TaxTMI 
TaxTMI 
2023 (4) TMI 1480
X X X X Extracts X X X X
X X X X Extracts X X X X
....ether on points of law and on facts & circumstances of the case, the Ld. CIT(A) has erred in ignoring the ratio of the decision of the Hon'ble Supreme Court in the case of CIT Vs Artex Manufacturing Co. [227 ITR 260(SC)] wherein it has been held that the possibility of identification of price attributable to individual items (plant, machinery and dead stock) which are sold as part of slump sale, may not entitle a transaction to be qualified as slump sale?" 3. "Whether on points of law and on facts & circumstances of the case, the Ld. CIT(A) has erred in giving a finding that sale of property made by the assessee was a slump-sale without verifying the primary condition for slump-sale?" 4."Whether on points of law and on facts & circumstances of the case, the Ld. CIT(A) was justified in accepting the fresh evidence produced by the assessee, if any, without allowing the AO, proper opportunity to examine the same, thereby violating the provision on law under Rule 46A of I T Rules .? " 5."Whether on points of law and on facts & circumstances of the case, the Ld. CIT(A) has erred by giving a finding which is contrary to the evidence on record, as the Id CIT....
X X X X Extracts X X X X
X X X X Extracts X X X X
....income of Rs. 52,42,470/-. Subsequently, the case of the assessee was selected for scrutiny assessment u/s.143(2) of the Act. 3. During the course of assessment proceedings, it was observed by the A.O that the assessee company which in the immediately preceding year had derived income from business of extraction of crude and refined oil had not carried out any substantial activity during the year under consideration. On a perusal of the return of income, it was observed by the A.O that the assessee had disclosed Long Term Capital Gain (LTCG) u/s. 50B of the Act of Rs. 52,28,430/- on slump sale of its industrial undertaking for a sale consideration of Rs. 1,00,00,020/- to Utsav Organic & Cold Chain. The A.O on the basis of AIR information that was downloaded by him from the system observed that the assessee company had sold its plant and factory including land for a consideration of Rs. 4,37,63,295/-, as under: Transaction amount Transaction Date Rs. 37636100 10.12.2012 Rs. 6127200 10.12.2012 Rs. 43763300 Total It was, however, observed by the A.O that the assessee company in its return of income for the purpose of computing LTCG on the aforesaid sale t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Rs.1 crore (approx.) was duly evidenced as per the registered sale deeds. It was observed by the CIT(Appeals) that as per Section 50B of the Act the capital gain on slump sale of industrial unit was to be worked out by reducing from the sale price the amount of cost of acquisition i.e. net worth of the undertaking at the time of sale. Referring to the definition of slump sale, it was observed by the CIT(Appeals) that the same was provided in sub-section (2) of Section 42C of the Act, as per which, it was to be construed as a transfer of one or more undertaking for a lumpsum consideration without values being assigned to the individual assets and liabilities in such sale. The CIT(Appeals) further referring to the "Explanation 2" to Section 2(42C) of the Act, observed, that it was therein clarified that the determination of the value of an asset or liability for the sole purpose of payment of stamp duty, registration fees or other similar taxes or fees shall not be regarded as assignment of values to individual assets or liabilities. In sum and substance, it was observed by the CIT(Appeals) that as per clearly worded "Explanation 2" (supra) the provisions of Section 50C would not be ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....h, the A.O while framing of the assessment had called for the requisite details on the basis of which the property under consideration was valued by the stamp valuation authority, which as culled out by us hereinabove revealed that the same was valued at Rs.4,37,63,295/-, but, the same as observed by the CIT(Appeals), and rightly so, will have no bearing on the quantification of the capital gain arising from the slump sale transaction under consideration. We, say so, for the reason that "Explanation 2" of Section 2(42C) of the Act contemplates that the determination of the value of an asset or liability for the sole purpose of payment of stamp duty, registration fees or other similar taxes or fees shall not be regarded as assignment of values to individual assets or liabilities. For the sake of clarity, Section 2(42C) of the Act is culled out, as under: "(42C) "slump sale" means the transfer of one or more undertakings as a result of the sale for a lump sum consideration without values being assigned to the individual assets and liabilities in such sales. Explanation 1 .- For the purposes of this clause, "undertaking" shall have the meaning assigned to it in Expla....
