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TMI Blog2017 (6) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... esh taking into the account the revised computations and submissions of the assessee. Needless to add the assessee shall be granted adequate opportunity of being - Appeal by the assessee stands allowed for statistical purposes. - ITA no.2425/Mum./2013 - - - Dated:- 1-6-2017 - SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER, AND SHRI PAWAN SINGH, JUDICIAL MEMBER For The Assessee : Shri. Jayesh Dedia For The Revenue : Shri. Kailash Kanojiya ORDER PER: SHAMIM YAHYA This appeal by the revenue is directed against order of Ld. CIT-A dated 21.12.2012 and pertains to assessment year 2009-10. 2. The grounds of appeal read as under: 1. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above), the appellant is engaged in the business of running restaurants. During the year under consideration, the appellant has sold its restaurant business to PAN India Food Solutions Pvt. Ltd. for a lump-sum consideration of ₹ 10,00,00,000/-. The sale, as stated is a lump-sum sale within the meaning of Section 2(42C) of the Income Tax Act as all the assets and liabilities relating to the restaurant business have been transferred to PAN India Food Solutions Pvt. Ltd. Since it was a slump sale agreement, for a lump-sum consideration, the appellant computed its tax liability i.e. Long Term Capital Gain in accordance with the provisions of Section 50B of the Act. 4. Upon assessee s appeal Ld. CIT-A held as under:- From the abov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the basis of full sale value or net sale value (i.e. after deducting the assessee's liability to the Excise Department). Thus the facts in the case of Attili N. Rao (supra) are also different from the facts in the case of the appellant. Hence, it is also evident that the issue referred to the Special Bench is of no relevance in the case of the appellant. Section 50B mentions that the net worth of the undertaking on the date of transfer is the cost for the purpose of calculating capital gain under section 48. The net worth has been determined by the Auditors at (-) ₹ 10,00,54,507/-. And for the purpose of Section50B of the Act, the cost cannot be a negative figure and it has to be taken as nil. The negative net worth of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted the capital gain at ₹ 10 crores i.e. the full value of consideration received under the slump sale agreement. The AO's view that transfer of excess liabilities over assets is required to be considered as deemed sale consideration may hold good, if there is actual transfer of excess liabilities over the assets. In the present case, this is not so. Hence, in the light of above discussion, I am inclined to agree with the appellant's contention that the negative net worth should be ignored while computing the long-term capital gain under on 48 read with 50B of the Income Tax Act Accordingly, the AO is directed not to consider the negative net worth as sale consideration and delete the addition of ₹ 10,00,54,507/- m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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