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2014 (12) TMI 93 - AT - Income TaxTransfer of assessee’s business – Slump sales - computation of capital gains in case of slump sale u/s 50B - Held that:- The assessee has transferred its’ business of manufacture/stitching of garments (on job work basis), undertaken through its three proprietary firms - The transactions being considered as disparate or, at least separate stood so perceived by both the authorities below on account of the disjointed manner in which the transaction has been structured, i.e., by executing three separate agreements of even date, for parts of the same business, and on like terms, between the same parties - The sale of all the three firms has therefore to be viewed as a part of one and the same slump sale - the non-transfer of the cash and bank balances of the three firms would not remove the assessee’s case from the purview of section 50B, which envisages the transfers of all the assets and liabilities, so that exclusion of even one may operate to preclude the same. The assessee, in abkari business, had mortgaged his immovable property to the State Government (in the Excise Department), which in the recovery proceedings under the Excise Act auctioned the same, and deducting there-from its dues, paid over the balance to the assessee - the assessee transferring its’ business carried on through three undertakings - The provisions of section 50B shall apply, there being no finding of any asset or liability of the said business as having not been transferred, with we having already clarified the aspect of ‘non-transfer’ of cash and bank balance/s - The sale consideration is a single sum of ₹ 78.45 lacs, i.e., the combined net worth of all the three firms as at the completion date, received by the assessee in cash - as this net worth is also deemed as the cost of acquisition and/or improvement u/s. 50B(2), no capital gain would stand to arise. The assessee rather itself pleading it as so in the appellate proceedings, it would be incumbent on her to satisfy the said requirement, albeit procedural, of the section - The matter is restored back to the file of the FAA, which had found s. 50B to be applicable in the first instance - in case of any difference between the sale consideration, since crystallized and received at ₹ 78.45 lacs, and the net worth as so determined, if any, the same shall be the capital gain or capital loss, as the case may be, chargeable u/s. 45(1) r/w s. 50B – Decided partly in favour of revenue.
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