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TMI Blog2017 (5) TMI 539X X X X Extracts X X X X X X X X Extracts X X X X ..... sold by the assessee was activity of manufacturing elevators. Therefore, as such it cannot be said that the assessee did not disclose true and correct facts necessary for the assessment. It is required to be noted that even the issue as to whether the transaction can be said to be sale of goodwill and/or trademark also came to be considered in detail by the A.O. and only thereafter the transaction in question was considered on slump sale basis. - Decided in favour of assessee. - Special Civil Application No. 12468 of 2014 - - - Dated:- 13-4-2017 - M. R. Shah And B. N. Karia, JJ. Mr Mihir Joshi, Senior Advocate with Mr Parth Contractor, Advocate for the Petitioner Mr Manish Bhatt, Senior Advocate with Mrs Mauna M Bhatt, Advocate for the Respondent JUDGMENT ( Per : Honourable Mr. Justice M. R. Shah ) 1.00. By way of this petition under Article 226 of the Constitution of India, the petitioner has prayed for appropriate writ, order and/or direction to quash and set aside the impugned notice under section 148 of the Income Tax Act, 1961, by which the A.O. has sought to reopen the assessment for A.Y. 2007-08 on the ground that the income chargeable to tax has es ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... details qua stock hypothetical, details related to Slump Sale, etc. 2.05. That thereafter a further hearing came to be scheduled on 16/9/2009 during which the assessee submitted further details including copy of the Slump Sales Agreement, details of the payment received under the Slump Sales working of Slump Sale etc. 2.06. That thereafter on 5/10/2009 the assessee was in receipt of an intimation issued under section 143(1) of the Act for A.Y. 2007-08 which intimation did not take into account corrected Income Tax Return uploaded by the petitioner on 23/10/2007, Therefore, the petitioner vide letter dated 6/10/2009 requested the A.O. to make note of the corrections and duly corrected return of income. 2.07. That thereafter further hearing in relation to the aforesaid assessment proceedings for A.Y. 2007-08 took place before the A.O. and the petitioner during the course of the said hearing submitted detailed explanation qua issue of Slump Sales vide letters dated 13/10/2009, 4/12/2009 and 7/12/2009. Thereafter, after several hearings, and on considering detailed scrutiny of documents including balancesheet, P L Account of the petitioner, other details qua Slump Sale, A.O. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 6,42,70,302/- and profit arising on such transfer should have been taxed as Short Term Capital Gain instead of Long Term Capital Gain. 2.15. That thereafter the petitioner assessee filed detailed objections against reopening vide objections dated 26/6/2014. That the objections raised by the petitioner assessee has been disposed of by the A.O. vide order dated 15/7/2014. Hence, the petitioner has preferred the present Special Civil Application under Article 226 of the Constitution of India. 3.00. Mr.Mihir Joshi, learned Senior Advocate has appeared with Mr.Parth Contractor, learned advocate appearing on behalf of the petitioner - assessee and Mr.M.R. Bhatt, learned Senior Advocate has appeared on behalf of the respondent - revenue. 4.01. Mr.Mihir Joshi, learned Senior Advocate appearing on behalf of the petitioner has vehemently submitted that as such the impugned reopening and the impugned notice under section 148 of the Act to reopen the assessment for A.Y. 2007-08 beyond the period of 6 years from the date of relevant assessment year is absolutely bad in law, illegal and against the provisions of section 147 of the Act. 4.02. Mr.Mihir Joshi, learned Senior Adv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g is not permissible. 4.07. Mr.Mihir Joshi, learned Senior Advocate appearing on behalf of the petitioner has further submitted that as such in the present case there is no suppression on the part of the assessee in not disclosing true and correct facts. It is submitted that after the detailed scrutiny, the transaction came to be explained by the A.O. as slump sale, more particularly after considering the material on record. It is submitted that therefore, assumption of jurisdiction to reopen the assessment beyond the period of 4 years (in the present case after 6 years) is absolutely illegal and contrary to section 147 of the Act. Making above submissions and relying upon the decision of the Division Bench of this Court in the case of Sandeepkumar Mithulal Mehta Versus Income Tax officer, rendered in Special Civil Application No. 20754 of 2016 and another decision of the Division Bench of this Court in the case of Sopan Infrastructure (P) Ltd. Versus Income Tax office, Ward 8(2) reported in (2017) 78 taxmann.com 170 (Gujarat), it is requested to allow the present petition. 5.00. Present petition is vehemently opposed by Mr.M.R. Bhatt, learned counsel appearing on behalf o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after waiting for sufficient time, A.O. issued notice under section 142(1) of the Act and proceeded further with the reassessment proceedings. It is submitted that only thereafter the petitioner raised objections against reopening vide communication dated 26/6/2014 and for the first time stated that return submitted along with the communication dated 29/4/2014, be treated as return of the assessee pursuant to the notice under section 142(1) of the Act. It is submitted that by that time notice under section 142(1) was already issued. It is submitted that therefore, it is not open for the petitioner to make a grievance that the petitioner was not furnished reasons recorded to reopen the assessment for the A.Y. 2007-08. 5.04. Mr.Bhatt, learned counsel appearing on behalf of the revenue has further submitted that as such the A.O. at the relevant time accepted the claim of the assessee as it is i.e. accepted the claim that what was sold by the petitioner assessee was slump sale and therefore, at the relevant time there was no occasion to consider whether the transaction was outright sale of business including transfer of goodwill and trademark. It is submitted that in the present cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... z. M/s. Alps Technologies Pvt. Ltd. was running the business of making and selling elevators. They did not have a separate marketing division earmarked. The assets of the entire concern were in a single composite entity. The entire business was not sold but it had been claimed that only marketing division was sold on a slump sale basis. The records do not show that any separate marketing division existed in the Company. When the entire business was not sold, only the marketing division could not be sold as a separate business entity. In fact, the entire story about sale of marketing division has been fabricated only to reduce the instance of taxation which M/s. Alps Technologies would have suffered on sale of Trade mark which would have been otherwise fully taxed @ 30% as business income / short term capital gain. It is also seen that the assets transferred on execution of the sale agreement as reported by M/s. Trio Elevators Co. (India) Ltd are the only worthwhile asset other than advances received and transferred in this case is Trade Mark and IP assets valued at ₹ 2,00,00,000/- and goodwill valued at ₹ 6,24,70,302. Thus, it is clear that case of transfer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... details qua stock hypothetical, details related to Slump Sale, copy of the Slump Sale Agreement, details of the payment received under the Slum Sale and documents relating to Slum Sale, etc. and during the course of hearing the assessee also submitted detailed explanation with respect to slump sale and only thereafter the A.O. upheld the fact that the transaction was in fact a slump sale transaction. 6.03. From the material on record it appears that in the communication dated 13/10/2009 the assessee disclosed as under :- 1. The Business of MARKETING SERVICING OF ELEVATORS under the TRIO brand was sold on Slump Sale basis on the 07th September, 2006 by Alps Technologies Pvt. Ltd. to Trio Elevators Co. (I) Ltd. Alps Technologies Pvt. Ltd was left with the activity of manufacturing the Elevators. Alps was required to sale its production to TRIO ELEVATORS CO (I) LTD as per the SSUPPLY AGGREMEN entered between the parties on 07th Sept. 2006. A copy said Agreement is attached herewith. 6.04. Therefore, it was specifically declared by the assessee that what was sold by the assessee was activity of manufacturing elevators. Therefore, as such it cannot be said that t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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