9911796707
TMI Blog2014 (1) TMI 1589X X X X Extracts X X X X X X X X Extracts X X X X ..... Biscuits Ltd., a sister concern of the assessee was manufacturing biscuits under the name "Nutrine Biscuits". The marketing of all confectionery and biscuits products were carried on by the sister concern M/s. B.V.Reddy P. Ltd. M/s. Sara Lee Bakery India (P) Ltd., took over all the three business. The aggregate of all the consideration payable to all the three companies was fixed at Rs.33 crores. The consideration paid for taking over the assessee Company is Rs.4.50 crores. The said amount was bifurcated as Rs.275 lakhs towards Trademarks and technical know-how, Rs.75 lakhs towards Copyrights and Rs.100 lakhs towards Non-compete compensation. The Assessing Officer asked the assessee to justify its claim. Assessee gave a reply. The Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... together constituted an integrated Code. Therefore, where the computation provisions cannot apply, it is evident that such a case was not intended to fall within the charging section, which, in the present case, is Section 45. That section contemplates that any surplus accruing on transfer of capital assets is chargeable to tax in the previous year in which transfer took place. In this case, transfer took place on 18.7.1969. The second test which needs to be applied is the test of allocation/attribution. This test is spelt out in the judgment of this Court in Mugneeram Bangur & Co. (Land Department) [1965] 57 ITR 299. This test applies to a slump transaction. The object behind this test is to find out whether the slump price was capable of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case in Artex Manufacturing Co. [1997] 227 ITR 260." 5. From the aforesaid judgment, it is clear that a charging section and the computation provisions together constitute an integrated code. When in a case, the computation provisions do not apply, such a case would not come within the ambit of Section 45. It is because of these pronouncements, now the law has been amended introducing Section 50B, which has come into effect from 01.04.2000. The material on record discloses that it is a case of slump sale. The said sale has taken place prior to the aforesaid amendment. As the law stood then, it was not taxable. Merely because the assessee has given split up figures of how he has claimed and received the consideration from the purchaser, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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