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6 Less : Brought 2,66,23,869 forward losses adjusted

7. Total income as 11,49,71,881 per Assessee's computation 2.3 During the course of scrutiny proceedings, the Assessee was asked to justify the valuation of business at a value fo Rs.1,10,00,000/-. In reply, the Assessee's AR stated that the sum of Rs.1.10 crores M/s.Ooty Gate Hotel.

is considered as business value because the total business was sold to buyers. As the total business was sold, the AR was asked to clarify the basis for valuation of the business at Rs.1.10 crores. The A R. replied that after considering the running loss and carry towards losses, the value of business was computed at Rs. 1.10 crores to set off the losses. Since, the Assessee sold its only income generating asset as a whole, the Assessee's AR was asked to explain as to why the above transaction should not be treated as slump sale with reference to section 2(42C) read with section 50B of Income Tax Act, 1961. Section 2(42C) which says that unless the context otherwise requires, the term, "slump sale" means 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. In reply, the AR. stated that no liabilities have taken over by the buyers and no liability was in existence at the time of sale of the Hotel and hence the formula prescribed under 50B is not applicable in this case.

"In the instant case, the items sold did not include liabilities. The sale agreement did not include investments and deposits. Accordingly, all the investments, deposits, receivables, stock and such other current assets in the form of financial and other assets remained with the assessee-company along with the liabilities. Only those assets which were enumerated in the Schedules and Annexures were sold to the vendee. Therefore, the instant case was one of the split sale and not a case of slump sale. Accordingly, we are of the view that in the instant case, the assessee had sold tea estate, excluding cash in hand, stock in hand, receivables, finance assets and liabilities. It was not a case of sale by lock, stock and barrel. The assessee had made conscious exclusions. The assets sold by the assessee had been listed out in different schedules and Annexures. The consideration had been specifically assigned to the sale of immovable property by way of Tea Estate. Separate consideration had been assigned to the sale of movable properties including vehicles and properties. Therefore it was not a case of slump sale for a lump sum amount of consideration. Further, as all the assets and liabilities had not been sold as per the agreement, this was not a slump sale as construed in Section 50B of the Act. Accordingly, in view of the above facts of this case and position of law discussed in various case laws of different Hon'ble Courts, we are of the view that the sale or Nagrijuli Tea Estate was not a slump sale within the meaning of section 2(42C) of the Act read with Section 50B of the Act, and therefore, not even assessable to capital gains. Accordingly, we uphold the order of CIT(A) and the issue of Revenues' appeal M/s.Ooty Gate Hotel.

submitted a brief written submission and the same reads as follows:-

The learned CIT (A) is right in holding in Assessee's favor, that the learned AO erred in law and facts, in considering the sale of land and building of a Hotel as a "slump sale" and in invoking the special provision of Section.50B for computation of its' capital gain, instead of the regular provisions of Section 48 and Section 50 on the following reasons:-

A. The sale of land and hotel building of the appellant will not come within the meaning of "slump sale" defined u/s.2 (42C) since "assets and liabilities" are not transferred, but only "assets" are transferred. In other words, what is transferred is "assets" only and' not "assets and liabilities" as contemplated in the definition of "slump sales". Vide Page 9 Para 3 and Page 15 of the Copy of the Sale Deed executed on 18.01.2013 enclosed. (Page 30 to 46)

PRAYER For the above grounds and such other grounds that may be urged at the time of hearing, it is prayed that the appeal of the Department may kindly be dismissed."

4. We have heard the rival submissions and perused the material on record. The solitary issue for our consideration is whether the sale deed executed on 18.01.2013 as regards the land and building of hotel was a `slump sale' governed by the provisions of section 50B of the I.T.Act or not? `Slump sale' is a sale of an undertaking as a going concern. The concept of slump sale is not new for purposes of income-tax law, though a special procedure has been prescribed for computation of income from slump sale under section 50B, with effect from 1.4.2000 i.e. A.Y. 2000-2001. In the case of Doughty v. Taxes Commissioner [(1927) AC 327 (PC)], the English Court had M/s.Ooty Gate Hotel.