Whether the amount of liabilities taken over in case of slump purchase are to be considered for reaching at the amount of assets taken over for the value of purchase consideration ?

Whether the amount of liabilities taken over in case of slump purchase are to be considered for reaching at the amount of assets taken over for the value of purchase consideration ?

Yes, the Hon’ble Tribunal has decided on facts, by giving a factual finding that the amount of liabilities taken over in case of slump purchase are to be considered for reaching at the amount of assets taken over for the value of purchase consideration. In the instant case, the assessee had made a slump purchase and acquired a certain amount of liabilities along with the specific leased assets. The AO by not considering the amount of liabilities taken over mentioned the said assets as unexplained investments as per section 69 of the Income Tax Act, 1961. On appeal by department before Delhi High Court, the Hon’ble Delhi High Court has dismissed the appeal considering the fact as no question of law arises in the given case.

HIGH COURT OF DELHI

Judgment delivered on: 01.04.2013

ITA 607/2012

COMMISSIONER OF INCOME TAX
versus

ARADHANA DRINKS & BEVERAGES PVT. LTD.

JUDGMENT

BADAR DURREZ AHMED, J (ORAL)

1. This appeal by the revenue is directed against the order dated 21.04.2011 passed by the Income Tax Appellate Tribunal, New Delhi in ITA No.3139/Del/2007 pertaining to the assessment year 2004-05. The assessing officer had made an addition of `22.58 crores under section 69 of the Income Tax Act, 1961 on account of alleged unexplained investment. It was the case of the revenue that while the respondent/ assessee had disclosed that it had paid a sum of `41 .80 crores, in fact, it had purchased assets worth `64.38 crores and, therefore, there was an unexplained investment of `22.58 crores (`64.38 crores minus Rs. 41 .80 crores).