| COURT: | Delhi High Court |
| CORAM: | S. Muralidhar J, Vibhu Bakhru J |
| SECTION(S): | 43(6)(c), 50B |
| GENRE: | Domestic Tax |
| CATCH WORDS: | Block of Assets, capital gains, Depreciation, slump sale |
| COUNSEL: | Ajay Vohra |
| DATE: | January 6, 2016 (Date of pronouncement) |
| DATE: | January 25, 2016 (Date of publication) |
| AY: | 2001-02 |
| FILE: | Click here to view full post with file download link |
| CITATION: | |
| S. 50B/43(6)(c): In computing the net worth for computing capital gains from a slump sale, depreciation on assets have to be deducted even if not claimed by the assessee | |
Plainly, the purpose of clause (a) of Explanation 2 to Section 50B of the Act is to provide a methodology to compute the written down value of the block of assets transferred by an Assessee as a part of the undertaking or division sold by way of a slump sale. The reference to Clause C is clearly not for the purposes of computing the block of assets remaining with the Assessee after the slump sale. It is apparent from the above that the intended object and scope of Clause C as used in Section 50B of the Act is totally different than the purpose of the said provision when read as a part of Section 43 of the Act. In the circumstances, clause (a) of Explanation 2 to Section 50B of the Act must be read in a manner to expressly include the computation provisions of Clause C without reference to other the import of the said provisions of Section 43 of the Act. In our view, the ITAT fell into error in importing the interpretation of Clause C read as a part of Section 43 of the Act, to interpret the scope of clause (a) of Explanation 2 to Section 50B of the Act
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