9911796707
TMI Blog2017 (8) TMI 1608X X X X Extracts X X X X X X X X Extracts X X X X ..... the purpose of computing deduction under Section 10B of the Income-tax Act, 1961 (in short 'the Act'), the numerator and denominator should be of same figure. In other words, what was included in the export turnover shall also be included in total turnover. The CIT(Appeals) by placing reliance on the decision of this Bench of the Tribunal in ITO v. Sak Soft Limited (2009) 313 ITR 353, has directed the Assessing Officer to recompute the deduction under Section 10B of the Act by reducing the freight and clearing charges and expenses for technical services both from export turnover and total turnover. Therefore, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed. 6. The next ground of appeal is with regard to disallowance of provision for Gratuity. 7. Sh. Pathlavath Peerya, the Ld. Departmental Representative, submitted that the assessee made provision of Rs. 83,39,144/- towards Gratuity with Life Insurance Corporation of India. The Assessing Officer disallowed the claim of the assessee on the ground the Gratuity payment falls under Section 43B of the Act, therefore, the same cannot be allowed as dedu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the benefit conferred under Section 40A(7)(b) of the Act. Therefore, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed. 10. The next issue arises for consideration is whether the sale of API division is slump sale or not. 11. Sh. Pathlavath Peerya, the Ld. Departmental Representative, submitted that the assessee has sold API division and claimed that it is not a slum sale. According to the Ld. D.R., API division was transferred to Actavis for a total consideration of Rs. 55.54 Crores. As per the business agreement, the division was sold as a going concern for a lump sum payment of Rs. 55.54 Crores out of which, Rs. 3 Crores was assigned to the net current assets. According to the Ld. D.R., the assessee never assigned any value to the individual asset in the agreement for sale/ transfer. Therefore, according to the Ld. D.R., it is a clear case of sale of going concern without assigning any value to the individual assets, therefore, it is a slump sale as defined in Section 2(42C) of the Act. The Ld. D.R. further submitted that except the value of land, no asset was valued individually, hence, the CIT(Appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Directors report also stated that the division is divested which means that the entire division is sold to Actavis. From this it is very clear that the sale is not an individual sale as claimed by the assessee company and it is very clearly falling under the 'Slump Sale' definition given in section 2(42C) of the Act." 14. The assessee also could not produce the depreciation schedule for the individual machinery of the API division. The written down value of individual assets were also not furnished. The assets and liabilities of the company as on date of transfer was Rs. 20.26 Crores. The assessee is entitled for depreciation at the rate of 15% on plant and machinery. In view of these factual aspects coupled with the fact that API division was transferred as going concern without valuing the plant and machinery individually, this Tribunal is of the considered opinion that it is a case of slump sale. Therefore, the CIT(Appeals) is not correct in saying that it is not a slump sale. Accordingly, the order of the CIT(Appeals) is set aside and that of the Assessing Officer is restored. 15. The next ground of appeal is with regard to computation of deduction under Section 10B of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Officer. Accordingly, the orders of the authorities below are set aside and the issue of deduction under Section 10B of the Act is remitted back to the file of the Assessing Officer. The Assessing Officer shall re-examine the matter afresh after considering clause (ii) of Explanation 1 to Section 115JB of the Act and thereafter decide the issue in accordance with law, after giving a reasonable opportunity to the assessee. 19. Now coming to the Revenue's appeal for assessment year 2010-11 in I.T.A. No.1170/Mds/2015, the only issue arises for consideration is provision for Gratuity. 20. We have heard Sh. Pathlavath Peerya, the Ld. Departmental Representative and Sh. R. Vijayaraghavan, the Ld.counsel for the assessee. The Tribunal in identical set of facts examined the issue with regard to provisions for Gratuity in ACIT v. Tyco Sanmar Ltd. in I.T.A. No. 611/Mds/2012 dated 12.06.2015 and found that Section 40A(7) of the Act takes precedence over the provisions of Section 43B of the Act. In view of the above, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed. 21. Now coming to the assessee's appeal for a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
