Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2018 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (4) TMI 705 - AT - Income TaxClaim of depreciation made for acquiring right to render BPO services to Cummins in USA. - whether acquisition of right to render BPO services was deductible expenditure under section 37(1) - Held that:- In assessment year 2010-11 DRP held the assessee eligible to claim depreciation on the said consideration paid being intangible asset, covered by the ratio laid down by the Hon'ble Supreme Court in CIT Vs. Smifs Securities Ltd. (2012 (8) TMI 713 - SUPREME COURT). Since the Assessing Officer in the year under consideration had also held the payment made by the assessee was at best being payment for goodwill and where similar claim has been allowed in the hands of assessee in assessment year 2010-11, we hold the assessee to be entitled to claim depreciation on the right to render BPO services being goodwill in the hands of assessee. Thus, we reverse the order of Assessing Officer in disallowing depreciation of ₹ 2.26 crores. Accordingly, we direct the Assessing Officer to allow the said claim of assessee. The grounds of appeal No.1 and 2 raised by the assessee are allowed. Ground raised by the assessee on without prejudice basis in allowing the said expenditure as deductible under section 37(1) of the Act is rejected. Transfer pricing adjustment - Held that:- The assessee was offering skills and rule based services i.e. transaction processing, finance & accounting, HR processing, etc; technology based services e.g. Technical help desk solutions and knowledge based solutions such as Sarbanes Oxley solutions, data analytics, etc. The assessee was offering enterprise and extensive solutions in the core business area of knowledge based, skill based and technology based services, thus companies functionally dissimilar with that of assessee need to be deselected from final list.
|