The Tax Publishers2020 TaxPub(DT) 3689 (Mad-HC) : (2020) 428 ITR 0001 : (2020) 317 CTR 0633

INCOME TAX ACT, 1961

Section 50B

Transfer, pursuant to approval of a scheme of arrangement, was not a contractual transfer, but a statutorily approved transfer and could not be brought within the definition of word 'sale' and accordingly a 'slump sale' exigible to capital gain tax under section 50B.

Capital gains - Slump sale - Transfer of business pursuant to approval of a scheme of arrangement -

Question arose for consideration was whether transfer of assessee's non transmission and distribution business valued at Rs. 41.3 Crores in exchange of issuance and allotment of equity shares under a scheme of arrangement approved by High Court under sections 391 and 393 of Companies Act, 1956 was a 'slump sale' exigible to capital gain tax under section 50B. Held: Transfer, pursuant to approval of a scheme of arrangement, was not a contractual transfer, but a statutorily approved transfer and could not be brought within the definition of word 'sale' and accordingly a 'slump sale' exigible to capital gain tax under section 50B.

Relied:State of Madras v. Gannon Dunkerley & Co. (Madras) Ltd. 1959 SCR 379.

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2006-07

IN THE MADRAS HIGH COURT

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