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2016 (4) TMI 640 - CALCUTTA HIGH COURT

2016 (4) TMI 640 - CALCUTTA HIGH COURT - [2016] 386 ITR 539 - Computation of capital gain - CIT(A) has opined that the capital gains have to be computed under section 2(42C) r.w.s. 50B whereas as per assessee capital gains have to be computed on the basis of section 2(11) read with section 50 - Held that:- It is unable to conclude as to why and how can the sale be treated as a slump sale. It is unable to dispute that in the assessment year 2002-03, the plant and machinery of all the gardens had .....

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y. The opening balance and the addition during the year aggregate to a sum of ₹ 7,18,62,306/-. The sale took place at a sum of ₹ 8,23,75,000/-. The difference between the two would be a sum of ₹ 1,05,12,694/- as computed by the assessee.We find that the computation made by the assessee is a correct computation - Decided in favour of assessee - Interest free loans or advances to its sister concerns - disallowance u/s 36 - Held that:- It is not in dispute that the assessee ha .....

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nt of interest spent by the assessee could not allowed to be deducted in the facts and circumstances of the case. We cannot interfere with the aforesaid finding of fact. - Decided against assessee. - ITA No. 18 of 2008 - Dated:- 7-4-2016 - Girish Chandra Gupta And Asha Arora, JJ. For the Petitioner : Mr. J.P. Khaitan, Sr. Adv. With Mr. A. Sengupta, Adv. For the Respondent : Mr. M. Nizamuddin, Adv. With Mr. F. Gaffer, Adv. ORDER The Court : The subject matter of challenge is a judgment and order .....

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lated at the time of admission of the appeal are as follows: (i) Whether the Tribunal was justified in law in upholding the disallowance of ₹ 48,21,901/- out of the interest expenditure incurred by the appellant for the purposes of its business and allowable under section 36(1)(iii) of the Income Tax Act, 1961, and its purported findings in that behalf are arbitrary, unreasonable and perverse? (ii) Whether on a true and proper interpretation of the agreements dated October 8, 2002 and Dece .....

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he short term capital gains upon sale of the plant and machinery of the two tea estates was to be determined by reducing the sale consideration from the written down value of the block of plant and machinery of all the tea estates and not only the written down value of the plant and machinery of the tea estates sold? The facts and circumstances pertaining to the questions nos.2 and 3 are as follows. The assessee engaged in the business of growing and manufacturing tea purchased two tea gardens d .....

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conclusion: The assessee during the year under consideration has sold the entire assets of Katalguri Tea Estate and Tippuk Tea Estate. In respect of sale proceeds for plant & machinery for both the tea gardens the assessee received ₹ 8,23,75,000/- out of which it claimed the WDV at ₹ 7,18,62,306/- and the balance amount for ₹ 1,05,12,694/- has been shown as short term capital gain. It has been stated by the A/R that the assessee had eight tea gardens in all out of which two .....

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he assessee was requested to furnish the WDV of plant & machinery in respect of this two tea gardens separately since the entire plant & machinery have been sold out. But the assessee failed to furnish the same and it claimed that from the sale proceed they have deducted the entire WDV in respect of the plant & machinery comprised in eight tea gardens. The contention of the assessee is not accepted and in absence of any details the opening WDV for the two tea gardens at pro rata basi .....

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as a going concern is exigible to capital gains and no part thereof can be excluded as being non-depreciable asset or not being a capital asset. It would be necessary to emphasise that what had been sold by the appellant is a profit generating commercial industrial unit and not land or plant and machinery or Furniture & Fixtures etc. as claimed by the appellant in its assessment proceedings. Such a claim is contrary to the two agreements to sale executed by the appellant. Thus the appellant .....

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e ground of the assessee. Accordingly, the assessee does not succeed on this ground. We have heard the learned Advocates appearing for the parties. The CIT(A) has opined that the capital gains have to be computed under section 2(42C) read with section 50B whereas the contention of the assessee is that the capital gains have to be computed on the basis of section 2(11) read with section 50. The agreements for sale go to show that value has been assigned to individual assets. It was, therefore, co .....

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sold. It would appear from the assessment for the year 2002-03 that the assessee has shown its block of assets at a sum of ₹ 2,77,34,222/-. He added that the concept of written down value of the plant and machinery of each garden is simply not there because the assessment is the assessment of the income of the assessee. The assessee may have any number of gardens, any number of factories, any number businesses. The combined income from all the individual units shall be assessed as the inco .....

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that in the assessment year 2002-03, the plant and machinery of all the gardens had a written down value of ₹ 2,77,34,222/-. For the year under consideration, a separate standard could not have been insisted upon. That would not also be in accordance with the concept of block of assets. Once the fact that the block of assets computed at a sum of ₹ 2,77,3,222/- for the assessment year 2002-03 is admitted, there remains no further controversy as regards the fact that during the year un .....

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