News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
From the Courts »
 ADIT (E), Inv. Circle (1), New Delhi. Vs. India Trade Promotion Organisation, Pragati Bhawan, Pragati Maidan, New Delhi – 110 001.
 Smt. Suman Lakhani, W-9, G.K.-II, New Delhi-110048. vs. ACIT, Circle-II, Faridabad.
 M/s. Basics IT Solutions Pvt. Ltd. G-2, Nizamuddin West, New Delhi-110013 Vs. ACIT Circle – 4 (1) New Delhi
 Shri Naresh Kumar, Village-Sultanpur, Sector- 127, Distt. G.B. Nagar, Noida. Uttar Pradesh. Vs. The Income Tax Officer, Ward – 2(3), Noida.
 Shri Sandeep Gupta, 1476, Sector-14, Faridabad, Haryana. PIN – 121 001. Vs. The Income Tax Officer, Ward – 1(1), Faridabad, Haryana.
 M/s. ACE Insurance Brokers Pvt. Ltd., B – 17, Ashadeep Building, 9, Hailey Road, New Delhi – 110 001. Vs. ACIT, Circle 1, New Delhi.
 Asstt. Commissioner of Income Tax, Central Circle-23, New Delhi-110055 Vs. Druzba Overseas Pvt. Ltd., M-11, Middle Circle, Connaught Circus, New Delhi-110001
  ACIT, Central Circle -08 (Now CC- 17), New Delhi. Vs. Sh. Sumit Khaneja, H. No. 2, 23, Central Drive DLF, Chattarpur Farms, New Delhi.
 ACIT, Central Circle -08 (Now CC- 17), New Delhi. Vs. Sh. Sumit Khaneja, H. No. 2, 23, Central Drive DLF, Chattarpur Farms, New Delhi.
 Krishna Devi H. No. 823, Palam Vihar More, Bijwasan, New Delhi-110061 Vs. ACIT Circle-44(1), New Delhi
  M/s. S. Gurcharan Singh & Sons Vs. Commissioner Trade & Taxes & Ors.

CIT vs. Equinox Solution Pvt. Ltd (Supreme Court)
April, 29th 2017

The assessee claimed that as it had sold their entire running business in one go with its assets and liabilities at a slump price, the provisions of Section 50 (2) of the Act could not be applied to such sale. It was claimed that it was not a case of sale of any individual or one block asset which may attract the provisions of Section 50 (2) of the Act. It was also claimed that that since the undertaking itself is a capital asset owned by the assessee nearly for six years and being in the nature of long term capital asset and the same having been sold in one go as a running concerned, it cannot be termed a “short terms capital gain” so as to attract the provisions of Section 50 (2) of the Act as was held by the Assessing Officer. This plea was upheld by the e CIT (Appeals), Tribunal and the High Court. On appeal by the department to the Supreme Court HELD dismissing the appeal:

(i) In our considered opinion, the case of the respondent (assessee) does not fall within the four corners of Section 50 (2) of the Act. Section 50 (2) applies to a case where any block of assets are transferred by the assessee but where the entire running business with assets and liabilities is sold by the assessee in one go, such sale, in our view, cannot be considered as “short-term capital assets”. In other words, the provisions of Section 50 (2) of the Act would apply to a case where the assessee transfers one or more block of assets, which he was using in running of his business. Such is not the case here because in this case, the assessee sold the entire business as a running concern.

(ii) As rightly noticed by the CIT (appeal) that the entire running business with all assets and liabilities having been sold in one go by the respondent-assessee, it was a slump sale of a “long-term capital asset”. It was, therefore, required to be taxed accordingly.

(iii) Our view finds support with the law laid down by this Court in Commissioner of Income Tax, Gujarat vs. Artex Manufacturing Co. [1997(6) SCC 437 CIT].

(iv) In Premier Automobiles Ltd. vs. Income Tax Officer & Anr., 264 ITR 193 (Bombay) also, the Division Bench of the Bombay High Court examined this question in detail on somewhat similar facts and has taken the same view. The Learned Judge S.H Kapadia – (as His Lordship then was as Judge of the Bombay High Court and later became CJI) speaking for the Bench aptly explained the legal position to which we concur as it correctly summarized the legal position applicable to such facts.

(v) Learned Counsel for the appellant (Revenue) was not able to cite any decision taking a contrary view nor was he able to point out any error in the decisions cited at the Bar by the assessee’s counsel referred supra.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2019 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Software Work Flow Workflow Software Software Automation Workflow automation Software Design Workflow Design Business Work Flow Workflow automation tools

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions