9911796707
TMI Blog2024 (8) TMI 551X X X X Extracts X X X X X X X X Extracts X X X X ..... issioner of Income Tax (Appeals) 1, Nagpur, [ learned CIT(A) ], for the assessment year 2006 07. 2. When the case was called for hearing, neither the assessee respondent nor any of its authorised representatives appeared before us to assist the Bench and argue the matter. There is no application for adjournment either. However, the Bench was of the opinion to dispose off the matter in the absence of the assessee respondent after hearing the learned Departmental Representative and on the basis of material available on record. 3. In its appeal, the Revenue has raised following grounds: (i) Whether on the facts and circumstances of the case, the CIT (A) was right in holding that AO was not justified in assessing the income at Rs. 3,28,18,270/- by treating long term capital gain u/s. 50B of the IT Act at Rs. 3,94,44,635/- on sale of assets without appreciating that the Assessing Officer has computed the capital gains treating the sale as 'slump sale' after verifying the factual matrix and the computation thereunder was based following the decision of Hon'ble ITAT's Special Bench, Mumbai in the case of DCIT vs. Summit Securities Ltd. Reported in (2012) 135 ITD 99. (ii) W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ingly, the Assessing Officer, while giving effect to the order passed by the Tribunal, issued notices to the assessee, which have been reproduced in the assessment order vide Para 2, Page 2 to 5, asking the assessee to justify its contention of slump sale under section 50 of the Act, as against capital gains and applicability of section 50C of the Act thereto. The assessee filed reply before Assessing Officer, which is reproduced in the assessment order vide Para 3.1 / Page 5 to 8, explaining the circumstances for the impugned sale and stated that the provisions of section 50A and not 50C of the Act are applicable in its case. The Assessing Officer has worked out long term capital gain at ₹ 3,94,44,635, under section 50B of the Act treating the sale as slump sale. Accordingly, the Assessing Officer assessed the income of the assessee at ₹ 3,26,18,270, as against the income assessed originally at ₹ 3,44,36,161. The assessee once again being aggrieved by the order so passed by the learned CIT(A), is in appeal before the learned CIT(A). 7. The learned CIT(A) allowed the claim of the assessee by observing as follows: 4. Appellant's submissions along with assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fected by appellant of land, building and machinery, appellant did not sell the whole business as is clear from the sale deed and appellant's own submission before A.O. making more clear as mentioned in AO's order that appellant claimed before A.O. that: I. It is sale of land building and machinery. II. Specific value to each item was assigned and given as Anne. I to Audit report. III. Some assets are retained by the appellant. IV. All liabilities are borne by the appellant as is clear from conveyance deed. V. Appellant company is still existing and is filing return of income as separate entity. Now appellant is arguing just opposite of what was stated before A.O. and above mentioned facts by appellant before A. . do not support the revised claims of the appellant before appeal proceedings that it is a slump sale. One more word of caution here is that now in appeal, appellant has furnished the CA's certificate purportedly u/s 508 sub section (3). a) firstly it is undated (probably just to pass it as if net worth was derived at the time of assessment. b) secondly it says that it is calculating net worth of undertaking on 31.03.2006. This certificate has been furnished on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f DCIT vs. Summit Securities Ltd., reported in (2012) 135 ITD 99, has held that, negative figure of net worth of the undertaking should not be ignored for working out capital gain in case of a slump sale under section 50B of the Income-tax Act, 1961. The Hon'ble ITAT, Mumbai Bench has thus ruled that Negative net worth of an undertaking in the case of slump sale is to be added to the consideration for determining capital gains. In view of this decision of the jurisdictional ITAT, Mumbai Special Bench, the computation of capital gains on slump sale is made as under:- Sale Consideration ₹ 3,01,00,000 Add: Negative net worth (₹ 93,44,635) Long term capital gains on slump sale u/s 50B of the Act ₹ 3,94,44,635 4.5 It is seen from above that on same set of facts both the appellant as well as AO have been taking varying stance in original assessment and appeal proceedings and in the assessment proceedings under appeal. The appellant has taken plea of 'slump sale' before the then FAA which has not been accepted by him. Then Hon'ble ITAT has set aside the matter with direction to AO to ascertain the factual matrix of the case considering the provisions of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... through the orders of the authorities below, we find that the learned CIT(A) has not considered the facts and circumstances of the issue properly and thus the learned CIT(A) was not correct in holding that the provisions of section 50B of the Act are not applicable in the facts of the present case. For ready reference, provisions of section 2(42C) and section 50B of the Act are reproduced below: Section 2(42C) (42C) slump sale means the transfer of one or more 21[undertaking, by any means,] for a lump sum consideration without values being assigned to the individual assets and liabilities in such 22[transfer]. Explanation 1. For the purposes of this clause, undertaking shall have the meaning assigned to it in Explanation 1 to clause (19AA). Explanation 2. For the removal of doubts, it is hereby declared that the determination of the value of an asset or liability for the sole purpose of payment of stamp duty, registration fees or other similar taxes or fees shall not be regarded as assignment of values to individual assets or liabilities. 23 [Explanation 3. For the purposes of this clause, transfer shall have the meaning assigned to it in clause (47);] Section 50B Special provision ..... X X X X Extracts X X X X X X X X Extracts X X X X
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