Case Law Details
DCIT Vs Infrasoft Technologies Ltd (ITAT Delhi)
Undisputedly, during the year under assessment, the assessee has acquired certain business interest from M/s. KPIT Cummins Infosystems Ltd. for a consideration of Rs.19,02,00,000/- out of which an amount of Rs.6,52,80,577/- and Rs.10,89,60,000/- has been shown as goodwill and customer contract respectively.
It is also not in dispute that the assessee has claimed aforesaid investment in two intangible assets and claimed depreciation thereon. It is also not in dispute that the aforesaid intangible assets have been acquired by the assessee by virtue of the Business Transfer Agreement dated 24.06.2011 entered into between the assessee and M/s. KPIT Cummins Infosystems Ltd. for acquiring BFSI Software Services business comprising target customer contracts, target employees and target assets.
Perusal of the impugned order passed by the ld. CIT (A) shows that the issue in controversy has been thrashed in entirety in the light of the law laid down by the Hon’ble Apex Court and Hon’ble Delhi High Court. AO has disallowed goodwill and customer contract merely on the basis of surmises; that consideration paid on account of customer contract and goodwill has been classified as intangible assets just to reduce its tax liability by wrongfully claiming goodwill and customer contract.
Assessee has purchased the running business of M/s. KPIT Cummins Infosystems Ltd. for acquiring its banking and financial services business (BFSI) for a consideration of Rs.19,02,00,000/-as per valuation report, available at pages 87 to 89 of the paper book. Valuation Report contains value of tangible and intangible assets separately as in the business of banking and financial software business, contracts and the people along with a marginal amount of assets is considered as the major component of the transfer. Furthermore, in the business transfer agreement, complete detail of specified BSFI business, target assets, target customers and name of the target customers are available at pages 46 & 47 of the paper book.
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