TaxTMI 
TaxTMI 
2017 (9) TMI 1576
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....at the income arising from transfer of petroleum exploration/mining rights by ONGC to certain private companies was assessable not under the head "Profit & Gains of business or profession" but under the head "Capital Gains". Since the cost of acquisition of the rights had been claimed as revenue expenditure, the consideration accruing on transfer of the same had been correctly treated as revenue receipt and taxed as part of profit of business by the AO. 2. Even while holding that the income arising from transfer of petroleum exploration/mining rights by ONGC to certain private companies was assessable under the head "Capital gains". The Ld. CIT (A) erred in holding that the 'book value' of the assets of the business in question had to be....
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.... to receive 40% of the share in the production and in addition to the sum of certain amounts depending upon the achievement of certain level of production. During the AY 1995- 96, assessee received a sum of Rs. 219.76 crores as 'Signature bonus' for demitting 60% share in the oil fields and the AO treated the same as Revenue receipt and brought it to tax. However, in appeal Ld. CIT (A) held that the transfer by the assessee was a Revenue yielding asset i.e. the oil mines and that any transfer of capital asset would lead to capital gain or capital loss but in so far as this particular case on hand is concerned what the assessee received was Rs. 219.76 crores for transfer of 60% of shares in the oil fields the book value of which was 882.86 c....
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.... about 882.86 crores, the assessee received only a sum of Rs. 219.76 crores. Secondly, he submitted that here what was transferred was an ongoing concern with all the lock, stock and barrel including the employees and all other attendant and ancillary maters, as such, this type of slump sale transaction cannot be brought to tax because there were no computation provisions prior to 1.4.2000 that could be brought to tax as capital gains the consideration received in slump sale. He placed relied on the decision reported in PNB Finance Ltd. vs. Commissioner of Income Tax (2008) 307 ITR 75 (SC) & CIT vs. DLF Ltd. 2017-TIOL- 1818-HC-DEL-IT. 4. As could be seen from the record, it is evident that ONGC transferred 60% of rights in three fields to ....