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2017 (2) TMI 546

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..... been placed by the Assessing Officer for fastening a liability on the assessee, was a conditional one which would become legally enforceable only if M/s SKODA Auto India Pvt. Ltd. gave approval for transfer of the dealership. Further, in the subsequent assessment year, the Assessing Officer himself noted that the agreement did not go through. Thus, in our opinion, the CIT(Appeals) was justified in taking the view that there was no slump sale and there was no occasion for making an addition - Decided in favour of assessee. - ITA No. 2727/Mds/2016, C.O. No. 176/Mds/2016 - - - Dated:- 3-2-2017 - Shri N. R. S. Ganesan, Judicial Member And Shri Abraham P. George, Accountant Member Appellant by : Shri Shiva Srinivas, JCIT Responden .....

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..... 000/- had paid to the assessee a sum of ₹ 1,38,78,000/- through cheque and ₹ 61,22,000/- by cash aggregating to 2,00,00,000/-. Assessing Officer was of the opinion that the sale had to be considered as slump sale within the meaning of Section 2(42C) of the Act. According to him, by virtue of Section 50B(1) of the Act, profit arising from slump sale was chargeable to tax as capital gains arising from transfer of long-term capital assets. The A.O. also noted that the assessee had not filed audit report in Form No.3CEA as mandated under Section 50B(3) of the Act. In reply, assessee stated that the agreement was for transferring SKODA Car Dealership and would be effective only on approval from M/s SKODA Auto India Pvt. Ltd. As per .....

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..... 6.1. From the submissions made by the appellant it is seen that an amount ofRs. 1,38,78,000/- was given only to Mr. D. Sivakumar, Director of M/s DRS Industries Ltd., the appellant herein, to complete the formalities. Hence the transfer of the unit for a value specified could be only after the approval from the principal i.e. M/s SKODA. Hence, the appellant submitted there was neither transfer and nor slump sale as concluded by the A.O. in the impugned order. The agreement had expired within three months from the date of entering as per the clause 4 of the agreement. As per the Memorandum of Agreement dated 22.11.2014 entered into between DRS Industries (P) Ltd., and Miracle Cars India (P) Ltd. copy of which has been submitted to the unders .....

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..... f the CIT(Appeals). 9. We have perused the orders and heard the rival contentions. It is not disputed by the Revenue that M/s SKODA Auto India Pvt. Ltd. had not approved the transfer of dealership from the assessee to M/s Miracle Cars India Pvt. Ltd. It is also not disputed that there was a clause in the agreement which required approval of M/s SKODA Auto India Pvt. Ltd. for transfer of dealership from the assessee to M/s Miracle Cars India Pvt. Ltd. Even the part consideration received, was held by one Shri D. Sivakumar, a director of the assessee and was never given to the assessee-company. Thus the agreement dated 30.06.2010, on which reliance has been placed by the Assessing Officer for fastening a liability on the assessee, was a co .....

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