ITO, Ward-3(2), Hyderabad V. M/s Zinger Investments Private Limited, Secunderabad

ITA 275/HYD/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4835 (ITAT-HYDERABAD)
• Duration Of Justice: 5 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 04-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M H NAIK
• Assessee Lawyers: INTURI RAMA RAO
• Keywords: Cost of acquisition; Scheme of amalgamation
• Section: 143(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA.NO.275/HYD/2013 ASSESSMENT YEAR 2007-2008 THE ITO, WARD 3(2) HYDERABAD VS. M/S. ZINGER INVESTMENTS (P) LTD. SECUNDERABAD PAN AABCG9751C (APPELLANT) (RESPONDENT) FOR APPELLANT : SHRI M.H. NAIK (DR) FOR RESPONDENT : SHRI INTURI RAMA RAO (AR) DATE OF HEARING : 12.06.2013 DATE OF PRONOUNCEMENT : 21.08.2013 ORDER PER SAKTIJIT DEY, J.M. THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORD ER OF THE CIT(A)-IV, HYDERABAD DATED 10.12.2012 FOR THE ASSESS MENT YEAR 2007-2008. 2. BRIEFLY THE FACTS ARE THAT THE ASSESSEE-COMPANY EA RLIER KNOWN AS M/S. GVK NOVAPAN INDUSTRIES PVT. LTD. IS A PRIVA TE LIMITED COMPANY. FOR THE IMPUGNED ASSESSMENT YEAR, THE ASSESS EE FILED ITS RETURN OF INCOME DECLARING NIL INCOME. INITIALLY, TH E RETURN WAS PROCESSED UNDER SECTION 143(1) ON 05.02.2009. SUBSE QUENTLY, ACTION WAS INITIATED UNDER SECTION 147 OF THE ACT BY ISSUIN G A NOTICE UNDER SECTION 148 CALLING UPON THE ASSESSEE TO SUBMIT A R ETURN OF INCOME. IN RESPONSE TO SUCH NOTICE, THE ASSESSEE FILED A LE TTER DATED 30.12.2010 REQUESTING THE ASSESSING OFFICER TO TREA T THE RETURN FILED ORIGINALLY AS A RETURN IN RESPONSE TO THE NOTICE UND ER SECTION 148 OF THE ACT. IN THE COURSE OF ASSESSMENT PROCEEDINGS, T HE ASSESSING 2 OFFICER NOTICED THAT DURING THE YEAR UNDER DISPUTE, THE ASSESSEE HAD TRANSFERRED ITS MANUFACTURING DIVISION TO M/S. NOVA PAN INDUSTRIES LIMITED UNDER A SCHEME OF AMALGAMATION APPROVED BY T HE HONBLE HIGH COURT OF A.P. W.E.F. 01.04.2006. IT WAS FURTHE R NOTICED THAT AS ON 31.03.2006 THE ASSESSEE-COMPANY HAD TOTAL ASSETS OF RS.3219.89 LAKHS AND TOTAL LIABILITIES OF RS.2538.67 LAKHS. HE NCE, THE NET WORTH OF THE ASSESSEE-COMPANY WAS RS.681.22 LAKHS. THE ASS ESSING OFFICER FURTHER NOTED THAT AS PER THE SCHEME OF AMALGAMATIO N BOTH THE ASSETS AND THE LIABILITIES WERE TRANSFERRED BY THE A SSESSEE COMPANY TO M/S. NOVAPAN INDUSTRIES LIMITED. AS A CONSIDERAT ION FOR THE TRANSFER OF THE DIVISION THE AMALGAMATED COMPANY M/S . NOVAPAN INDUSTRIES LIMITED ALLOTTED 38 SHARES FOR EVERY 100 SHARES OF THE AMALGAMATED COMPANY. BESIDES ALLOTMENT OF SHARES, T HE AMALGAMATED COMPANY M/S. NOVAPAN INDUSTRIES LIMITED ALSO TRANSFERRED CERTAIN INVESTMENTS HELD BY IT AMOUNTING TO RS.25,24,05,000/- TO THE ASSESSEE COMPANY. THE BALAN CE-SHEET OF THE ASSESSEE COMPANY AS ON 31.03.2007 SHOWS SHARE CA PITAL OF RS.6,28,07,500/- AND RESERVE AMOUNT OF DEMERGER AT RS.18,42,87,883/-. 