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TMI Blog2020 (10) TMI 880X X X X Extracts X X X X X X X X Extracts X X X X ..... ises inter alia business claims, business information, business records, contracts, skilled employees knowhow has been purchased for a consideration to acquire the running business, it is comparable to a licence to carry out the existing transmission and distribution business of the transferor and in the absence of aforesaid intangible assets business, assessee would have to commence business from scratch. Effect of acquiring running business with tangible and intangible assets including goodwill and customer contracts are quite visible as turnover of the assessee has been increased during the year under assessment. Despite the fact that the assessee has given the complete details of agreement vide which tangible and intangible assets of ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the Ld. CIT(A) has erred in holding that the Assessing Officer is wrong in disallowing depreciation u/s 32 claimed on self valued, unsubstantial intangibles declared as customers contract goodwill , whereas no such breakup was part of agreement with KPIT. 2. Whether the CIT (A) has erred in allowing depreciation on claimed intangible customer contract which is not covered in the definition of Intangible Assets as defined in Explanation 3 to Section 32 (1) of the IT Act. 3. For the sake of brevity, we are taking up the facts of ITA No.3475/Del/2018 for AY 2012-13 to dispose off all the four appeals bearing common question of law and facts which are : 4. Assessee company is into the business of sale of software licence, software developmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies below in the light of the facts and circumstances of the case. 7. Undisputedly, during the year under assessment, the assessee has acquired certain business interest from M/s. KPIT Cummins Infosystems Ltd. for a consideration of ₹ 19,02,00,000/- out of which an amount of ₹ 6,52,80,577/- and ₹ 10,89,60,000/- has been shown as goodwill and customer contract respectively. It is also not in dispute that assessee has furnished detail of amount of ₹ 17.52 crores paid during the year under assessment based on the valuation report dated 21.08.2012 which is as under :- Sr. No. Asset Amount (Rs.) 1 Customer Contracts 10,89,00,000 2 Goodwill 6,52,80,577 3 Computer Equipment 9,00,000 Total 17,50,80,577 8. It is also not in d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, 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. 11. Hon ble Supreme Court in CIT vs. Smiffs Securities Ltd. (2012) 348 ITR 302 held that, goodwill is an asset under Explanation 3B to section 32 of the Act and is eligible for depreciation . 12. So far as depreciation of customer contracts is concerned, ld. AR for the assessee contended that the assessee is entitled for depreciation on customer contracts also in view of the decision rendered by the Hon ble Delhi High Court in case of Areva T D India Ltd. vs. DCIT (2012) 345 ITR 421 (Delhi). 13. Hon ble Delhi High Court in Areva T D India Ltd. (s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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