Case Law Details
DCIT Vs Gea Process Engineering (India) Pvt Ltd (ITAT Mumbai)
Held that consideration paid by the assessee in excess of its value of tangible assets was rightly classified as goodwill the same is eligible for depreciation
Facts-
The assessee company a Gea Process Engineering Pvt. Ltd. is a joint venture between L&T Ltd., India and Niro A/s, Denmark. The said joint venture was discontinued and the entire stake of L&T in the assessee company was bought over by Niro. Later the assessee company changed its name to Jewel Process Engineering India Pvt. Ltd. and became a wholly-owned subsidiary of Niro A/s, Denmark. While executing Erection, Procurement and Commissioning (EPC) contracts the assessee company designs the installation, procures the necessary materials, erects the plants as per the agreed design and ensures commissioning of same, which is engaged primarily in the execution of EPC turnkey projects in the food, dairy and chemical and pharma sectors. During the year under assessment assessee company entered into international transactions with its AE.
In its ROI the assessee company claimed a net loss of Rs.23,32,26,686/-. The Transfer Pricing Officer (TPO) called up the assessee to show cause as to why the segmental profit and loss should not be rejected and Transactional Net Margin Method (TNMM) be applied at the entity level.
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