3. THE ASSESSING OFFICER ON EXAMINING THE ABOVE FACT S FELT THAT THE TRANSFER OF THE MANUFACTURING DIVISION TO M/S. NOVAPAN INDUSTRIES LIMITED TANTAMOUNT TO A SLUMP SALE WIT HIN THE MEANING OF SECTION 50B OF THE ACT ATTRACTING LIABILITY OF CA PITAL GAINS THEREIN. THE ASSESSING OFFICER REFERRING TO THE DEFINITION O F SLUMP SALE UNDER SECTION 2(42C) AND THE DEFINITION OF UNDERTA KING AS IN EXPLANATION TO 1 TO SECTION 2 (19AA) DEFINING DEMERG ER, WAS OF THE VIEW THAT THE TRANSFER OF MANUFACTURING DIVISION BY THE ASSESSEE COMPANY AMOUNTED TO SLUMP SALE AND THE CAPITAL GAI N ARISING THEREFROM HAS TO BE BROUGHT TO TAX UNDER THE PROVIS IONS OF SECTION 50B OF THE ACT. THOUGH THE ASSESSEE OBJECTED TO THE AFORESAID VIEW TAKEN BY THE ASSESSING OFFICER BY SUBMITTING THAT THE MANUFACTURING 3 UNIT OF THE ASSESSEE WAS NOT TRANSFERRED FOR A SLUM P SALE CONSIDERATION AND THE SAME IS AMALGAMATED WITH M/S. NOVAPAN INDUSTRIES LIMITED AS A PART OF SCHEME OF ARRANGEME NT AND THERE WAS NO CONSIDERATION RECEIVED IN TERMS OF MONEY VALUE, T HE ASSESSING OFFICER, HOWEVER, DID NOT ACCEPT SUCH CONTENTION OF THE ASSESSEE BY HOLDING THAT THE TRANSFER OF THE MANUFACTURING DIVI SION BY THE ASSESSEE TO M/S. NOVAPAN INDUSTRIES LIMITED IS A SL UMP SALE ATTRACTING LIABILITY UNDER SECTION 50B(1) OF THE ACT AND THEREFORE, TO BE CHARGED TO CAPITAL GAINS TAX. THE ASSESSING OFFIC ER, ACCORDINGLY, PROCEEDED TO DETERMINE THE CAPITAL GAIN BY ADOPTING THE SALE CONSIDERATION FOR THE PURPOSE OF COMPUTING CAPITAL GAIN, THE SHARE CAPITAL ALLOTTED AND THE VALUE OF INVESTMENT TRANSF ERRED TO THE ASSESSEE BY THE AMALGAMATED COMPANY M/S. NOVAPAN INDU STRIES LIMITED AMOUNTING TO RS.6,28,07,500/- AND RS.25,24, 05,000/- RESPECTIVELY TOTALLING TO RS.31,52,12,500 /- AND AFT ER REDUCING THE COST OF ACQUISITION OF RS.6,81,22,000/- DETERMINED LONG TERM CAPITAL GAIN AT RS.24,70,90,500/-. THE ASSESSEE BEING AGGRI EVED OF THE ASSESSMENT ORDER, PREFERRED APPEAL BEFORE THE CIT(A ). 4. IN THE COURSE OF HEARING OF THE APPEAL, IT WAS S UBMITTED BY THE ASSESSEE THAT THE ASSESSEE COMPANY AS WELL AS THE TR ANSFEREE COMPANY WERE ENGAGED IN MANUFACTURING AND SALE OF PA RTICLE BOARDS UPTO 31.03.2006 AND THEREFORE, THE MANAGEMENT OF TH E TWO COMPANIES FELT IT WOULD BE ECONOMICAL AND EFFECTIVE TO COMBINE THEIR OPERATIONS. ACCORDINGLY, AS PER A SCHEME OF ARRANGEM ENT UNDER SECTION 391/394 OF THE COMPANIES ACT, DULY APPROVED BY THE HONBLE HIGH COURT OF A.P. BY AN ORDER DATED 27.12.2006, ALL THE ASSETS AND LIABILITIES OF THE ASSESSEE WERE VESTED WITH M/S. N OVAPAN INDUSTRIES LIMITED AGAINST WHICH, THE ASSESSEE WAS GIVEN INVES TMENTS VALUED AT RS.25,24,05,000/- HELD BY M/S. NOVAPAN INDUSTRIES LI MITED BESIDES ALLOTMENT OF 68,12,200 EQUITY SHARES OF RS.10/- EACH OF THE FACE VALUE TO RS.6,81,22,000/- TO THE SHARE HOLDERS OF T HE ASSESSEE. IT WAS 4 SUBMITTED