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2014 (5) TMI 512 - HC - Income TaxDeduction of provision for warranty estimated present value of contingent liability - Held that:- Following M/s. Rotork Controls India (P) Ltd. Versus Commissioner of Income Tax, Chennai [2009 (5) TMI 16 - SUPREME COURT OF INDIA] with making of provision on the basis of estimated present value of contingent liability holds good during the assessment years in question qua warranty claims Decided against Revenue. Transfer of Lift Division Slump sale - The argument of the petitioner was that this is a transfer under the Scheme of Arrangement but is not a sale - Held that:- Relying upon Commissioner of Income Tax, Andhra Pradesh v/s Motors & General Stores (P) Ltd. [1967 (5) TMI 3 - SUPREME Court] the tribunal was rightly of the view that it is only if there is a sale of the cinema house and the other assets that the taxable profits and gains are to be computed u/s 10(2)(vii) as the amount by which the written down value exceeds the amount for which the assets are actually sold - the word "sale" or "sold" have not been defined in the Indian Income Tax Act, 1922 - These words have to be construed by reference to other enactments - a reading of the clauses in the Scheme of Arrangement shows that the transfer of the undertaking has took place in exchange for issue of preference shares and bonds. Merely because there was quantification when bonds/preference shares were issued, would not mean that the monetary consideration was determined and its discharge was only by way of issue of bonds/preference shares - The Scheme does not refer to any monetary consideration for the transfer - The parties were agreed that the assessee was to transfer the undertaking and take bonds/preference shares as consideration - it was a case of exchange and not a sale - Section 2(42C) of the Act was inapplicable - If that was not applicable and was not attracted, then, Section 50B was also inapplicable - the Tribunal was of the view that the transfer of Lift Division comes within the purview of Section 2(47) of the Act but cannot be termed as a slump sale the finding of fact cannot be said to be perverse or based on no material as such no substantial question of law arises for consideration Decided against Revenue.
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