Advocate Akhilesh Kumar Sah
Bennett Coleman & Co. case: where the consideration was not money but equity shares and debentures, the transaction was not a “Sale” but an “Exchange”, the provisions of Section 50B were not applicable
Section 50B of the Income Tax Act, 1961(for short ‘the Act’) deals with the capital gains in the case of slump sale.
Very recently, in Bennett Coleman & Co. Ltd vs. ACIT & vice-versa [ITA No.3298/M/2012 and ITA No.3537/M/2012, A.Y.: 2008-09, decided on 08.01.2018], one of the issue raised by the assessee-company was against the upholding of order of AO by CIT(A) on the issue of transfer of Planet M division of the company in consideration of equity shares and 6% redeemable unsecured debentures being slump sale and therefore liable to tax under section 50B of the Act.
The facts in brief were that the company has w.e.f 1 st November 2007 hived off its business of Planet M division consisting of leisure and retail products, on a going concern basis and transferred it to Planet M Retail Ltd. (‘PMRL’), then wholly owned subsidiary of the company on a slump exchange basis. The company had been allotted the following scripts amounting to Rs.12595 lacs for transfer of this business:
