Case Law Details
CIT Vs Shiva Distilleries Limited (Madras High Court)
The issue under consideration is whether ITAT was right in law in holding Section 50B i.e. slump sale was not applicable in present case of assessee?
In the present case, the Assessing Officer issued the notice for reopening the assessment on the ground that the holding company ceased to hold whole of the share capital of the subsidiary company, the exemption granted has to be withdrawn as per provision of Section 47A of the Act. It is further stated that the original sale of the textile unit has to be treated as transfer and net worth has to be subjected to capital gains treating this transactions as a slump sales as per provisions of Section 50B of the Act.
High Court states that, the assets were transferred at their book value and the liabilities of the Division was also taken at book value. As per Section 2(42C) of the Act “Slump Sale” has to be defined to mean the transfer of one or more undertaking as a result of the sale for lumpsum sale without values being assigned to the individual assets and liabilities in such sales. It was further stated that in the assessee’s case, the transfer price was based on the individual assets and liabilities of the undertaking transferred and the sale would not qualify as “Slump Sale” as per Section 2(42C) of the Act. Hence, it is decided that Section 50B will not be applicable in assessee’s case. Accordingly appeal filed by the assessee dismissed.
FULL TEXT OF THE HIGH COURT JUDGEMENT
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