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2018 (3) TMI 312 - HC - Income TaxSale of property at Ghatkopar as a slump sale within the meaning under Section 2(42C) - Revenue’s case is that real intention of the Assessee is to be ascertained from the transaction and not in what manner they have designed the transaction - Held that:- Defining criteria for determining as to whether a particular transaction of property involving both movable and immovable is slump sale or not is composite sale of an undertaking or part thereof. Second point on which Mr. Nizamuddin emphasised was that the sale of both the immovable assets as well as plant and machinery etc. took place in the same financial year. Whether it is a composite sale of the assets or there was the sale of individual components thereof is essentially a question of fact. On this point, we find both the Commissioner of Appeals and the Tribunal went with the Assessee’s case. Commissioner in particular has analysed the transaction and directed the Assessing Officer to allow relief to the appellant considering the amount of long term gains computed by the Assessee itself which was without invoking the computation methology stipulated in Section 50B of the Act. On this point we do not find the first and the second appellate fora went wrong in law. The assessee showed separate sale of furniture and fixtures and plant and machinery. The impact of subsequent development of property was also considered by the Commissioner of Appeals. We, accordingly, answer the first question in the negative and in favour of the assessee. Writing off bad advances - Held that:- We accept the argument of Mr.Khaitan that for determining the character of claim for deduction AO need not confine his scrutiny on the accounts as submitted by the assessee but he ought to analyse the nature of the claim himself on the basis of materials on record. AO has not undertaken that exercise. But in our opinion without that exercise being undertaken, the Tribunal ought not to have had sustained the claim of the assessee straightway. There is no proper analysis of the nature of advances which were sought to be written off. For this reason, we answer the second question in affirmative and in favour of the Revenue and remand the matter to the AO for deciding the limited question as to whether there was actual irrecoverability of the advances which the assessee chose to write off in its account and claimed the written off amount as business loss. On the basis of such analysis, further determination would be necessary as to whether the expenditure claimed as bad advances constituted revenue expenditure or capital expenditure.
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