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2010 (3) TMI 711

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....s.22,55,710. The return was processed under section 143(1)(a) of the Act. During the course of assessment, it was noticed that a sum of Rs.1,26,97,540 had accrued to the assessee towards the obligations per-formed which had been credited to the partners' current accounts. There-fore, there was an order to reopen the assessment. Accordingly, notice was issued.   4. The Revenue found that the assessee had transferred its undertaking to M/s. Agrosynth Chemicals (P) Ltd. for a sum of Rs. 1,50,00,000 and the actual value of the assets sold was only Rs. 23,02,460. Applying the pro-visions of section 41(2) of the Act, the order of assessment was passed. Being aggrieved by the same, the assessee filed an appeal stating that the provisions of ....

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.... WDV and the difference would be liable to tax as business income of the previous year ?" 6. We have heard the learned counsel for the parties. 7. Learned counsel for the Revenue relied upon the judgment of the apex court in CIT v. Artex Manufacturing Company [1997] 227 ITR 260 (SC), contending that the value of the plant, machinery, stock-in-trade can be valued. Therefore, the excess amount received by the assessee under the agreement has to be treated as an income and is liable to tax as capital gain 8. Per contra, Mr. Parthasarathi, learned counsel, for the assessee contends that the facts involved in the present case are different from the facts involved in Artex Manufacturing Company [1997] 227 ITR 260 (SC). According to him, the ju....

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....en the appeal of the Revenue has to be dismissed, by answering the questions of law. In order to appreciate the facts of this case, the agreement entered into between the assessee and M/s. Agrosynth Chemicals Ltd., we have to examine the nature of trans-actions. The learned counsel for the parties have made available the copy of the agreement entered into between the assessee and the purchaser, dated December 1, 1994. Under the agreement, the entire land measuring 5 acres along with the factory buildings, plant and machinery and the assets and liabilities are sold for a total consideration of Rs. 1,50,00,000 and the company which has purchased it had agreed to pay the con-sideration of Rs. 1,50,00,000 by allotting 15 lakhs equity shares of ....