Assessee computed capital gains excluding the amount kept in Escrow account and contended that unless and until escrow amount was released by escrow agent, amount lying in escrow account could not be considered for computing capital gains. AO considered entire consideration as per agreement is liable to capital gains which was affirmed by the CIT(A). On appeal Tribunal held that since consideration was mentioned in slump sale agreement, segregating such consideration into two parts cannot be done and entire consideration was to be considered as capital gain arose during year. ( AY.2012-13)
T.A. Taylor (P.) Ltd. ACIT (2018) 173 ITD 237/66 ITR 146 (Chennai) (Trib.)
S. 50B : Capital gains–Slump sale-Part consideration was kept in Escrow account which was received in subsequent year-segregation of consideration in to two parts is held to be not justified – Depositing a part of the consideration in an escrow account will not be, equivalent to a deferred consideration-.Entire consideration is taxable in the year of sale. [S. 45]