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TMI Blog2011 (1) TMI 1115X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee to get the licence or whether it is an estimated amount fixed between the parties. In any case, the eligibility for a petroleum dealership licence itself is availability of all the infrastructural facilities and equipments and experience. Therefore, it is for the Assessing Officer to examine, after giving opportunity to the assessee as to whether what exactly is the consideration i.e. attributable for transfer of the business rights as an intangibel asset including licence. - ITA.No. 195 of 2010 - - - Dated:- 10-1-2011 - MR. Justice C.N.RAMACHANDRAN NAIR, MR. Justice B.P.RAY, JJ. For Appellant :SRI.JOSE JOSEPH, SC, FOR INCOME TAX For Respondent :SRI.P.BALAKRISHNAN (E) J U D G M E N T Ramachandran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer bifurcated the sale consideration of Rs.82 lakhs between the value of land and building and the value of the dealership licence separately and assessed entire receipts towards capital gains. When the assessee filed appeal challenging the assessment on capital gains on the sale of the petroleum outlet, the first appellate authority held that the transaction is really sale of business which attracts tax on capital gains only by virtue of the later introduced amendment in Section 55(2) of the Act, by Finance Act, 2002 with effect from 01/04/2003. Since the sale in this case by way of execution of agreement, transfer of possession and receipt of consideration happened prior to the amendment in Section 55(2), the CIT (Appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ale falling under Section 2(42C) of the Act assessable under Section 50B of the Act which came into force with effect from 01/04/2000. Similarly, Section 55(2) of the Act defining "cost of acquisition" on the sale of right to carry on business was introduced by Finance Act, 2002 with effect from 01/04/2003. Since these provisions providing for levy of tax on capital gains on slump sale and on sale of right to carry on business were introduced in the Act after the relevant period during which the respondent sold the business as a going concern, certainly these provisions have no application and assessment could not be made under these provisions subsequently introduced in the statute. However, the question raised for our decision is whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elied on the decision of the Supreme Court in Commissioner of Income Tax v. B.C.Sreenivasa Setty, reported in 128 ITR 294, and contended that prior to the introduction of the new definition on cost of acquisition for assessing transfer of right to carry on business in Section 55(2) with effect from 01/04/2003, this position is covered by the decision of the Supreme Court above referred, and so much so, the CIT (Appeals) and the Tribunal rightly held that the consideration received for sale of business as a whole cannot be assessed to tax. 5. After hearing both sides and after going through the records and the orders of the lower authorities, we feel that the order of the CIT (Appeals), which is confirmed by the Tribunal, cannot be susta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... land and building and business assets and service installations like electricity and telephone connections attract tax on sale of capital assets for periods prior to the amendment to Section 55(2), which only introduces the new definition for "cost of acquisition" in respect of right to carry on business. In this context, we have to refer the relevant provisions of the Act, which in Section 2(14) defines "capital assets" as follows :- "S.2(14) : "capital asset" means property of any kind held by an assessee, whether or not connected with his business or profession, but does not include- (i) any stock-in-trade, consumable stores or raw materials held for the purposes of his business or profession; ----- -----" What is clear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for assessment. We are unable to accept this contention because Section 50B was introduced to provide for special provisions for assessment in the case of slump sale, which is nothing but sale of an industrial unit or a business enterprises as a whole without bifurcating consideration on each and every item. The fact that special provision was introduced for assessment of capital gains on slump sale with effect from a particular date does not mean that the sale of assets including depreciable assets for the period prior to introduction of the provision for assessment of capital gains on slump sale cannot be assessed under other provisions of the Act. So much so, in our view, so long as items sold answer the description of "capital asset" w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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