{"id":7220,"date":"2013-09-20T09:36:16","date_gmt":"2013-09-20T04:06:16","guid":{"rendered":"http:\/\/itatonline.org\/archives\/?p=7220"},"modified":"2013-09-20T09:36:16","modified_gmt":"2013-09-20T04:06:16","slug":"ito-vs-zinger-investments-p-ltd-itat-hyderabad-s-50b-transfer-of-assets-via-amalgamation-without-monetary-consideration-is-not-a-slump-sale","status":"publish","type":"post","link":"https:\/\/itatonline.org\/archives\/ito-vs-zinger-investments-p-ltd-itat-hyderabad-s-50b-transfer-of-assets-via-amalgamation-without-monetary-consideration-is-not-a-slump-sale\/","title":{"rendered":"ITO vs. Zinger Investments (P) Ltd (ITAT Hyderabad)"},"content":{"rendered":"\n\n
Click here to download the judgement (Zinger_Slump_Sale_50B.pdf) <\/strong> <\/a><\/p><\/td>\n<\/tr>\n<\/table>\n


\nS. 50B: Transfer of assets without monetary consideration is not a “slump sale”<\/strong> <\/p>\n

The assessee transferred its manufacturing division to Novapan Industries Ltd under a scheme of amalgamation pursuant to which Novapan transferred investments worth Rs. 25.24 crore to the assessee and allotted shares worth Rs. 6.81 crore to the assessee\u2019s shareholders. There was no monetary consideration. The AO held that the transfer of the manufacturing division was a \u201cslump sale<\/em>\u201d and that it attracted s. 50B. He computed capital gains on that basis. The CIT(A) reversed the AO and held that there was no slump sale. On appeal by the department to the Tribunal HELD dismissing the appeal: <\/p>\n

S. 2(42C) defines a \u2018slump sale<\/em>\u2019 to mean the transfer of one or more undertakings as a result of the sale for a lump sum consideration without values being assigned to the individual assets and liabilities in such sales. A plain reading of s. 2(42C) makes it clear that to qualify as a slump sale, two conditions have to be satisfied viz., (i) there must be transfer of one or more undertakings as a result of sale and (ii) the sale should be for a lump sum consideration without values being assigned to the individual assets and liabilities. The presence of money consideration is an essential element to a transaction of sale. If the consideration is not money but some other valuable consideration it may be an exchange or barter but not a sale. In the present case, as no monetary consideration was received by the assessee for transfer of the assets and liabilities of the manufacturing division to Novapan Industries Ltd, the transaction is not a \u201cslump sale\u201d and does not attract s. 50B (Motors and General Stores<\/strong> 66 ITR 692 (SC), R.R. Ramakrishna Pillai<\/strong> 66 ITR 725 & Avaya Global Connect<\/a><\/strong> 26 SOT 397 (Mum) followed)<\/p><\/blockquote>\n

For more see S. 50B & Capital Gains On Slump Transactions: A Comprehensive Analysis<\/a><\/strong> & Bharat Bijlee<\/strong><\/a><\/div>\n","protected":false},"excerpt":{"rendered":"


\nS. 50B: Transfer of assets via amalgamation without monetary consideration is not a “slump sale”<\/strong> <\/p>\n

S. 2(42C) defines a \u2018slump sale<\/em>\u2019 to mean the transfer of one or more undertakings as a result of the sale for a lump sum consideration without values being assigned to the individual assets and liabilities in such sales. A plain reading of s. 2(42C) makes it clear that to qualify as a slump sale, two conditions have to be satisfied viz., (i) there must be transfer of one or more undertakings as a result of sale and (ii) the sale should be for a lump sum consideration without values being assigned to the individual assets and liabilities. The presence of money consideration is an essential element to a transaction of sale. If the consideration is not money but some other valuable consideration it may be an exchange or barter but not a sale. In the present case, as no monetary consideration was received by the assessee for transfer of the assets and liabilities of the manufacturing division to Novapan Industries Ltd, the transaction is not a \u201cslump sale\u201d and does not attract s. 50B (Motors and General Stores<\/strong> 66 ITR 692 (SC), R.R. Ramakrishna Pillai<\/strong> 66 ITR 725 & Avaya Global Connect<\/a><\/strong> 26 SOT 397 (Mum) followed)<\/p>\n

Read more ›<\/a><\/div>\n

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