TaxTMI 
TaxTMI 
2005 (6) TMI 32
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to the limited company was its running business, as a going concern together with all the assets and liabilities and the provisions of section 41(2) of the Act cannot be invoked under the facts and circumstances of the assessee's case?" The assessment year is 1973-74 and the relevant accounting period is the calendar year 1972. The assessee, a registered firm, entered into an agreement with a private limited company known as Garden Silk Mills Private Limited The agreement dated December 1, 1971, recorded that the assessee was to transfer the business of the firm, run in the firm name and style of Garden Silk Weaving Factory, as a going concern together with all the assets and liabilities. The agreement was followed by necessary accounti....
X X X X Extracts X X X X
X X X X Extracts X X X X
....July 16, 1981 restored the matter back to the Income-tax Officer to consider the claim of the assessee that the transfer was of the whole business and not of any individual assets in the light of the judgment of this High Court in the case of Artex Manufacturing Co. v. CIT [1981] 131 ITR 559. The cross-objections of the Department were dismissed as being barred by limitation. (g) Once again the Assessing Officer treated a sum of Rs. 10,25,135 as profit liable to tax under section 41(2) of the Act by framing a best judgment assessment under section 144 of the Act. (h) The assessee sought rectification of the said assessment by application under section 154 of the Act, as a result of which by order dated April 6, 1984, the addition was ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er, the Tribunal restored the matter back to the Commissioner of Income1 tax (Appeals) to determine whether the assessee was liable to be charged under the head "Capital gains". It is this order which is under challenge in the present proceedings. Mr. Tanvish U. Bhatt, learned standing counsel appearing on behalf of the applicant-Revenue, assailed the order of the Tribunal primarily on the ground that the Assessing Officer had taken the details which are available on record to compute the balancing charge under section 41(2) of the Act and the Tribunal had wrongly read the agreements between the assessee-firm and the limited company to hold that there was transfer of the entire business as a going concern. Alternatively, relying on the d....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ll the agreements are read together what emerges is that what was sold by the assessee-firm to the limited company was the running business as a going concern together with all the assets and liabilities and hence applying the ratio of the decision of the jurisdictional High Court and the apex court the provisions of section 41(2) of the Act cannot be invoked. The Commissioner of Income-tax (Appeals) has referred to the agreement dated December 1, 1971, and after reproducing various clauses of the said agreement together with the agreements dated January 1, 1972, and August 17, 1973, came to the conclusion that it was beyond the pale of doubt that the transfer was of the entire business if various terms of the agreements are borne in mind. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....p; 77,37,579 Less: Liabilities taken over 62,22,579 ----------- 15,15,000" ------------------------------------------------------------------------------- On going through the aforesaid figures it is apparent that the Assessing Officer had adopted the aggregate values of the build....
X X X X Extracts X X X X
X X X X Extracts X X X X
....noticed hereinbefore, in the present case both the Commissioner (Appeals) and the Tribunal have concurrently found after appreciating evidence on record (in the form of various agreements) and on the facts that the transaction was a slump sale, i.e., the entire business undertaking was sold as a going concern and there was no itemised sale. Even the assessing authority has not been able to work out the itemised sale qua each building, machinery or plant as the case may be. Therefore, in the absence of any evidence on record to dislodge the findings of fact recorded by the Commissioner (Appeals) and the Tribunal, it is not possible to find any infirmity in the impugned order of the Tribunal so as to hold that the provisions of section 41(2) ....