Slump sale
This query is : Resolved
26 December 2011
Where land and building are sold in slump sale, can sec 50C be invoked by Income Tax Offices????
26 December 2011
In case land & building are forming part of the undertaking being sold with other assets, separate consideration for these capital assets is not required to be mentioned.
Profit arising in case of slump sale is considered U/s 50B.
As specific provision for slump sale has been prescribed under the act, Section 50B will become applicable.
.
If land & building only is transferred, by showing there composite or individual valuation, this will not be treated as sale of an undertaking. It will not be the case of slump sale. In such a case 50C would be applicable.
Profit arising in case of slump sale is considered U/s 50B.
As specific provision for slump sale has been prescribed under the act, Section 50B will become applicable.
.
If land & building only is transferred, by showing there composite or individual valuation, this will not be treated as sale of an undertaking. It will not be the case of slump sale. In such a case 50C would be applicable.
Message likes :
1 times
26 December 2011
In case land & building are forming part of the undertaking being sold with other assets, separate consideration for these capital assets is not required to be mentioned.
Profit arising in case of slump sale is considered U/s 50B.
As specific provision for slump sale has been prescribed under the act, Section 50B will become applicable.
.
If land & building only is transferred, by showing there composite or individual valuation, this will not be treated as sale of an undertaking. It will not be the case of slump sale. In such a case 50C would be applicable.
Profit arising in case of slump sale is considered U/s 50B.
As specific provision for slump sale has been prescribed under the act, Section 50B will become applicable.
.
If land & building only is transferred, by showing there composite or individual valuation, this will not be treated as sale of an undertaking. It will not be the case of slump sale. In such a case 50C would be applicable.
27 December 2011
Thanks a lot. in my case land and building have been sold along with many other fixed assets like machinery etc. Can you or anyone else please provide some case laws on this if any.
28 December 2011
Section 50B is a specific provision dealing with Slump Sale. If Land & /or building 's sales consideration is separated from the Total Consideration of slump sale, then section 50B will become in applicable. In that case it can be argued that undertaking has not been sold for a single consideration.
.
Section 50 B prescribes that in the case of slump sale , for computing capital gains, net worth has to be subtracted from the sales consideration. Net worth has also been duly defined. If you bring out land & Building from the net worth (so as to apply 50C) then the very purpose of Section 50B is defeated by doing so.
.
Section 50C deals with the transfer of capital assets being land &/or Building (or both). It has a fiction as regards to the sales consideration. It should be understood to be having limited application in the transfer matters of L&B only. It has no overriding effect over section 50B. Section 50B and Section 45 are charging sections.
.
So in my view, section 50C can not be invoked by the AO where capital gains have been computed U/s 50B.
Had it been done, the very purpose of enacting Section 50B would be defeated.
.
Section 50 B prescribes that in the case of slump sale , for computing capital gains, net worth has to be subtracted from the sales consideration. Net worth has also been duly defined. If you bring out land & Building from the net worth (so as to apply 50C) then the very purpose of Section 50B is defeated by doing so.
.
Section 50C deals with the transfer of capital assets being land &/or Building (or both). It has a fiction as regards to the sales consideration. It should be understood to be having limited application in the transfer matters of L&B only. It has no overriding effect over section 50B. Section 50B and Section 45 are charging sections.
.
So in my view, section 50C can not be invoked by the AO where capital gains have been computed U/s 50B.
Had it been done, the very purpose of enacting Section 50B would be defeated.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Relief Calculation u/s 89 of ITax 1961 in TableA Form10E
- Regarding E-invoice Generation
- Forgot to update debit note in gst
- Can we claim ITC in 28%
- Wrongly goods delivered to other state
- Applicability of RCM on Frieght Inward supplies received from un-registered person
- Conversion of Pvt Ltd Company to a LLP
- Query Regarding Income Tax Rate on Gain from Transfer of Partnership Stake (LLP Partner)
- CA Final exam Form
- Can we issue an invoice today
- Foreign commission liable for rcm
- Loans and borrowing
- Registration of partnership firm maharashtra
- Tds on GST in connection with sale to public company
- B2B Amendment
- Restoration of certificate of practice
- Regarding change in correspondence address in SSP portal
- Regarding Advance Tax not claimed in the Return of Income for A.Y. 2025-26
- No Compliences after incorporation
- USEFUL LIFE OF USED/SECOND HAND COMMERCIAL VEHICLES
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
CAclubindia
