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Issues Involved:
1. Attribution of consideration to plant and machinery. 2. Assessment of profit u/s 41(2) on the transfer of plant and machinery. 3. Right of appeal against the levy of interest u/s 215 of the Income-tax Act, 1961. Summary: Issue 1: Attribution of Consideration to Plant and Machinery The Tribunal held that a part of the consideration received by the assessee on the transfer of the business as a going concern was referable to the plant and machinery. The court analyzed the provisions of Chapter IV of the Act, particularly ss. 28 to 44D, and concluded that the sale of plant and machinery, which was part of the immovable property, was effected by a sale deed executed on August 1, 1970. The consideration represented the book value of the asset, and the excess over the written down value was Rs. 1,00,000. The court found no merit in the contention that the transaction was an exchange or that the consideration was paid by allotment of shares. Issue 2: Assessment of Profit u/s 41(2) The court examined the provisions of s. 41(2) and concluded that the profit on the sale of plant and machinery was rightly assessed. The court noted that the sale deed executed on August 1, 1970, was within the relevant previous year, and the agreement to sell executed on July 31, 1970, did not create any right in favor of the vendee in respect of immovable property. The court also rejected the contention that the transaction was for a slump price, distinguishing the facts from the case of CIT v. Mugneeram Bangur & Co. [1965] 57 ITR 299 (SC). Issue 3: Right of Appeal Against Levy of Interest u/s 215 Question No. 3 was covered by the decision of a Full Bench of the court in CIT v. Geeta Ram Kali Ram [1980] 121 ITR 708, where it was held that the assessee had no right of appeal against the levy of interest u/s 215 of the I.T. Act, 1961. Conclusion: The court answered all three questions in the affirmative, in favor of the Revenue and against the assessee. The Revenue was entitled to costs assessed at Rs. 250.
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