BY THE ASSESSEE THAT THE PROVISIONS OF SEC TION 50B WERE APPLICABLE ONLY IN THE CASE OF SALE OF AN UNDERTAKIN G AND NOT IN THE CASE OF AN ARRANGEMENT BETWEEN TWO COMPANIES UNDER SECTION 391/394 OF THE COMPANIES ACT, 1956. IN THIS CONTEXT, LEARNED A.R. RELIED UPON CERTAIN JUDICIAL PRECEDENTS INCLUDING TH E DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. MOTORS AND GENERAL STORES PVT. LTD. 66 ITR 692 (S.C.) WHEREIN THE HONB LE SUPREME COURT HELD THAT THE TERM SALE CONNOTES A TRANSFER OF PROPERTY IN GOODS OR OF THE OWNERSHIP IN IMMOVABLE PROPERTY FOR A MONEY CONSIDERATION AND THE PRESENCE OF MONEY CONSIDERATIO N IS AN ESSENTIAL ELEMENT IN A TRANSACTION OF SALE. IT WAS FURTHER HELD THAT IF THE CONSIDERATION WAS NOT MONEY BUT SOME OTHER VALU ABLE CONSIDERATION, IT MAY BE AN EXCHANGE OR BARTER BUT NO T A SALE. THE ASSESSEE FURTHER RELIED UPON THE DECISION OF IT AT, MUMBAI BENCH IN THE CASE OF AVAYA GLOBAL CONNECTION LTD. VS . ACIT 7(3), MUMBAI 26 SOT 397 WHEREIN IT WAS HELD THAT THE EXPR ESSION TRANSFER AS DEFINED IN SECTION 2(47) OF THE ACT IN CLUDE SEVERAL FORMS OF TRANSFER AND SALE IS ONLY ONE SUCH FORM OF TRANSF ER. IT WAS FURTHER HELD THAT THE DEFINITION OF SLUMP SALE UNDER SECT ION 2(42)(C) WOULD MEAN THAT IT IS ONLY A TRANSFER AS A RESULT OF SALE THAT CAN BE CONSTRUED AS A SLUMP SALE. THEREFORE, ANY TRANSFER O F AN UNDERTAKING OTHERWISE THAN AS A RESULT OF SALE WILL NOT QUALIFY AS A SLUMP SALE. THE CIT(A) ON FOLLOWING THE AFORESAID DECISIONS REL IED UPON BY THE ASSESSEE ALLOWED THE APPEAL BY HOLDING AS UNDER : 5.6. THE JUDICIAL VIEW IS THUS CLEAR THAT MONEY CONSIDERATION IS AN ESSENTIAL ELEMENT OF SALE AND THERE BEING NO MONEY CONSIDERATION BEING PASSED BETWEEN THE TRANSFEROR AND TRANSFEREE IN AN ARRANGEMENT U/S. 391 R.W.S. 394 OF THE COMPANIES ACT, A SCHEME OF ARRANGEMENT OR AMALGAMATION DOES NOT AMOUNT TO A SALE. IT IS THEREFORE HELD THAT THE TRANSACTION IN THE CASE OF THE APPELLANT, BEING A RESULT OF A SCHEME OF ARRANGEMENT U/S. 391 R.W.S. 394 OF THE 5 COMPANIES ACT WAS NOT A SALE. CONSEQUENTLY, IT DID NOT FALL WITHIN THE DEFINITION OF A SLUMP SALE U/S. 2(42C), AND THEREFORE, THE PROVISIONS OF SEC.50B DID NOT APPLY TO THE TRANSACTION IN QUESTION. 5. BEING AGGRIEVED, THE DEPARTMENT IS IN APPEAL BEF ORE US. THE LEARNED D.R. SUPPORTING THE CONCLUSION ARRIVED AT B Y THE ASSESSING OFFICER SUBMITTED THAT DEMERGER IS NOTHING BUT SLUM P SALE COMING WITHIN THE AMBIT OF SECTION 2(42C) OF THE ACT. HE, THEREFORE, CONTENDED THAT THE ASSESSING OFFICER WAS CORRECT IN TREATING THE TRANSFER AS A SLUMP SALE AND BRINGING IT TO TAX UNDE R THE HEAD CAPITAL GAIN UNDER SECTION 50B OF THE ACT. . 