| COURT: |
|
| CORAM: |
|
| SECTION(S): |
|
| GENRE: |
|
| CATCH WORDS: |
|
| COUNSEL: |
|
| DATE: |
(Date of pronouncement) |
| DATE: |
October 22, 2009 (Date of publication) |
| AY: |
|
| FILE: |
|
| CITATION: |
|
|
|
No “succession of business” u/s 170 even on 100% sale of shares
S. 170 provides that where there is a “succession of business”, the predecessor has to be assessed in respect of the income upto the date of succession and the successor has to be assessed thereafter. 100% of the assessee’s shares were sold by the existing shareholders to another person. The CIT in revision took the view that the result of the said transfer of shares was that there was a “succession” and that the loss incurred prior to the date of succession could not be allowed to the “successor” assessee. The assessee’s appeal was allowed by the Tribunal. On appeal by the Revenue, HELD dismissing the appeal:
(1) The term “succession” in s. 170 has a somewhat artificial meaning. The tests of change of ownership, integrity, identity and continuity of a business have to be satisfied before it can be said that a person “succeeded” to the business of another;
(2) Even if it is accepted that by a transfer of shares u/s 2(47), there is a transfer in the right to use the capital assets of the company, still s. 170 is not attracted because there is no “transfer of business”. A company is a juristic person and owns the business. The share holders are not the owners of the company. By a transfer of the shares, there is no transfer so far as the company is concerned.
Related Posts:
- Boutique Hotels India (P) Ltd vs. ACIT (ITAT Delhi) It is not as if mistake of a legal advisor, however, gross and inexcusable, will entitle an assessee to condonation of delay in filing of appeal. The facts of the case are to be examined to ascertain if there had been negligence or gross want of skill, competence or knowledge…
- Ventura Textiles Ltd vs. CIT (Bombay High Court) Concealment of particulars of income was not the charge against the appellant, the charge being furnishing inaccurate particulars of income. As discussed above, it is trite that penalty cannot be imposed for alleged breach of one limb of Section 271(1)(c) of the Act while penalty proceedings were initiated for breach…
- Amazonite Steel Pvt. Ltd vs. UOI (Calcutta High Court) The failure to do the above is nothing short of being an act of highhandedness. Such actions of the authorities is an obloquy and reprehensible. No explanation has been provided for the same either in the affidavits filed in the earlier writ petitions or by counsel appearing on behalf of…
- Paradigm Geophysical Pty Ltd vs. CIT (Delhi High Court) If the nature of services rendered have a proximate nexus with the extraction of production of mineral oils, it would be outside the ambit of the definition of FTS. In the instant case, since the nature of services rendered by the Petitioner gets excluded from the definition of “FTS”, in…
- M/s. J. S. & M. F. Builders vs. A. K. Chauhan (Bombay High Court) According to the Assessing Officer, assessee had erred in offering to tax ‘capital gains’ in the year when the individual flats were sold whereas such ‘capital gains’ could be assessed to tax only when the land is trasferred to the co-operative society formed by the flat purchasers. If the assessee…
- PCIT vs. ITAT (Bombay High Court) The use of the expression “may” in the aforesaid provision is clearly indicative of the legislative intent that the limitation period of six months from the end of the month in which the order was passed is not to be construed in such a manner that there can not be…
Recent Comments