Calcutta High Court
Principal Commissioner Of Income Tax vs M/S. Tongani Tea Company Limited on 29 June, 2018
Author: Sanjib Banerjee
Bench: Sanjib Banerjee
O-189
GA No. 2147 of 2016
ITAT NO. 203 of 2016
IN THE HIGH COURT AT CALCUTTA
Special Jurisdiction (Income Tax)
ORIGINAL SIDE
PRINCIPAL COMMISSIONER OF INCOME TAX, KOLKATA-2, KOLKATA
Versus
M/S. TONGANI TEA COMPANY LIMITED
BEFORE:
The Hon'ble JUSTICE SANJIB BANERJEE
The Hon'ble JUSTICE ABHIJIT GANGOPADHYAY Date : 29th June, 2018.
Appearance:
Mr. Prithu Dudheria, Adv.
Mr. J. P. Khaitan, Sr. Adv.
The Court : The substantial question of law that the Revenue seeks to raise in this appeal is as to the circumstances in which the sale of an entire undertaking can be regarded as a slump sale. The Assessing Officer found that in course of the sale of a tea estate by the assessee, the land and the agricultural part of the business was given a particular value and all other assets of the tea estate were given another combined value and the Assessing Officer perceived the 2 sale to be a slump sale where the entire undertaking was perceived to have been sold without any itemization.
In course of the assessee's appeal before the Commissioner (Appeals), the Commissioner (Appeals) not only discovered that some of the liabilities pertaining to the tea estate had not been transferred to the transferee, but also that the sale consideration was reduced from the written down value of the block of depreciable assets and disclosed as deemed short-term capital gain under Section 50 of the Income Tax Act, 1961. The Commissioner (Appeals) also found that in the valuation report and the books of accounts, specific values were consciously assigned to specific classes of assets by the parties to the transfer and the quantum of profit was also separately worked out on the transfer of agricultural land and plantation. The assessee disclosed the profits separately because plantation land was not a depreciable asset. The valuer found the value of the land and plantation to be about Rs.12.20 crore. The cost of such land and plantation in the assessee's books was about Rs.6.97 crore. A profit of about Rs.5.23 crore was disclosed on the transfer which was separately provided for in the balance-sheet as agricultural development reserve. On the Commissioner's detailed inquiry as to the manner in which the sale was conducted, the Commissioner (Appeals) was satisfied that it was not a slump sale. The Commissioner (Appeals) referred to several judgments; but at the end of the day, it was a pure consideration on facts and it is such factual finding which has been endorsed by the Appellate Tribunal in the judgment and order impugned dated November 6, 2015. Even though the Assessing Officer found that a certain value had been attributed to the land and plantation and another value attributed to 3 the plant, machinery, buildings and non-agricultural assets, the Commissioner (Appeals) found the break-up backed by valuation reports and the like.
In the light of the inquiry on facts conducted by the Commissioner (Appeals) and his finding on such score and such finding being upheld by the Appellate Tribunal, there is no real question of law that has been raised.
ITAT No.203 of 2016 and GA No.2147 of 2016 are dismissed. There will be no order as to costs.
(SANJIB BANERJEE, J.) (ABHIJIT GANGOPADHYAY, J.) kc