6. THE LEARNED A.R. ON THE OTHER HAND, AT THE OUTSE T, SUBMITTED THAT THE GROUNDS RAISED BY THE DEPARTMENT ARE NOT ON THE ISSUE IN DISPUTE AS THEY RELATE TO DEMERGER ONLY WHEREAS, THE ASSESSING OFFICER HAS COMPLETED THE ASSESSMENT BY TREATING IT AS A SLUMP SALE UNDER SECTION 50B OF THE ACT. HENCE, THE GROUNDS CA NNOT BE ENTERTAINED. HE FURTHER SUBMITTED THAT THE ASSESSME NT WAS COMPLETED UNDER SECTION 143(3) READ WITH SECTION 14 7 OF THE ACT. IN THE REASONS RECORDED, THE ASSESSING OFFICER HAS MAD E NO REFERENCE TO DEMERGER. IT IS ALSO ADMITTED BY THE ASSESSING OFFIC ER THAT THERE IS NO MONEY CONSIDERATION INVOLVED FOR TRANSFER OF THE ASS ETS. IT WAS SUBMITTED THAT THE ASSESSEE HAS NEVER CLAIMED IT AS DEMERGER. UNDER THESE CIRCUMSTANCES, THE GROUNDS RAISED CANNOT BE E NTERTAINED. IT WAS FURTHER CONTENDED BY THE LEARNED A.R. THAT IF TH ESE GROUNDS ARE ALLOWED TO BE ADJUDICATED, IT WOULD AMOUNT TO CONFI RMING THE ADDITION ON AN ITEM IN RESPECT OF WHICH NO REASONS WERE RECORDED UNDER SECTION 148 OF THE ACT AS NO ADDITION HAS BEE N MADE ON THAT ACCOUNT. 7. SO FAR AS THE MERIT OF THE CASE IS CONCERNED, TH E LEARNED A.R. SUBMITTED THAT THE TRANSACTION CANNOT BE TREATED AS SLUMP SALE UNDER SECTION 2(42C) OF THE ACT AS THE AMALGAMATION OF THE ASSESSEE 6 WITH M/S. NOVAPAN INDUSTRIES LIMITED IS BY OPERATION OF LAW AS A RESULT OF A SCHEME OF ARRANGEMENT APPROVED BY THE HO NBLE HIGH COURT OF A.P. IN A PROCEEDING UNDER SECTION 391 AND 394 OF THE COMPANIES ACT, 1956. IT WAS SUBMITTED THAT THE AMAL GAMATION WAS NOT CONTRACTUAL. IT WAS SUBMITTED THAT THE SCHEME O F AMALGAMATION WOULD MAKE IT CLEAR THAT THERE WAS NO FLOW OF MONEY CONSIDERATION FOR TRANSFERRING THE MANUFACTURING DIVISION TO M/S. NOVAPAN INDUSTRIES LIMITED AS THE MANUFACTURING DIVISION WA S MERGED WITH THE M/S. NOVAPAN INDUSTRIES LIMITED AS A GOING CONC ERN WITH THE TERM THAT M/S. NOVAPAN INDUSTRIES LIMITED SHALL TRA NSFER THE INVESTMENTS APPEARING IN ITS BOOKS OF ACCOUNTS AS O N 31.03.2006 TO THE ASSESSEE COMPANY AND ALLOT 38 EQUITY SHARES AT RS .10/- EACH FOR EVERY 100 EQUITY SHARES HELD IN THE ASSESSEE COMPANY T O THE SHAREHOLDERS. THEREFORE, IT IS VERY MUCH EVIDENT TH AT NO MONETARY CONSIDERATION IS INVOLVED IN THE SCHEME OF AMALGAMA TION. IN THIS CONTEXT, THE LEARNED A.R. REFERRED TO THE DECISION O F THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. MOTORS & GENER AL STORES PVT. LTD. 66 ITR 692 (SC). HE FURTHER REFERRED TO A DECI SION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. R.R. RAMAKRISH NA PILLAI 66 ITR 725 WHEREIN IT WAS HELD THAT WHERE A PERSON CARRYING ON BUSINESS TRANSFERS ASSETS TO A COMPANY IN CONSIDERATION OF AL LOTMENT OF SHARES, IT WOULD BE A CASE OF EXCHANGE, BUT NOT SALE . IN THE LIGHT OF AFORESAID DECISION, IT WAS SUBMITTED THAT SINCE THE TRANSACTION BETWEEN THE ASSESSEE AND THE M/S. NOVAPAN INDUSTRIE S LTD. DOES NOT INVOLVE ANY MONETARY CONSIDERATION IT CANNOT BE CONSI DERED AS SALE. