TMI Blog2015 (4) TMI 972X X X X Extracts X X X X X X X X Extracts X X X X ..... that this is 'slump sale'. Hence, it is appropriate to remit the issue in dispute back to the file of the Assessing Officer with a direction to examine the books of accounts of the assessee so as to verify whether all the assets and liabilities including current assets and liabilities have been duly transferred to the purchaser as per MOU dated 03.10.2005 and also examine relevant parties herein including the person who has issued certificate in form No.3CEA dated 02.11.2006. With these observations, we are remitting the entire issue back to the file of the Assessing Officer for fresh consideration. - Appeal filed by assessee is allowed for statistical purpose. - I.T.A. No.286/Mds/2014 - - - Dated:- 8-4-2015 - Shri Chandra Poojari And Shri Challa Nagendra Prasad JJ. For the Appellant : Shri. C. Srikanth, C.A. For the Respondent : Dr. Nischal, JCI.T ORDER Per Chandra Poojari, ACCOUNTANT MEMBER This appeal by the assessee is directed against the order of the Commissioner of Income Tax -V, Chennai, dated 17.10.2013. 2. The only grievance by the assessee in this appeal is with regard to computation of capital gain. Disallowing the claim of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Term Capital Gain thereby raising a demand of tax dues of ₹ 9,23,150/- relying upon the decision of Bombay High Court in the case of Anand Electric Co. Ltd vs. CIT 237 ITR 587. Aggrieved, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals). On appeal, the Commissioner of Income Tax (Appeals) confirmed the order of the Assessing Officer. Against this, the assessee is in appeal before us. 4. The ld. Authorised Representative for the assessee submitted that entire assets were taken over by M/s. SRP tools as a whole. According, to him, only purchasing company valued the said assets and there is no evidence in the hands of the Assessing Officer to establish that the assessee had sold the assets on individual basis. Further, he submitted that assignment of values for land and building for registration purposes does not make a transaction as slump sale . He drew attention to Explanation 2 to the section 2(42C) of the Income Tax Act which read as follows:- For the removal of doubts, it is hereby declared that the determination of the value of an asset or liability for the sole purpose of payment of stamp duty, registration fees or other simila ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd depreciation should be available on such apportioned cost. According to him so far as slump sale is concerned, a view could be taken that apportionment of slump consideration on the basis of fair values of various assets is possible and depreciation should be available on such apportioned cost to the buyer of slump sale agreement. In case of CIT vs. Spunpine Construction Co. Ltd 55 ITR 68 (Guj) it was held that in case of acquisition of a business as a going concern, the overall cost can be bifurcated between various assets in a fair and reasonable manner permitted by law. Further, in case of Challapalli Sugar Ltd. vs. CIT 98 ITR 167 (SC), it was observed that actual cost should be interpreted in a manner in which no commercial man would misunderstand. A reference to accounting standard-10 issued by the Institute of Chartered Accountants of India can be made where under para 15.3 it has been stated where several assets are purchased for a consolidated price, the consideration is apportioned to the various assets on a fair basis as determined by competent valuers, for the purpose of accounting in the books of the buyer. He also relied on the order of the Tribunal in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the appellant company and the value of the above assets as appearing in their books of accounts. The purchaser has furnished the details. The Assessing Officer served a show cause notice on the assessee for treating the slump sale consideration as Short Term Capital Gain. There was no response from the assessee company except defining what is slump sale and undertaking. The purchasing company of the assets belonging to the assessee had valued each assets which are included in its Annual Report and claimed depreciation to the extent of ₹ 1 crore being the purchase price. The purchasing company sold the entire land along with building for a consideration of ₹ 60,39,500/- on 03.10.2005. Thus, the Assessing Officer has treated the sale transactions resulting in Short Term Capital Gain and placing in reliance on Anand Electric Co. Ltd vs. CIT (237 ITR 587) (Bombay High Court) wherein it was held that the undertaking of the assessee company was taken over by another company. The Assessing Officer treated the take over as sale of individual assets and not as slump sale . It is evident that all the assets have been sold after determining a specific value for each asset. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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