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TMI Blog2015 (1) TMI 611X X X X Extracts X X X X X X X X Extracts X X X X ..... pollutants. The firm is part of group of establishments, by name Bhagavati Ana Labs Limited. A search was conducted in the parent organization on 30.07.1998. On the basis of that, a show cause notice was issued to the appellant on 25.11.1998 under Section 158BD of the Income Tax Act (for short the Act). The appellant was required to file the returns for the block period 1988-89 to 1997-98. In compliance with the notice, the appellant submitted returns showing nil income. The Assessing Officer processed the same and passed an order, dated 26.12.2000, taking the view that the appellant sold its assets, worth Rs. 33,02,349/-; the actual sale value thereof is Rs. 1,12,93,389/- and that it is liable to pay the capital gains tax on Rs. 79,91,040 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsferee company and, on the other hand, it is a clear case where the assets of the firm were sold to a company, after dissolution. He submits that the consideration for the assets, transferred by the appellant was payable to it; and only by way of an internal arrangement, the consideration, in the form of shares was paid to the respective partners, in accordance with their shares in the firm. He submits that all the authorities have analyzed the facts correctly on the basis of the record and applied the relevant principles of law. The basic facts are not in dispute. Notice under Section 158BD of the Act was issued to the appellant on 25.11.1998 and in response to that, a return with nil income was filed. It is in the course of processing o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be the income of such person of the previous year in which such money or other asset was received and for the purposes of Section 48, value of any money or the fair market value of other assets on the date of such receipt shall be deemed to be the full value of the consideration received or accruing as a result of the transfer of such capital asset. (2) Notwithstanding anything contained in sub- section (1), the profits or gains arising from the transfer by way of conversion by the owner of a capital asset into, or its treatment by him as, stock- in- trade of a business carried on by him shall be chargeable to income- tax as his income of the previous year in which such stock- in- trade is sold or otherwise transferred by him and, for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sociation or body as the value of the capital asset shall be deemed to be the full value of the consideration received or accruing as a result of the transfer of the capital asset. (4) The profits or gains arising from the transfer of a capital asset by way of distribution of capital assets on the dissolution of a firm or other association of persons or body of individuals (not being a company or a co- operative society) or otherwise, shall be chargeable to tax as the income of the firm, association or body, of the previous year in which the said transfer takes place and, for the purposes of section 48, the fair market value of the asset on the date of such transfer shall be deemed to be the full value of the consideration received or accr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r it was paid to someone other than the transferor; in the context of levy of capital gains tax. Either the transferor may receive the entire consideration directly or may instruct the transferee to pay the consideration to a third party. Either way, it would be payment to the transferor, from the point of view of Section 45 of the Act. Added to that, the consideration may be in terms of money, or in the form of an alternative property, or shares of the transferee company. What becomes the substratum, in this regard, would be the consideration, in terms of money value. Once the money value of the asset is fixed, the tax is to be paid thereon notwithstanding the fact that the actual consideration was paid in different form, albeit, to a thir ..... X X X X Extracts X X X X X X X X Extracts X X X X
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