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6. The entire gamut of the controversy can be summed up as follows :- In the present case the sale consideration of the PTB is `143 crore and there is negative `net worth' of `157 crore as per section 50B, that is, the value of liabilities (`1517 crore) as per the books of accounts is in excess of the aggregate value of assets (`1360 crore). Whereas the case of the assessee is that the capital gain should be computed at `143 crore by adopting the figure of sale consideration at `143 crore and that of net worth as per section 50B at `Nil, the Revenue is pleading that the capital gain be computed at `300 crore by either taking the sale consideration at `300 crore (`143 crore plus `157 crore) [Ground no. 1] or by taking the amount of sale consideration at `143 crore but adding to it the negative net worth of `157 crore [Ground no. 2].

(e) Sub-section (2) of section 50B makes it abundantly clear that the undertaking or division as a whole is considered as one capital asset and the net worth of this capital asset is considered as cost of acquisition and cost of improvement for the purposes of sections 48 and 49. Therefore, it Cyfast Enterprises Pvt. Ltd.

becomes patent that section 50B is a code in itself only for the determination of cost of acquisition and cost of improvement of the undertaking but not for the computation of capital gains in case of slump sale. The object of section 50B is to simply determine and supply the figure of cost of acquisition and cost of improvement of the undertaking to section 48 which eventually computes the amount of capital gain u/s

17.11.2 We are not inclined to accept this submission. It is patent that the words "net worth" and "cost" have not been given any meaning for the purposes of section 50B. At the same time it equally relevant to note that these words have been used in the context of "undertaking" which itself refers to the `All assets minus All liabilities' of the undertaking. Section 50B contemplates the computation of "cost of acquisition and cost of improvement" of the "undertaking" as one unit which does not restrict itself to the bundle of assets but also includes within its ambit "the liabilities of such undertaking or unit or division". The contention on behalf of the assessee that cost of an asset cannot be in negative is though true in a general sense but fails in the context of the capital asset referred to in section 50B as `Undertaking'.

(v) The words `as reduced by' pre-suppose that preceding figure is higher than the succeeding 17.15.1 The ld. AR contended that Explanation 1 to section 50B provides that the net worth `shall be the aggregate value of total assets of the undertaking or division as reduced by the value of liabilities of such undertaking as appearing in the books of account'. He emphasized on dictionary meaning of the word "reduced" as referring to "diminish in size, amount, extent or number : make smaller". As the word `reduce' refers "to bring down", the learned AR contended that "the value of liabilities" can only bring down the "aggregate value of the total asset" as per Explanation 1 to section 50B. In his opinion unless the "value of liabilities" is less than "the aggregate value of total asset", the computation of the net worth will not be possible. The sum and substance of his submissions was that in case the "value of liabilities" is more than "the aggregate value of the total asset" then such value of liabilities should be restricted to the aggregate value of total assets thereby giving the amount of net worth at ` Nil. He also took us through Clause no. 315 of the Direct Tax Code Bill, 2010 which provides that any direction for aggregation of two or more items shall be construed also to include a direction for aggregation of negative and positive amounts in all their combinations. It was suggested that since the Income-tax Act, 1961 does not contain any provision similar to that of clause 315 of Direct Tax Code Bill, 2010, the words `reduced by' should be understood as having Nil value where the value of liabilities is in excess of the aggregate value of the assets of the undertaking.