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TMI Blog2019 (8) TMI 145X X X X Extracts X X X X X X X X Extracts X X X X ..... able so as to ascertain computation of capital gain in this case. No infirmity in the order of the CIT(A) and the same is confirmed. This ground of appeal of the assessee is dismissed. - I.T.A. No. 110/Coch/2018 - - - Dated:- 10-4-2019 - SHRI CHANDRA POOJARI, AM AND GEORGE GEORGE K., JM For The Assessee : Shri R. Srinivasan, CA For The Revenue : Smt. A. S. Bindhu, Sr. DR ORDER Per CHANDRA POOJARI, AM: This appeal filed by the assessee is directed against the order of the CIT(A), Kottayam dated 26/02/2018 and pertain to the assessment year 2003-04. 2. The assessee has raised the following grounds of appeal: 1) The Officers below were not justified in re-opening the assessment. 2) The Officers below did not appreciate the fact that the assessee had sold depreciable asset, so much so under the block system, this sale value would go to reduce the WDV of the particular block of assets. 3) At any rate the provisions of section 50(2) of the Act (Slump Sale) would not be applicable. 4) The Officers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the sea food business undertaking was transferred as a going concern on slump sale basis and therefore, the profits on account of such transfer have to be computed as per the provisions of section 50B of the Act. Accordingly, the CIT(A) confirmed the assessment of profits on sale of the sea food business as long term capital gain u/s. 50B of the Act. 6. Against this, the assessee is in appeal before us. The Ld. AR submitted that what has been sold represented depreciable assets which has to be treated as business receipts only. The Ld. AR submitted that in respect of 4 blocks of assets, column no 6 shows the value of the asset sold in each head which in total comes to ₹ 3,45,06,766.68 and even after this sale there is balance value of assets in each block. It was submitted that depreciation was computed under the block system after deducting sale value of assets disposed from the value of the assets as at the opening balance and the addition thereafter on the balance value as per column 7. According to the Ld. AR, under the Act for computing depreciation, it will not lead to capital gain. The Ld. AR submitted that the assessee had correctly deducted sale va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and liabilities of an undertaking are sold as a group or lumped together, such a would qualify as a slump sale. In the light of the above, we have carefully gone through the material on record and we have carefully gone through the agreement entered into by the parties on 28th March 2003, which reads as under: DEED OF CONFIRMATION FOR SALE AND ASSIGNMENT OF SEAFOOD BUSINESS UNDERTAKING: THIS DEED made at Cochin the 28th day of March 2003, entered into by and between: AMALGAM FOODS LIMITED, a company registered under the Companies Act, 1956, and having its registered office at Kuthiathode, Thuravoor P.O,, Alleppey District, Kerala hereinafter called TRANSFEROR ( which expression shall, unless repugnant to the meaning or context thereof, be deemed to include its successors and assigns) of the First Part) AND HINDUSTAN LEVER LIMITED, a company incorporated under the Indian Companies Act, 1913, and having its registered office at 165/166, Backbay Reclamation, Mumbai-400 020, hereinafter called TRANSFEREE (which expression shall, unless repugnant t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the TRANSFEREE forever free and clear of all Encumbrance together with all deeds, documents, writings vouchers and other evidences of the TRANSFEROR'S title exclusively relating to the Undertaking and every part thereof. 8.1 By this agreement, the assessee sold sea food business undertaking for a lumpsum consideration as a going concern. On consideration of various stipulations and provisions stated in the agreement, it is clear that the intention of the parties was to sell the entire sea food business undertaking for a lumpsum consideration which is is nothing but slump purchase price 8.2 As per clause 2.2, the dale and purchase of the undertaking shall specifically exclude the following assets and liabilities: ( a) the Excluded Assets; ( b) all obligations, liabilities and duties of the TRANSFEROR in respect of the Undertaking relating to the period prior to and up to the Closing Date not expressly assumed by the TRANSFEREE under this Deed including without limitation; ( i) the Taxation Liabilities; ( ii) the Severance Liabilities, being any li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... possession and control of them and to assist the TRANSFEREE in exercising all rights in respect of the same. 2.7 Co-operation: Prior to and up to the Closing Date and thereafter, the TRANSFEROR shall provide reasonable co-operation to the TRANSFEREE for obtaining at the TRANSFEREE'S cost, all Permits and Environmental Permits, power / water connections, consents, permissions or other authorizations from any Governmental, municipal or local authority that the TRANSFEREE may require (including provision of no-objection/consent letters from the TRANSFEROR and / or execution of any application forms etc.) to conduct and carry on the manufacturing and processing operations at the Undertaking without any let or hindrance. 8.4 It is clear from the reading of the above clauses of the sale deed that the assets of the assessee including goodwill, intellectual property rights, trademark were sold for a lumpsum consideration. The terms of agreement are very specific and clear and there is no need for importing any other meaning. Since the assets and liabilities of the sea food business undertaking were sold by the agreement cited supra, the sale will con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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