TaxTMI 
TaxTMI 
2026 (9) TMI 1686
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.... herein this order would mean Income Tax Act, 1961. 2. The Revenue has raised following grounds of appeal:- "1. Whether the Ld. CIT(A), NFAC erred in law and on facts in deleting the addition of Rs. 40000000/- made by the Assessing Officer on account of capital gain on slump sales, despite the fact that there was no loss on slump sales as liabilities were more than the assets in the slump sale deal." 3. The only issue arising from the appeal of the Revenue is regarding the deletion of the addition of Rs. 4 Crores by the Ld. CIT(A). Brief facts of the case as culled out from the order of lower authorities is that the appellant namely Savista Global Solutions Private Limited is private limited company, primarily engaged in the ....
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....w the long-term capital loss of INR 2,03,24,979. In appeal, the ld. CIT(A) considered arguments taken by the assessee and proceeded to delete the impugned addition of Rs. 4 Crores by observing as under:- "...On the basis of the valuation determined by the independent valuer, the Appellant adopted the FMV of the undertaking at Rs. 4,00,00,000/- in accordance with Rule 11UAE and computed the net worth at Rs. 6,03,24,979/- as required u/s. 50B. Relying on this statutory computation, the Appellant declared a long-term capital loss of Rs. 2,03,24,979/- (i.e. full value of consideration of Rs. 4,00,00,000/- minus net worth of Rs. 6,03,24,979/-) in its returns of income. However, disregarding the valuation report and the statutory mechani....
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....purpose of slump sale taxation. The AO has not demonstrated any defect in the valuation methodology nor shown that the valuation is contrary to Rule 11UAE or that Form 3CEA is incorrect. In the absence of such findings, the AO has no authority to recompute net worth by making unprescribed and extraneous adjustments. Further, the AO's re-computation of net worth at NIL was never proposed in the show-cause notice, violating principles of natural justice as well as CBDT Instruction No.20/2015, which mandates that additions must be preceded by a clear and specific SCN. On this procedural lapse alone, the addition is liable to be deleted. Accordingly, Ground No.2 is allowed...." 4. During the course of present hearing, the ld. DR....
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....ct in the assessee's valuation report or to allude that the said valuation is contrary to prescribed procedure given in Rule-11UAE. The ld. Counsel placed reliance upon the decision of Hon'ble Apex Court in the case of Dr. Mrs. Renuka Datla 135 taxmann 200 (SC) holding that violation reports coming from experts need not ordinarily be interfered with. Further, it was stated that in the case of Miheer H Mafatlal AIR 1997 SC 506, it was held that valuation of shares is a technical and complex issue and should be left to be experts in the field of accountancy. Similar view taken by this Tribunal in the case of Weldone Polymers Pvt. Ltd. 163 taxmann.com 773 and of Hon'ble Jodhpur Tribunal in the case of Manjula Singhal 10 taxmann.com 45 was also....
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.... that any profits or gains arising from the transfer under the slump sale of any capital asset being one or more undertakings owned and held by an assessee for not more than thirty-six months immediately preceding the date of its transfer shall be deemed to be the capital gains arising from the transfer of short-term capital assets. (2) In relation to capital assets being an undertaking or division transferred by way of such slump sale,- (i) the "net worth" of the undertaking or the division, as the case may be, shall be deemed to be the cost of acquisition and the cost of improvement for the purposes of sections 48 and 49 and no regard shall be given to the provisions contained in the second proviso to section 48; (ii) ....
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....tal asset being goodwill of a business or profession, which has not been acquired by the assessee by purchase from a previous owner, nil; (b) in the case of capital assets in respect of which the whole of the expenditure has been allowed or is allowable as a deduction under section 35AD, nil; and (c) in the case of other assets, the book value of such assets. 7. We have further noted that section 50B(3) provides that in cases of slump sale, the assessee shall furnish a report of an accountant read with provisions of Rule-11UAE of Income Tax Rules. Thus, we have noted that the law provides specified guidelines to be followed by a tax payer fall in within the purview of section 50B of the Act. The Revenue has not contested appl....