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slump sale in power sector ?

Tax queries 579 views 2 replies

Can You please tell whether can the concept on Balancing charge/terminal depreciation apply if slump sale takes place in power sector undertaking and in slump sale of factory were the work of power generation takes place.  Please help .

 

Thanks in advance to all  

Replies (2)

Dear Mohit,

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.

Whereas the question of terminal deprecciation or Balancing charge would arise only when sales consideration of individual assets are known..

So it cannot be applied in case of slump sale..

Further Bhai, it would not be beneficial for the assessee to effect slump sale in case of Power Generating Units becos in case of slump sale "Benfit of Indexation is not available" whereas if capital gains are computed u/s 50A then "Indexation can be done"

thanks amir you have great thinking power


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