Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2020 (9) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (9) TMI 542 - HC - Income TaxSlump sale u/s 50B or not - Transfer of business in lieu of equity shares to its subsidiary by a scheme of arrangement as approved by HC - Presence of monetary consideration or not - investment in Tax Savings Bonds u/s 54EC - assessee stated that the transfer should not suffer any capital gains tax at all - whether the assessee was estopped from raising the contention by way of an alternate plea?. HELD THAT:- The fundamental legal principle is that there is no estoppel in Taxation Law. It is beneficial to refer to the decision of the Division Bench of the Delhi High Court in the case of CIT Vs. Bharath General Reinsurance Co. Ltd. [1970 (12) TMI 5 - DELHI HIGH COURT]. - AO, CIT(A) and the Tribunal committed a fundamental error in shutting out the contention raised by the assessee solely on the ground that the assessee approached the Bond Issuing Authorities for availing the benefit under Section 54EC. - There is no estoppel on the part of the assessee to pursue their claim and accordingly, we reject the argument of the Revenue in this regard. Slump Sale or not - Existence of monetary consideration - Held that:- to bring the transaction within the definition of Section 2(42C) of the Act as a slump sale, there should be a transfer of an undertaking as a result of the sale for lump sum consideration. - Therefore, necessarily the sale should be by way of transfer of ownership in exchange of a price paid or promised or part paid and part promised and the price should be a money consideration. If there is no monetary consideration involved in the transaction, then it would be not possible for the Revenue to bring the transaction done by the assessee within the definition of the term ‘slump sale’ as defined under Section 2(42C) of the Act. - mere use of the expression ‘consideration for transfer’ cannot be said to be a transaction as a sale. - Decision in the case of Motors and General Stores (P.) Ltd. [1967 (5) TMI 3 - SUPREME COURT] followed. Scope of the term purchase - Held that:- The Constitution Bench of the Hon’ble Supreme Court in the case of Devi Das Gopal Krishnan Vs. State of Punjab [reported in [1967 (4) TMI 131 - SUPREME COURT], while interpreting the provision of the Punjab General Sales Tax Act, 1948, considered the definition of the word ‘purchase’ - The above judgment of the Constitution Bench will come to the aid and assistance of the assessee as the transfer, pursuant to approval of a scheme of arrangement, is not a contractual transfer, but a statutorily approved transfer and cannot be brought within the definition of the word ‘sale’ Decided in favor of assessee.
|