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TMI Blog2016 (5) TMI 1262X X X X Extracts X X X X X X X X Extracts X X X X ..... & C. O. No. 27/Kol /2013 - - - Dated:- 27-5-2016 - Shri Waseem Ahmed, Accountant Member And Shri S. S. Viswanethra Ravi, Judicial Member For the Assessee : Shri S. K. Tulsiyan, Advocate For the Respondent : Shri Sudipta Guha, JCIT, SR-DR ORDER Per Waseem Ahmed, Accountant Member This appeal by the Revenue and Cross Objection (CO) are arising out of order of Commissioner of Income Tax (Appeals)-VIII, Kolkata in appeal No. 259/CIT(A)-VIII/Kol/11-12 dated 12.10.2012. Assessment was framed by DCIT,Circle-7, Kolkata u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the Act ) vide his order dated 30.12.2011 for assessment year 2009-10. Shri Ravi Tulsiyan, Ld. Authorized Representative appearing on behalf of assessee and Shri Rajat Kumar Kureel, Ld. Departmental Representative appearing on behalf of Revenue. First we take up Revenue s appeal 2. Common ground raised by Revenue is that Ld. CIT(A) erred in deleting the addition made by Assessing Officer u/s.50B of the Act by holding the tea estate as slump sale. 3. Facts in brief are that assessee in the present case is a partnership firm and owns two tea estate namely Suboang Hattic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e memorandum of sale dated 11.08.2008 the appellant has transferred the following assets of his two tea estate to Prithvi Tea Company P ltd for Rs.3,58,66,118/-:- Land Plantation Rs.2,83,00,000/- Factory Building ₹ 27,00,000/- Plant Machineries ₹ 48,66,118/- Total Rs.3,58,66,118/- The item wise detail of assets transfer is given in 1st 2nd Schedule of the memorandum of sale. The appellant has also transferred the liabilities mentioned in the memorandum of sale and accodingly0 the net consideration was arrived at ₹ 2,83,00,000/-. The appellant has not transferred all the assets of the Tea Estate (undertaking) but has retained some of the assets mentioned in clause 1 and 2.1 of the memorandum. (ii) That section 2(42C) of the Act define slump sale as under:- (42C) slump sale means the transfer of one or more undertakings as a result of the sale for lump sum consideration without values being assigned to the individ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... buyer so the provision of Sec.50B of the Act is not applicable to the instant case. On rejoinder Ld. DR stated that memorandum of sale was not produced before AO at the time of framing assessment. Contrary to that Ld. AR submitted that same was made available to AO at the time of remand report and he relied on the order of Ld. CIT(A). 5. We have heard rival contentions and perused the materials available on record. We find that assessee has sold two tea estates as going concern but after assigning the value to the individual asset and without transferring all the liabilities. AO treated the aforesaid transaction as lump sum sale and made addition to the total income of assessee. Now the question before us arose is as to whether the instant transaction amounts to slump sale or not. We find that similar issue was also decided by this Tribunal in ITA No.1233/Kol/2008 dated 06.11.2015 in the case of DCIT v. M/s Tongani Tea Co. Ltd. wherein Tribunal has decided the issue in favour of assessee and against the Revenue and relevant extract is reproduced below:- 17. In view of the above facts and circumstances of the case, we find that Section 50B of the Act provides that any profi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsideration for the extent of land had been specifically mentioned. Thereafter, the assessee had listed out every item of, movable property transferred to the buyer and value had been assigned to those movable assets. The assessee had not transferred the estate with all the assets and liabilities. All the financial assets available to the assessee up to the date of the transaction were not transferred as per the agreement but had been retained by the assessee. The assessee had assumed all the liabilities including the statutory liabilities till the date of transfer. Therefore, it could not be said that the transfer was a slump sale only for the reason that the rubber estate was transferred to the buyer as a 'going concern. 19. Even though the expression going concern is a functional qualification as far as the estate is concerned, the said functional qualification was not sufficient enough to decide the exact legal character of the transaction, for the purpose of income-tax assessment. Even though, the workers on the rolls of the assessee had also been absorbed by the buyers along with the estate but that did not change the character of the transaction. It was not easy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee had been listed out in different Schedules and Annexures. The consideration had been specifically assigned to the sale of immovable property by way of Tea estate. Separate consideration had been assigned to the sale of movable properties including vehicles and properties. Therefore, it was not a case of slump sale for a lump sum amount of consideration. Further, as all the assets and liabilities had not been sold as per the agreement, this was not a slump sale as construed in section SOB of the Act. Accordingly, in view of the above facts of the case and position of law discussed in various case laws of different Hon 'ble Courts, we are of the view that sale of Nagrijuli Tea Estate was not a slump sale within the meaning of sec. 2(42C) of the Act read with section SOB of the Act and, therefore, not even assessable to capital gains. Accordingly, we uphold the order of CIT(A) and this issue of revenue's appeal is dismissed. Ld. AR further submitted that tea estates comprising of land which is agricultural land within the provision of 2(14) of the Act. Therefore the same cannot be taxed under the provision of the Act. In rejoinder, Ld. DR submitted that the land ..... X X X X Extracts X X X X X X X X Extracts X X X X
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