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2017 (4) TMI 925 - SUPREME COURT

2017 (4) TMI 925 - SUPREME COURT - TMI - Slump sale - deduction u/s 48(2) - sale of depreciable assets - taxable as LTCG or STCG - whether the case of the assessee was covered u/s 50(2) because it was in the nature of short term capital gain? - Held that:- The case of the respondent (assessee) does not fall within the four corners of Section 50(2) of the Act. Section 50 (2) applies to a case where any block of assets are transferred by the assessee but where the entire running business with asse .....

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ess with all assets and liabilities having been sold in one go by the respondent-assessee, it was a slump sale of a “long-term capital asset”. It was, therefore, required to be taxed accordingly. - Our view finds support with the law laid down by this Court in Commissioner of Income Tax, Gujarat vs. Artex Manufacturing Co. [1997 (7) TMI 7 - SUPREME Court]. - Civil Appeal No. 4399 of 2007 - Dated:- 18-4-2017 - R. K. Agrawal And Abhay Manohar Sapre, JJ. JUDGMENT Abhay Manohar Sapre, J. 1) This .....

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see was engaged in the business of manufacturing sheet metal components out of CRPA & OP sheds at Ahmadabad. The respondent decided to sell their entire running business in one go. With this aim in view, the respondent sold their entire running business in one go with all its assets and liabilities on 31.12.1990 to a Company called "Amtrex Appliances Ltd" for ₹ 58,53,682/-. 4) The respondent filed their income tax return for the Assessment Year 1991-1992. In the return, the r .....

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f short term capital gain as specified in Section 50 (2) of the Act and hence did not fall under Section 48 (2) of the Act as claimed by the assessee. The Assessing Officer accordingly reworked the claim of the deduction treating the same to be falling under Section 50 (2) of the Act and framed the assessment order. 6) The assessee, felt aggrieved, filed appeal before the CIT (appeals). By order dated 06.10.1995, the Commissioner of Appeals allowed the assessee s appeal in so far as it related t .....

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ong term capital gain" and "short term capital asset" and held that since the undertaking itself is a capital asset owned by the assessee nearly for six years and being in the nature of long term capital asset and the same having been sold in one go as a running concerned, it cannot be termed a short terms capital gain so as to attract the provisions of Section 50 (2) of the Act as was held by the Assessing Officer. The CIT (appeals) accordingly allowed the assessee to claim the d .....

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f the Act. By impugned order, the High Court dismissed the appeal holding that the appeal does not involve any substantial question of law within the meaning of Section 260-A of the Act. It is against this order the Revenue felt aggrieved and carried the matter to this Court in appeal by way of special leave. 9) Heard Mr. K. Radhakrishnan, learned senior counsel for the appellant and Mr. Inder Paul Bansal, learned counsel for the respondent-assessee. 10) Having heard the learned Counsel for the .....

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