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2023 (12) TMI 884 - BOMBAY HIGH COURTGain arising from slump sale - Capital gain OR business income - assessee transferred its business activities relating to assembling of seats and seating products located at Pune, on slump sale basis - whether the transaction does not satisfy the condition prescribed u/s. 50B? - HELD THAT:- CIT(A), referring to the provisions of Section 28(iv) which the AO felt the transaction was covered under, correctly came to a conclusion that the consideration is received in terms of money whereas Section 28(iv) refers to the value of any benefit or perquisite whether convertible in money or not and Courts have held that where the consideration is monetary, Section 28(iv) of the Act will not apply. CIT(A) also relied upon various judgments of the ITAT and came to a conclusion that assessee has rightly computed the capital gain under Section 50B of the Act. The ITAT, in the order impugned, has come to a factual finding that no material was placed before the Tribunal by the Revenue to contradict the finding given by the CIT(A). There is no challenge to this finding before us. Therefore, no question of law, let alone a substantial question of law, will arise as regards the proposed first question. Write off of the business/trade advances receivable from a sick company - ITAT allowed deduction - ITAT relied upon various decisions of co-ordinate Benches and reiterated the well settled legal proposition that Tax Authorities should not sit in the arm chair of a businessman and assume his role to decide the correctness of a commercial decision. The ITAT has also taken support from the decision of the Hon’ble Supreme Court of India in the case of CIT v. Mysore Sugar Company Ltd. [1962 (5) TMI 3 - SUPREME COURT] to hold that unrecoverable trade advance is allowable as business loss and it would certainly be allowable as a deduction under the Act. ITAT has also considered the factual position that the shares of RCVPL being listed in the Bombay Stock Exchange, is a widely held Company in terms of the provisions of the Income Tax Act and thus, it cannot be said that the promoters of the assessee Company would be benefited by decision taken by them. ITAT has specifically noted the absence of any finding either by the AO or by the CIT(A) that the transaction to write off was a mere eye wash. Thus, based on the facts available on record, it cannot be said that the motive to write off was only to reduce the tax liability. As evident from the explanation of the assessee that the decision taken by it to write off the trade deposit was based on commercial sense and cogent reasoning since RCVPL was already declared as sick Company. Furthermore, RCVPL did not adjust the trade deposit against the trade deposit as per the terms of the agreement and was asking for payments against the bills. The assessee was thus compelled to make the payment in order to ensure future supplies and thus the assessee is justified in making a decision to write off the trade advance. This is perfectly probable and acceptable. Moreover, even the Hon’ble Supreme Court in its decision into the case of Mysore Sugar Company Ltd. (supra), has observed that the money lost in doing business based the character of current expenses. Thus we find that the matter is purely factual in nature. We do not find it jurisdictionally proper and necessary to substitute the view of the Tribunal with our view, especially since the same is based on facts. The Revenue is unable to indicate any question of law, leave aside any involving a substantial legal proposition. We do not find any error in the order of the Tribunal, impugned herein. The Appeal is thus without merit.
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