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF THE PARTIES AND PERUSED THE MATERIALS ON RECORD. WE HAVE ALSO CAREF ULLY EXAMINED THE DECISIONS RELIED UPON BY BOTH THE PARTIES. ON PE RUSAL OF THE ASSESSMENT ORDER, IT IS VERY MUCH CLEAR THAT THE ENT IRE ASSESSMENT IS BASED ON THE FACT THAT THE ASSESSING OFFICER HAS TR EATED THE TRANSFER OF ASSETS TO M/S. NOVAPAN INDUSTRIES LTD. AS A SLUM P SALE ATTRACTING 7 THE PROVISIONS OF SECTION 50B OF THE ACT. IN THIS S CENARIO, WE HAVE TO CONFINE OURSELVES TO THE ISSUE AS TO WHETHER THE TR ANSFER OF THE MANUFACTURING DIVISION M/S. NOVAPAN INDUSTRIES LTD. IS A SLUMP SALE WITHIN THE MEANING ASCRIBED UNDER SECTION 2(42 C) OF THE ACT SO AS TO ATTRACT THE PROVISIONS OF SECTION 50B OF THE ACT. IT IS UNDISPUTED THAT UNDER THE SCHEME OF AMALGAMATION APPROVED BY TH E HONBLE HIGH COURT OF A.P. UNDER SECTION 391 AND 394 OF THE COMPANIES ACT, THE MANUFACTURING DIVISION OF THE ASSESSEE COMPANY W AS TRANSFERRED TO M/S. NOVAPAN INDUSTRIES LTD. WITH ALL ITS ASSETS AND LIABILITIES AS PER THE TERMS OF THE SCHEME OF AMALGAMATION APPROVE D BY THE HONBLE HIGH COURT. THE ASSESSEE IN RETURN FOR THE T RANSFER OF THE ASSETS RECEIVED THE INVESTMENTS OF RS.25,24,05,000/ - BESIDES ALLOTMENT OF 38 EQUITY SHARES OF RS.10/- EACH TO THE SHAREHOLDERS OF THE ASSESSEE-COMPANY FOR EVERY 100 EQUITY SHARES HELD IN THE ASSESSEE COMPANY. FROM THE AFORESAID FACTS, IT IS VE RY MUCH CLEAR THAT AS PER THE SCHEME OF AMALGAMATION, THERE IS NO MONETARY CONSIDERATION RECEIVED BY THE ASSESSEE-COMPANY FOR TR ANSFER OF THE MANUFACTURING DIVISION. SECTION 50B OF THE ACT PROV IDES FOR COMPUTATION OF CAPITAL GAINS IN THE CASE OF SLUMP S ALE. THE DEFINITION OF SLUMP SALE UNDER SECTION 2(42C) READS AS UNDER : 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. 9. A PLAIN READING OF THE AFORESAID PROVISION MAKES IT CLEAR THAT TO QUALIFY AS SLUMP SALE, TWO CONDITIONS HAVE TO BE SAT ISFIED VIZ., (1) THERE MUST BE TRANSFER OF ONE OR MORE UNDERTAKING A S A RESULT OF SALE AND (2) THE SALE SHOULD BE FOR A LUMPSUM CONSIDERAT ION WITHOUT VALUES BEING ASSIGNED TO THE INDIVIDUAL ASSETS AND LIABILITIES. IN THE CASE OF THE ASSESSEE IT IS NOT DISPUTED THAT THERE IS NO MONETARY CONSIDERATION RECEIVED FOR TRANSFER OF THE ASSETS A ND LIABILITIES OF THE MANUFACTURING DIVISION TO M/S. NOVAPAN INDUSTRIES L TD. THOUGH 8 THERE MAY BE A TRANSFER OF AN UNDERTAKING. IN THAT V IEW OF THE MATTER, IT HAS TO BE EXAMINED IN THE LIGHT OF RATIO LAID DO WN BY THE VARIOUS JUDICIAL PRECEDENTS WHETHER THE TRANSACTION WOULD AS SUME THE CHARACTER OF SALE ? THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. MOTORS AND GENERAL STORES PVT. LTD. (SUPRA) HELD AS UNDER : SALE IS A TRANSFER OF PROPERTY IN GOODS OR OF THE OWNERSHIP IN IMMOVABLE PROPERTY FOR A MONEY CONSIDERATION. BUT, IN EXCHANGE THERE IS A RECIPROC AL TRANSFER OF INTEREST IN IMMOVABLE PROPERTY, A CORRESPONDING TRANSFER OF INTEREST IN MOVABLE PROPE RTY BEING DENOTED BY THE WORD BARTER. THE DIFFERENCE