserves to be disallowed.
Facts- During the course of assessment proceedings, AO observed that there is an amalgamation in the nature of merger with MLPL (Transferor company) and Assessee-ATPL (Transferee company).
As per the scheme of amalgamation, the shareholders of MLPL got 60.72 Equity shares (face value of Rs.10/- each) in ATPL for every1 Equity share held by the shareholders in MLPL. AO has further observed that as per the merger note through which net assets of the MLPL have been taken over by ATPL, consideration of Rs.6,07,20,000/- is shown to be due to the shareholder of amalgamating company. Against this outstanding, ATPL has issued 60,72,000 Equity shares to the existing shareholder of MLPL. After the reduction of the face value of the share capital of MLPL, remaining amount of consideration is said to be towards Goodwill amounting to Rs.5,97,20,000/- and this Goodwill has been shown as Intangible asset in the books of Transferee company and depreciation @ 25% has been claimed.
