2024 (8) TMI 551
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.... holding that AO was not justified in assessing the income at Rs. 3,28,18,270/- by treating long term capital gain u/s. 50B of the IT Act at Rs. 3,94,44,635/- on sale of assets without appreciating that the Assessing Officer has computed the capital gains treating the sale as 'slump sale' after verifying the factual matrix and the computation thereunder was based following the decision of Hon'ble ITAT's Special Bench, Mumbai in the case of DCIT vs. Summit Securities Ltd. Reported in (2012) 135 ITD 99. (ii) Whether on the facts and circumstances of the case, the CIT (A) was right in treating that the sale was not "slump sale" thereby accepting the Long Term Capital Gains computed without applying the provisions of sec. 50C of the I.T. Act, 1961. (iii) Any other ground that may arises at the time of hearing." 4. The proceeding of the present appeal before us is the second round of appeal. 5. Facts in brief:- The assessee is a Company incorporated under the Companies Act, 1956, which is also registered on 23/04/1992, with Registrar of Companies with authorised capital of Rs. 1 crore. The return of income for the year under consideration was filed on 29/11/2006, d....
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....l gain at Rs. 3,94,44,635, under section 50B of the Act treating the sale as slump sale. Accordingly, the Assessing Officer assessed the income of the assessee at Rs. 3,26,18,270, as against the income assessed originally at Rs. 3,44,36,161. The assessee once again being aggrieved by the order so passed by the learned CIT(A), is in appeal before the learned CIT(A). 7. The learned CIT(A) allowed the claim of the assessee by observing as follows:- "4. Appellant's submissions along with assessment order and records have been considered carefully. The undisputed fact remains that the appellant's assets have been mortgaged with Nagpur Nagari Sahakari Bank Ltd. (hereafter referred as the Bank) and that a sum of Rs. 3,12,41,365/- comprising of principal and interest calculated upto 30.06.2003 has remained outstanding. In fact, vide application No. 45/2003, dated 28.07.2003, the Bank has filed before Debts Recovery Tribunal, Nagpur to sell and auction all immovable properties of the appellant for realisation of its dues. Before this, vide public notice dated 17.07.2002 given in Nav Bharat Newspaper, the Bank has informed general public of its first charge on the aforesaid assets....
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....A.O. and above mentioned facts by appellant before A.Ο. do not support the revised claims of the appellant before appeal proceedings that it is a slump sale. One more word of caution here is that now in appeal, appellant has furnished the CA's certificate purportedly u/s 508 sub section (3). a) firstly it is undated (probably just to pass it as if net worth was derived at the time of assessment. b) secondly it says that it is calculating "net worth of undertaking on 31.03.2006. This certificate has been furnished on 12.03.2012 before me. It is not clear how a certificate of "net worth" can be drawn without taking into consideration liabilities as per submission of appellate before A.O. which makes it very clear that certain assets have been retained by the appellant and hence it is not a slump sale at all. Also appellant has assigned specific value to assets sold and as per Annexure-I to Audit Report." 4.4 In the impugned order under appeal, AO has applied provisions of section 50B by relying on this very certificate / Form No. 3CEA and by simply mentioning in the assessment order, as under, while reproducing his notice and appellant's reply thereto for ....
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....orth (Rs. 93,44,635) Long term capital gains on slump sale u/s 50B of the Act Rs. 3,94,44,635 4.5 It is seen from above that on same set of facts both the appellant as well as AO have been taking varying stance in original assessment and appeal proceedings and in the assessment proceedings under appeal. The appellant has taken plea of 'slump sale' before the then FAA which has not been accepted by him. Then Hon'ble ITAT has set aside the matter with direction to AO to ascertain the factual matrix of the case considering the provisions of section 50C(2). Thereafter, in reassessment and appeal proceedings, the appellant has denied of having made any slump sale but AO has treated it as such, though without giving any reasons/ justification for the same. 4.6 After perusal of entire material on records, relevant provisions of IT Act and keeping in view Court's decisions, the impugned sale of assets, in my considered opinion, is not a slump sale. Though these assets have been sold through registered deed and not through any public auction, but their sale consideration has been arrived at after due consideration of their valuation, mortgaged value, WDV, the Bank&#....
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....Explanation 1.-For the purposes of this clause, "undertaking" shall have the meaning assigned to it in Explanation 1 to clause (19AA). Explanation 2.-For the removal of doubts, it is hereby declared that the determination of the value of an asset or liability for the sole purpose of payment of stamp duty, registration fees or other similar taxes or fees shall not be regarded as assignment of values to individual assets or liabilities. 23[Explanation 3.-For the purposes of this clause, "transfer" shall have the meaning assigned to it in clause (47);]" Section 50B Special provision for computation of capital gains in case of depreciable assets. 50. Notwithstanding anything contained in clause (42A) of section 2, where the capital asset is an asset forming part of a block of assets in respect of which depreciation has been allowed under this Act or under the Indian Income-tax Act, 1922 (11 of 1922), the provisions of sections 48 and 49 shall be subject to the following modifications :- (1) where the full value of the consideration received or accruing as a result of the transfer of the asset together with the full value of such consideration received or accruing as a result ....