2016 (12) TMI 408

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.... 'buyer') is not a genuine slump sale to qualify treatment under Section 50B of the Income Tax Act, 1961". 3. The assessee is engaged in the business of design, engineering and consultancy in the oil and gas (both onshore and offshore), petroleum refinery and allied sector. It provides a range of services starting from concept or project which includes feasibility study, process design and detail engineering procurement services, construction supervision etc. On 22.09.2006 it entered into a Slump Sale Agreement (hereafter referred to as 'the agreement') with the buyer. The agreement had the effect of transferring the business undertaking entered by the appellant/assessee as a going concern. All tangible assets and liabilities together wi....

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....r's appeal, accepted the genuineness of this slump sale agreement of 22.09.2006 and set aside the findings of the AO and the CIT(A). The ITAT, however, remanded the matter with respect to valuation of goodwill to the AO. The buyer, therefore, appealed to this Court. By judgment and order reported as Triune Energy Services Pvt. Ltd. Vs. Deputy Commissioner of Income Tax, 2015-TIOL-2701-HC-Del-IT, it was held that the finding of the ITAT with respect to the genuineness of slump sale was on account of a cross appeal by the Revenue on this point. 6. On the other issue of the remit (for which the assessee had appealed), this Court held that goodwill was an intangible asset and the question of its valuation, in any manner, other than the one d....

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....issue afresh in view of the above submission of the assessee and the decisions cited above, after affording oppo1iunity of being heard to the asesse, as the submissions of assessee before us meeting out the above objections raised by the Ld. CIT(A) reproduced in para no. 28 above, need factual' verification in view of the above cited decisions to arrive at a just and proper conclusion on the issue. The ground No.2 of the appeal of the assessee is thus allowed for statistical purposes." 8. It is contended by the assessee that the question of remitting the matter, as was sought to be done by the impugned order, does not arise and that the previous ruling in Triune's case (supra) concludes the same entirely in its favour. 9. Learned ....

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....antial. The sale transaction was reported for a total consideration of Rs. 45.83 crores. The sale was for a going concern, which included ongoing service contracts, employment contracts and other tangible assets, and intangible assets such as technical know-how etc. To expect a purchaser to buy and pay value for defunct or superfluous assets flies in the face of commercial sense. Unfortunately, the Revenue's understanding is that in a going concern the buyer is bound to pay good money, transact and purchase bad and irrecoverable debts. Not only does it fly in the face of common and commercial understanding, but it is not even a pre-condition , as is evident from the definition of "undertaking", cited in Explanation (1) to Section 2 (19) (A)....