X X X X Extracts X X X X
X X X X Extracts X X X X
....c along with Factory, Land, Building and Current Assets. As per 3CEA report the value of same was of Rs. 1,17,964. Break up of which is as under; PAYABE TO A/C HEAD AMOUNT Atul Industries Sundry Creditors 68,563.00 Nitesh Sha Salary Payable 48,000.00 Guru Ramdas Hardware Sundry Creditors 1,401.00 TOTAL 1,17,964.00 Considering the aforesaid facts, we are of the considered view that no infirmity emerges from the working of the capital gain by the assessee company within the meaning of Section 50B r.w.s 2(42C) of the Act, viz. adoption of the actual sale consideration received as per the registered sale deed: Rs.1,00,00,020/-; and (ii) determination of "net worth" of the undertaking as per sub-section (2) of Section 50B of the Act as worked out by the chartered accountant in "Form 3CEA" r.w. Rule 6H of the Income Tax Rules, 1962 : Rs. 45,71,590/-. 9. At this stage, we may herein observe that though as per the amendment made available on the statute vide the Finance Act, 2021 w.e.f. 01.04.2021, the Fair Market Value (FMV) of the capital asset as on the date of transfer calculated in a manner prescribed in Section 11UAE, shall....
X X X X Extracts X X X X
X X X X Extracts X X X X
....AR, and, rightly so, the adoption of market value of the specific assets or liabilities was not permissible for computing the capital gain on slump sale of the undertaking of the assessee company prior to the amendment that had been made available on the statute vide the Finance Act, 2021 w.e.f. 01.04.2021. Thus, we concur with the view taken by the CIT(Appeals) that the deeming provision of Section 50C of the Act were not applicable to the slump sale transaction in the case of the assessee company before us. 13. We shall now deal with the claim of the department that the CIT(Appeals) had erred in ignoring the judgment of the Hon'ble Supreme Court in the case of CIT Vs. Artex Manufacturing Co. (1997) 227 ITR 260 (SC) wherein, it was held that the possibility of identification of price attributable to the individual items (plant, machinery and dead stock) which are sold as part of slump sale, may not entitle a transaction to be qualified as slump sale. Before proceeding any further, we may herein observe that the aforesaid judgment of the Hon'ble Supreme Court in the case of Artex Manufacturing Co. (supra) dated 08.07.1997 pertaining to A.Y. 1967-68 was rendered in contex....
X X X X Extracts X X X X
X X X X Extracts X X X X
....¤ªà¤¤à¥à¤¤à¤¿ वारà¥à¤¡ नं 11 मिनीमाता वारà¥à¤¡ के कणà¥à¤¡à¤¿à¤•à¤¾ 2 मोहन ढाबा से सिनà¥à¤§ तालाब के मà¥à¤–à¥à¤¯ मारà¥à¤— पर सà¥à¤¥à¤¿à¤¤ है । 1. विकà¥à¤°à¤¯ विलेख 63,04,200/-रू का मूलà¥à¤¯à¤¾à¤‚कन 1. वà¥à¤¯à¤ªà¤µà¤°à¥à¤¤à¤¿à¤¤ à¤à¥‚मि रकबा 108900वरà¥à¤—फà¥à¤Ÿ अरà¥à¤¥à¤¾à¤¤ 10120.82 वरà¥à¤—मीटर दर 3240/-रू पà¥à¤°à¤¤à¤¿à¤µà¤°à¥à¤— मीटर है । 1. पà¥à¤²à¤¾à¤Ÿ 100%= 4048 व0मी0 X 3240 =1,31,15,520/रू0 2. पà¥à¤²à¤....
X X X X Extracts X X X X
X X X X Extracts X X X X
....us, the total sales consideration is Rs. 4,37,63,295/- Document 2विकà¥à¤°à¤¯à¤•à¥ƒà¤¤ समà¥à¤ªà¤¤à¥à¤¤à¤¿ का पूरà¥à¤£ विवरण : गà¥à¤°à¤¾à¤® उरला, प.ह. नं. 23, मिनीमाता वॉरà¥à¤¡ कà¥à¤°à¤®à¤¾à¤‚क-11, रा.नि.म., विकासखणà¥à¤¡ वो तहसील अà¤à¤¨à¤ªà¥à¤°, जिला रायपà¥à¤° (छतà¥à¤¤à¥€à¤¸à¤—ढ़) में मोहन ढाबा से सिनà¥à¤¹à¤¾ तालाब तक जाने वाले मारà¥à¤— से आधा किलोमीटर पशà¥à¤šà¤¾à¤¤ सà¥à¤¥à¤¿à¤¤ à¤à¥‚....