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2018 (5) TMI 1175 - HC - Income TaxValuation of goodwill - transfer of trademark and technical knowhow - whether goodwill would be reduced to nil - Department contended that the assessee had deliberately under-valued the goodwill since the gain arising out of transfer of such asset was exigible to capital gain tax as compared to trademark where no tax was leviable - Held that:- The reflected sale consideration in an agreement between the transferor and transferee in such a situation cannot be lightly tampered with. The Assessing Officer in addition to having discarded such valuation, adopted a rather simplistic method of substitution of book mean of the transferred value of trademark and the goodwill and projected the resulting figure as a consideration for transfer of goodwill. If the assessee’s adoption of the sum of ₹ 15.67 lakhs as valuation for goodwill was not backed by any material or data on the record, the substitution adopted by the Assessing Officer suffered from greater vice. There was no basis for him to believe that the trademark and goodwill must value at the same level. This Court in case of Parle International Limited [2016 (8) TMI 658 - GUJARAT HIGH COURT] has frowned upon the Assessing Officer discarding the disclosed consideration in an agreement by doubting its genuineness without there being any supporting material on record.
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