Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2017 (1) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (1) TMI 982 - AT - Income TaxAddition on account of negative net worth of the undertaking under slump sale while computing capital gains u/s.50B - Held that:- We find that the assessee and FHL had entered into a business agreement, that as per the agreement excess liabilities arising during the transition period had to be adjusted from the lump-sum amount of ₹ 186.58 crores,that during the process of transaction liability of ₹ 43.36 crores arose. In these circumstances, the FAA had rightly held that lump-sum consideration received by the assessee had to be taken at ₹ 143.1 crores [Rs.1 86.58 crores(-) ₹ 43. 36 crores]. We are of the opinion that the order of the FAA does not suffer from any factual or legal infirmity. Therefore, upholding the same we decide ground 1.b(i) against the AO. Allowing deduction from lump-sum consideration received by the assessee - Held that:- We find that in pursuance of the agreement, entered into by the assessee, with FHL Escrow Account was opened,that ₹ 15 crores was kept in the said account for settling the future liabilities,that the assessee was to receive the amount from the Escrow a/c.after a period of 2 years,that a liability amounting to ₹ 2.79 crores arose and was settled during the year,that the assessee had filed a revised return and made the claim about it, that there is no doubt about the incurring of the expenditure.The assessee had produced necessary evidences in that regard and same were found to be genuine by the FAA. In these circumstances,we are of the opinion that there is no need to interfere with the order of the FAA. Treating the short term capital gains(STCG) as long term capital gains (LTCG) - Held that:- As referred to proviso (1) of section 50B of the Act if assets were to be assessed under the head STCG all should have existed below 36 months,that even if one of the assets existed for a period more than three years same has to be treated as Long term asset. There is no need to interfere with the order of the FAA,as four hospitals of the assessee were owned by it for a period of more than 36 months and that it is a case of slump sale.Upholding his order,we dismiss Gr.No.2. Disallowance u/s 14A - Held that:- We find that assessee had not earned any exempt income during the year, nor had it claimed any expenditure against any tax free income.Thus,the twin pre-condition for invoking the provisions of section 14A r.w.r.8D of the Rules i.e.,earning of exempt income and claiming expenditure to earn the same,are missing.Therefore,confirming order of the FAA we decide the last ground of appeal against the AO.
|