Genpact Services LLC v. DCIT - Taxpublishers.in

SUBSCRIBE FOR FULL CONTENT


The Tax Publishers2023 TaxPub(DT) 780 (Del-Trib) : (2023) 200 ITD 0048 IN THE ITAT, DELHI BENCH: D NEW DELHI G.S. PANNU, PRESIDENT & SAKTIJIT DEY, J.M. Genpact Services LLC, v. DCIT, ITA No.2524/Del/2016 A.Y. 2010-11 31 January 2023 Appellant by: Tarandeep Singh, Advocate Tarun Singh, Advocate Respondent by: Anand Kumar Kedia, Commissioner (Departmental Representative) Mrinal Kumar Das, Sr. DR ORDER *Saktijit Dey, J.M.* Captioned appeal by the assessee arises out of order dated 15-2-2016 of learned Commissioner (Appeals)-42, New Delhi, pertaining to assessment year 2010-11. 2. As could be seen from the grounds raised, basically, two issues arise for consideration. Firstly, whether the expenditure incurred by the assessee for acquiring customer contracts and assembled workforce from M/s. Genpact India is revenue or capital in nature and secondly, whether learned first appellate authority was justified in reducing the value of customer related contracts and goodwill by tinkering with the value determined by registered valuer. 3. Briefly the facts relating to these issues are, the assessee is a non-resident corporate entity incorporated under the laws of Delaware, United State of America (USA). As stated by the Assessing Officer, the assessee is engaged in the business of providing Information Technology Enabled Services (ITES), such as, data entry, conversion/processing data, business support, billing services. For the assessment year under dispute, the assessee filed its return originally on 12-10-2010 declaring loss of Rs.3,89,17,092. Thereafter, the assessee filed a revised return on 27-12-2011, declaring loss of Rs.6,78,78,188. In course of assessment proceeding, while examining the return of income filed by the assessee along with financial statements, Assessing Officer noticed that in the year under consideration, the assessee had acquired third party debt collection services as well as part of analytical business of M/s. Genpact India as slump sale as a going concern on as is where is basis for a total consideration of Rs. 62,12,70,648. Out of which, an amount of Rs.39,96,70,372 was paid towards acquisition of tangible assets. Whereas, the balance amount of Rs.22,16,00,276 represents payment made towards customer contracts, assembled workforce etc. The Assessing Officer found that in the return of income, the assessee had claimed the amount of Rs.22.16,00,276 as revenue/business expenditure. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2023 TaxPub(DT) 780 (Del-Trib) : (2023) 200 ITD 0048

IN THE ITAT, DELHI BENCH: D NEW DELHI

G.S. PANNU, PRESIDENT & SAKTIJIT DEY, J.M.

Genpact Services LLC, v. DCIT,

ITA No.2524/Del/2016

A.Y. 2010-11

31 January 2023

Appellant by: Tarandeep Singh, Advocate Tarun Singh, Advocate

Respondent by: Anand Kumar Kedia, Commissioner (Departmental Representative) Mrinal Kumar Das, Sr. DR

ORDER

Saktijit Dey, J.M.

Captioned appeal by the assessee arises out of order dated 15-2-2016 of learned Commissioner (Appeals)-42, New Delhi, pertaining to assessment year 2010-11.

2. As could be seen from the grounds raised, basically, two issues arise for consideration. Firstly, whether the expenditure incurred by the assessee for acquiring customer contracts and assembled workforce from M/s. Genpact India is revenue or capital in nature and secondly, whether learned first appellate authority was justified in reducing the value of customer related contracts and goodwill by tinkering with the value determined by registered valuer.

3. Briefly the facts relating to these issues are, the assessee is a non-resident corporate entity incorporated under the laws of Delaware, United State of America (USA). As stated by the Assessing Officer, the assessee is engaged in the business of providing Information Technology Enabled Services (ITES), such as, data entry, conversion/processing data, business support, billing services. For the assessment year under dispute, the assessee filed its return originally on 12-10-2010 declaring loss of Rs.3,89,17,092. Thereafter, the assessee filed a revised return on 27-12-2011, declaring loss of Rs.6,78,78,188. In course of assessment proceeding, while examining the return of income filed by the assessee along with financial statements, Assessing Officer noticed that in the year under consideration, the assessee had acquired third party debt collection services as well as part of analytical business of M/s. Genpact India as slump sale as a going concern on as is where is basis for a total consideration of Rs. 62,12,70,648. Out of which, an amount of Rs.39,96,70,372 was paid towards acquisition of tangible assets. Whereas, the balance amount of Rs.22,16,00,276 represents payment made towards customer contracts, assembled workforce etc. The Assessing Officer found that in the return of income, the assessee had claimed the amount of Rs.22.16,00,276 as revenue/business expenditure.