TMI Blog2022 (6) TMI 961X X X X Extracts X X X X X X X X Extracts X X X X ..... ess transfer agreement was examined and it was noted that as on the date of transfer the sundry debtors were not transferred to the joint venture company and therefore held that there is no reason to reject the claim of bad debts made by the assessee. The Tribunal affirmed the said order by taking note of the terms of the agreement between the parties and also the fact that the bad debts claimed by the assessee in the year under consideration were recovered in the subsequent assessment year 2006-07 and offered for taxation which fact could not be denied by the revenue. Thus, we find that the CIT (A) and the Tribunal rightly interpreted the factual position and granted relief to the assessee and there is no reason for us to interfere with the said orders. Accordingly, substantial questions of law are answered against the revenue. Compensation received from M/s. Batenfeld, UK - AO was of the view that the entire amount of compensation had reduced the cost of the machinery and therefore, denied relief to the assessee - HELD THAT:- Tribunal after considering the findings recorded by the CIT (A) examined the settlement which was executed between the assessee and the UK Company whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he facts and in the circumstances of the case, the Learned Tribunal was justified in holding that no slump sale had taken place within the meaning of Section 50B of the Act though loans and liabilities were not transferred and therefore the net worth of the Unit was never computed. Q3. Whether on the facts and in the circumstances of the case, the Learned Tribunal was justified in overlooking the fact that machineries sold were held for a period of less than 36 months leading to Short Term Capital Gains. Q4. Whether on the facts and in the circumstances of the case, the Learned Tribunal was justified in deleting the disallowance made by the Assessing Officer on account of bad debt due to failure of the assessee to establish the nature of debt and identity of the debtors. Q5. Whether on the facts and in the circumstances of the case, the Learned Tribunal was justified in deleing the disallowance made by the Assessing Officer on account of bad debt by considering that such debt was featured in the accounts of the Unit of the assessee sold during the year, without having any materials on record to corroborate such conclusion. Q6. Whether on the facts and in the cir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed representative of the assessee and the assessment was framed by Order dated 28.12.2007 under Section 143 (3) of the Act. Totally 4 issues arise for consideration in the instant case, the first of which pertains to sale of an undertaking called as Biax Division Unit II and whether it was slump sale or otherwise. The Assessing Officer held the transaction to be treated as a slump sale as per provisions of Section 50B of the Act. The second issue was with regard to the bad debts written off by the assessee. The Assessing Officer refused to allow the deduction sought for by the assessee on the ground that the assesse has not furnished the requisite information and the said amount was added to the total income of the assessee. The third issue is with regard to the compensation received from M/s. Batenfeld, UK whether it has to be treated as a capital receipt as claimed by the assessee in its return of income. The Assessing Officer held the compensation received is nothing but a specific amount which has been paid to the assessee to make good the price of the machine which has been paid by the assessee to Batenfeld and though the same is a capital receipt, but it has to be reduced fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... last issue namely, belated remittance of the employee s contribution to the Provident Fund Organization, the Tribunal referred to the decision of this Court in the case of CIT versus Vijay Shree Ltd., ITAT No. 245 of 2011 dated 07.09.2011 and held in favour of the assessee. Aggrieved by the conclusion arrived at by the Tribunal, affirming the order passed by the CIT (A) the revenue is before us by way of this appeal. 6. The substantial questions of law No. 1 to 3 deal with the slump sale issue. We have carefully gone through the order passed by the Assessing Officer and that of the CIT (A) and the Tribunal. The CIT (A) has minutely examined the business transfer agreement and noted that the unit was not sold as a going concern but the assets were sold as individual assets, the valuation has been done separately, the valuation of the land has been separately mentioned in the valuer s report and that the assessee has not transferred the undertaking with all the assets and liabilities. Further, all financial assets available with the assessee up to the date of transaction, were not transferred but retained by the assessee. Further, the assessee had assumed all the liabilities i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, denied relief to the assessee. The correctness of the said finding was considered by the CIT (A) and after noting that the entire amount of compensation would not reduce the actual cost of machinery and there is no dispute to the fact that the assessee had capitalised the full invoice value of machinery in its books of accounts and accordingly, claimed depreciations and noting the decision of the Hon ble Supreme Court in Sourashtra Cement Ltd. directed the Assessing Officer to restrict the disallowance of depreciation pertaining to 10% of the compensation received by the assessee which will go to reduce the cost of machinery, and for the remaining amount the assessee s case was accepted. With regard to the 10% of the amount which was directed to be restricted, the assessee was not an appeal before the Tribunal. The Tribunal after considering the findings recorded by the CIT (A) examined the settlement which was executed between the assessee and the UK Company which show that the compensation was given on account of non-achievement of performance parameters. After noting the relevant clauses in the settlement agreement, the Tribunal held that the condition specified in Section 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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