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2009 (12) TMI 595 - AT - Income TaxSlump sale or an itemized sale - sale of business - Held that: - As for the assessee and the buyer being sister concerns, merely because an agreement is entered into by related parties the effect of the agreement cannot be ignored. The case of the assessee has all along been that the method of arriving at the sale consideration of the industrial unit has been 'capitalization of profits', and none of the authorities below has doubted correctness of this claim. - transaction is not a case of itemized sale and it is clearly a case of slump sale of the business. Assessee firm as a going concern was transferred as a whole as per the term of an agreement - the contents of the agreement and second, the method adopted for determination of the lump sum consideration, are the primary evidences which are helpful for answering the question - Assets wise price was not fixed hence cannot fall within the scope of section 41(2) of the I.T.Act - Section 50 of the I.T. Act comes into operation when the consideration of such assets can be ascertained may be a part of the block assets but depreciation had been allowed Section 50 of the I.T. Act comes into operation when the consideration of such assets can be ascertained may be a part of the block assets but depreciation had been allowed. On the other hand in the case of a slump sale or the sale of undertaking as a whole do not fall within the ambits of section 50 because no depreciation had ever been claimed or allowed on such an undertaking as a whole, hence the view of the Hon'ble Courts, as discussed above, is that in such a situation i.e in the absence of itemized sale, the provisions of section 50 are inapplicable. In the case of Premier Automobiles Ltd [2003 -TMI - 11540 - BOMBAY High Court) high court has held that provisions of section 45 has to be applied in such type of case.
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