Court-approved Schemes vs. ‘Slump Sale’ after Finance Act 2021–22: Legal Faultline and Practical Tax Planning

Grasim Industries Ltd. Vs DCIT (ITAT Mumbai) Court-Approved Schemes vs. “Slump Sale” after the Finance Act 2021-22: Legal Faultlines and Practical Tax Planning The Income Tax Appellate Tribunal (“ITAT”), Mumbai, in Grasim Industries Ltd. v. DCIT (ITA No. 2224/Mum/2016, decided on 23 May 2025), revisited a fundamental question in corporate tax law: whether a transfer of an undertaking under a court-approved scheme of arrangement constitutes a “slump sale” within the meaning of Section 2(42C) read with Section 50B of the Income-tax Act, 1961 (“the Act”). This issue, though seem...