TaxTMI 
TaxTMI 
2021 (6) TMI 124
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....ell as CIT (A) erred in denying the slum sales of the appellant and consider the sale transaction under the head long term capital gain and accordingly added a sum of Rs. 2,38,58,286/-. 3) The Ld CIT(A) is erred in not appreciating the fact that the appellant company had 2 going concern units and all the details were already filed before the Ld AO. 4) Ld.A.O as well as CIT(A) erred in applying sec 50C of the I.T. Act on sale of going concern unit of appellant under the provision of slum sale. 5) The Appellant prays to delete the addition made on this account. 3. Brief facts of the case as under : During the previous year 2013-14, the assessee sold its unit at Roorkee comprising of land, building and plant & machinery for a considera....
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....nd machinery was not a slump sale rather it was a regular sale. The Assessing Officer contended that the unit was not sold as an ongoing concern because no production activity was carried out in the unit for the preceding two years. Accordingly, the Assessing Officer computed long-term capital gain after invoking the provisions of Section 50C of the Act at Rs. 2,38,58,286/-. 4. Upon assessee's appeal learned CIT(A) upheld the order of the Assessing Officer by agreeing with him as under :- I have considered the submissions of the assessee. Slump sale is defined in section 2(42C) of the Act. The same is reproduced below: (42C) "slump sale" means the transfer of one or more undertakings as a result of the sale for a lump sum consideration....
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....activity rather than the factory where the activity takes place. In the instant case what was sold was definitely not an undertaking but a factory. As the AO has pointed out, there was no continuity of business. The appellant has contended that it had produced some sales bills before the AO and has contended that those sales prove that the unit was running and was an ongoing business concern. The claim is not correct. A few instances of sale cannot prove that production was going on; it is quite possible that the sale was made from stock of unsold finished goods. The appellant did not produce the P&L account and the balance sheet of the Roorkee unit in support of its claim that the production activities were continuing when the unit was sol....
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....s before the Assessing Officer and has contended that those sales to prove that the unit was running and was an ongoing business concern. However, learned CIT(A) has noted that a few instances of sale cannot prove that production was going on. That it is quite possible that the sale was made from stock of unsold finished goods. That the assessee did not produce the profit and loss account and the balance-sheet of the Roorkee unit in support of its claim that the production activities were continuing where the unit was sold. 7. In this regard, before us learned counsel of the assessee has pointed that in page No. 75 of the paper book before us is note forming part of the balance-sheet of the assessee-company wherein following financials of ....
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....n a continuous business. Furthermore, we note that learned counsel has produced before us valuation report giving valuation of the items sold. This is additional evidence not produced before the authorities below. We note that this additional evidence in the shape of valuation report itself states that as the assessee's unit was established in a delayed manner and it was no longer eligible for incentives available there. The valuer himself states that there are no comparative sales instances. The said report while discussing fair market rate has clearly mentioned that "we find that there was no buyer for industrial unit, not eligible for incentive." This amply casts doubt over the claim of the assessee that this was slump sale of an underta....