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TMI Blog2014 (1) TMI 87X X X X Extracts X X X X X X X X Extracts X X X X ..... m the purchaser, it would not take the goods out of slump sale -Tthe authorities were justified in holding that Section 45 of the Act is not attracted - Decided against Revenue. - I.T.A. No. 353/2007 - - - Dated:- 2-12-2013 - N Kumar And Rathnakala, JJ. For the Appellant : Sri. K V Aravind Sri. N Padmabhushan, Adv For the Respondent : Sri. Ashok A.Kulkarni, Adv. for M/s. K.R.Prasad, Adv. JUDGEMENT:- PER : N Kumar This appeal is by the Revenue challenging the order passed by the Tribunal holding that the sale consideration of a going concern cannot be subjected to tax under the capital gain. 2. The assessee company was earlier known as Nutrine Marketing P. Ltd., and was one of the Companies under the Nutrine group. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es, the assessee received on the basis of various agreements, the assessee had offered under the head long-term capital gains Rs.1 crore that is received as good will. The claim of the assessee was, the remaining Rs.22.05 crores was received in the nature of capital and hence, could not be subjected to tax. The Assessing authority did not agree with the stand of the assessee. It treated the entire consideration towards good will that the assessee has built up in the course of its existence for a period exceeding 12 years and brought the aforesaid amount to tax. However, he recorded a finding that it is a slump sale. 3. Aggrieved by the said order, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals). The Appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ended to fall within the charging section, which, in the present case, is Section 45. That section contemplates that any surplus accruing on transfer of capital assets is chargeable to tax in the previous year in which transfer took place. In this case, transfer took place on 18.7.1969. The second test which needs to be applied is the test of allocation/attribution. This test is spelt out in the judgment of this Court in Mugneeram Bangur Co. (Land Department) [1965] 57 ITR 299. This test applies to a slump transaction. The object behind this test is to find out whether the slump price was capable of being attributable to individual assets, which is also known as item-wise earmarking. The third test is that there is a conceptual difference ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion provisions together constitute an integrated code. When in a case, the computation provisions do not apply, such a case would not come within the ambit of Section 45. It is because of these pronouncements, now the law has been amended introducing Section 50B, which has come into effect from 01.04.2000. The material on record discloses that it is a case of slump sale. The said sale has taken place prior to the aforesaid amendment. As the law stood then, it was not taxable. Merely because the assessee has given split up figures of how he has claimed and received the consideration from the purchaser, it would not take the goods out of slump sale. In that view of the matter, the authorities were justified in holding that Section 45 of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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