TMI Blog2012 (11) TMI 387X X X X Extracts X X X X X X X X Extracts X X X X ..... ue while acting u/s. 154 of the Act as this issue is highly debatable - enhancement of capital gains income was based upon change of opinion on the part of the A.O. which was beyond the purview of Sec. 154 of the Act which permits rectification of mistake which is apparent from record - AO could not by invoking Sec. 154, enhance the capital gains – In favor of assessee - ITA No.2040/Kol/2009, ITA No.2012/Kol/2009 - - - Dated:- 31-5-2012 - Pramod Kumar, Mahavir Singh, JJ. For Appellant: Shri Niraj Kumar For Respondent: Shri D S Damle ORDER Per: Mahavir Singh: These cross appeals by revenue and assessee are arising out of order of CIT(A), Central-I, Kolkata in Appeal No.477/CIT(A)C-I/CC-VI/08-09 dated 23.09.2009. Assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the purpose of computation of capital gains. For this, revenue has raised following grounds: 1. That the Ld. CIT(A), C-1, Kol is erred in holding that holding negative net worth in computation of capital gain is a disputed issue and thereby deleting addition Rs.716.809 lakhs. 2. That sec. 50B(2) clearly directs to hold net worth of the asset deemed to be cost of acquisition and no regard shall be given to the provision of sec. 48. 4. Brief facts are that the assessee company filed its return of income for the relevant assessment year 2003-04 on 27.11.2003. Assessment was framed u/s. 143(3) of the Act vide order dated 28.03.2005. Subsequently, Assessing Officer issued notice u/s. 154 of the Act to rectify following two mistake ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugh facts and circumstances of the case. We find that the AO has accepted the computation of LTCG under the head Capital Gains while framing assessment u/s. 143(3) of the Act but the same was recomputed while acting u/s. 154 of the Act pointing out that there is mistake apparent from record. Whether adjustments carried out by AO are beyond the scope and intent of sec. 154 of the Act or not? The AO interpreting the provisions of section 50B of the Act enhanced a LTCG on transfer of sugar undertaking on slump sale basis. We find that as per section 50B of the Act, capital gains is to be arrived at after deducting from sales consideration the net worth of an undertaking, which is subject matter of slump sale. As per section 50B of the Act, net ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal gains could not apply and, therefore, no capital gain was chargeable to tax. The Tribunal finally held that when the value of assets computed in the manner prescribed in section 50B of the Act was less than the liabilities, the net worth of the Cement Division would be taken at nil and the capital gain would be assessed equal to the sale consideration received by assessee. Identical view was taken by Delhi Bench of ITAT in the case of Paperbase Co. Ltd. Vs. ACIT 19 SOT 163 . It is to be noted that as per the ratio laid down by ITAT Mumbai Bench in the case of Zuari Industries Ltd. (supra) and ITAT Delhi Bench in the case of Paperbase Co. Ltd. (supra), capital gain assessable to tax was equal to the sale consideration received for trans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an issue conceivably more than 2 views are possible, it cannot be said that the mistake is apparent from record within the meaning of section 154 of the Act. This view finds support in the decision of the Supreme Court in the case of Volkart Bros. Vs. ITO (1971) 82 ITR 50 . In the present case the view canvassed by the assessee and accepted in the regular assessment was supported by 2 decisions of the ITAT. In the circumstances, the AO could not by invoking Sec. 154, enhance the capital gains from Rs.30 Crores to Rs.37,16,80,000/-. We confirm the order of CIT(A) and this issue of revenue s appeal is dismissed. 6. Coming to the issue of assessee s appeal, we find that the AO while framing regular assessment u/s. 143(3) of the Act has asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2(47) of the Act and no exemption as such is provided in section 47 of the Act as applicable to the assessee. We find that transfer of Agri Genetics Undertaking was considered as a slump sale and LTCG was assessed and more particularly only the investments were transferred for specific value of Rs.64.20 cr. and consideration was paid only the form of share and zero coupon non convertible debentures. The AO while framing assessment u/s. 143(3) of the Act consideredthis fact that when the investments were sold and /or transferred for specific considerations without complying with all or any of the conditions specified in section 2(19AA) of the Act and when the investments did not constitute a business undertaking of the assessee, the AO right ..... X X X X Extracts X X X X X X X X Extracts X X X X
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