BETWEEN A SALE AND AN EXCHANGE IS THIS THAT IN THE FORMER THE PRICE IS PAID IN MONEY, WHILST IN THE LATTER IT IS PAID IN GOODS BY WAY OF BARTER. THE PRESENCE OF MONEY CONSIDERATION IS AN ESSENTIAL ELEMENT TO A TRANSACTION OF SALE. IF THE CONSIDERAT ION IS NOT MONEY BUT SOME OTHER VALUABLE CONSIDERATION IT MAY BE AN EXCHANGE OR BARTER BUT NOT A SALE. 10. THE SAME VIEW WAS AGAIN EXPRESSED BY THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. R.R. RAMAKRISHNA PILLA I 66 ITR 725 WHEREIN IT WAS HELD THAT WHERE A PERSON CARRYING ON BUSINESS, TRANSFERS ASSETS TO A COMPANY IN CONSIDERATION OF AL LOTMENT OF SHARES, IT WOULD BE A CASE OF EXCHANGE BUT NOT OF SA LE. THE ITAT, MUMBAI BENCH IN THE CASE OF AVAYA GLOBAL CONNECT LT D. VS. ACIT 26 SOT 397 (MUM.) AFTER FOLLOWING THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. MOTOR GENERAL STORES P VT. LTD. (SUPRA) AND THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF SADANAND S. VARDE VS. STATE OF MAHARASHTRA 247 ITR 609 HELD AS UNDER : 30. IN THE LIGHT OF THE PRINCIPLE LAID DOWN IN THE AFORESAID JUDICIAL PRONOUNCEMENTS, WE ARE OF THE VI EW THAT THE TRANSFER OF TTD BY ASSESSEE TO ITEL CONSEQ UENT TO SCHEME OF AMALGAMATION APPROVED BY HONBLE BOMBAY HIGH COURT CANNOT SAID TO BE A SALE OF UNDERTAKING BY THE ASSESSEE. CONSEQUENTLY, THE TRANSFER COULD NOT BE SAID TO BE AS A RESULT OF SAL E AND 9 THEREFORE THE PROVISIONS OF SECTION 2(42C) OF THE AC T DID NOT APPLY. THE PROVISIONS OF SECTION 50B WERE ALSO NOT THEREFORE APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE. 11. THEREFORE, CONSIDERING THE FACTS OF THE PRESENT CASE IN THE LIGHT OF RATIO LAID DOWN AS ABOVE BY THE HONBLE SUPREME C OURT AND THE TRIBUNAL SINCE THERE IS NO MONETARY CONSIDERATION I NVOLVED IN TRANSFERRING THE MANUFACTURING DIVISION WITH ALL IT S ASSETS AND LIABILITIES TO M/S. NOVAPAN INDUSTRIES LTD. UNDER S CHEME OF AMALGAMATION APPROVED BY THE HONBLE HIGH COURT OF A. P. IT CANNOT BE CONSIDERED TO BE A SLUMP SALE WITHIN THE MEANING ASCRIBED UNDER SECTION 2(42C) OF THE ACT SO AS TO ATTRACT THE LIAB ILITY OF THE CAPITAL GAIN UNDER SECTION 50B OF THE ACT. IN THE AFORESAID VIEW OF THE MATTER, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDING OF THE CIT(A) WHICH IS ACCORDINGLY UPHELD. 12. IN THE RESULT, GROUNDS RAISED BY THE REVENUE ARE DISMISSED AND THE APPEAL IS ALSO DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 21 .08.2013 SD/- SD/- (CHANDRA POOJARI) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD DATE 21 ST AUGUST, 2013. VBP/- COPY TO 1. THE ITO, WARD 3(2), ROOM NO.727, 7 TH FLOOR, B BLOCK, I.T. TOWER S, A.C.GUARDS, HYDERABAD 500 004. 2. M/S. ZINGER INVESTMENTS (P) LTD. 156 - 159, PAIGAH HOUSE, S.P. ROAD, SECUNDERABAD. PAN AABCG9751C 3. COMMISSIONER OF INCOME TAX(APPEALS)-IV, HYDERABA D. 4. COMMISSIONER OF INCOME TAX-III, HYDERABAD 5. DR A BENCH