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2017 (4) TMI 925 - SC - Income TaxSlump sale - deduction u/s 48(2) - sale of depreciable assets - taxable as LTCG or STCG - whether the case of the assessee was covered u/s 50(2) because it was in the nature of short term capital gain? - Held that:- The case of the respondent (assessee) does not fall within the four corners of Section 50(2) of the Act. Section 50 (2) applies to a case where any block of assets are transferred by the assessee but where the entire running business with assets and liabilities is sold by the assessee in one go, such sale, in our view, cannot be considered as “short-term capital assets”. In other words, the provisions of Section 50 (2) of the Act would apply to a case where the assessee transfers one or more block of assets, which he was using in running of his business. Such is not the case here because in this case, the assessee sold the entire business as a running concern. As rightly noticed by the CIT (appeal) that the entire running business with all assets and liabilities having been sold in one go by the respondent-assessee, it was a slump sale of a “long-term capital asset”. It was, therefore, required to be taxed accordingly. Our view finds support with the law laid down by this Court in Commissioner of Income Tax, Gujarat vs. Artex Manufacturing Co. [1997 (7) TMI 7 - SUPREME Court].
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