2017 (6) TMI 80

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....erm capital gain." 2. "On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of negative net woth of Rs.(-) 10,00,54,507/- to the long term capital gain without appreciating the fact that on the similar issue the Special Bench of the Mumbai Tribunal in the case of DCIT Vs. Sumit Securities Ltd ha~ decided this issue in favour of Revenue." 3. "On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition on contingent interest liability of Rs. 2,62,20,586/- while calculating the net worth of the assessee company without appreciating the fact that this liability need to be considered for arriving at the correct net worth." 4. "On the facts and circu....

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....ard to the determination of full value of consideration in those cases where the negative net worth of an undertaking transferred on slump sale basis, is on account of excess of liabilities of the undertaking over its assets transferred to the transferee party. The dispute before the Special Bench is not in respect of those cases, where the negative net worth is on account of accumulated losses in the undertaking. In the case of accumulated losses in an undertaking, no extra benefit, over and above the sale consideration, would be derived by the transferor on account of the slump sale of the undertaking. It is only in those cases, where the transferee party takes over all the liabilities and assets in a case of slump sal1 and the liabilitie....

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.... the past. Practically speaking therefore, the appellant is not going to get any benefit over and above the sale consideration in this case. In such a case, therefore, in terms of section 50B, the cost for the purpose of computation of capital gain could not be a negative figure. Hence, in my view the appellant has rightly adopted the net worth (or the cost) of the undertaking as nil for the purposes of section 50B of the Act. Furthermore, the issue can also be looked into from the point of view of the purchaser. If the negative net worth is also considered to be the par of sale consideration, then the total gain to the seller would be adopted as the cost in1the hands of the purchaser. Therefore, when the purchaser sells the undertaking ....