COMMISSIONER OF INCOME TAX Vs. CARBURETTORS LTD.

JUDGEMENT

(1.) THE appeal is preferred by the Revenue against the order of the Tribunal, Madras Bench 'A', in ITA No. 531/Mad/1996, dt. 1st Oct., 1999 for the asst. yr. 1992 -93, and the same has been admitted and the following substantial question of law has been framed for consideration : 'Whether, on the facts and in the circumstances of the case, the Tribunal is right in law and had valid materials to hold that the consideration for the purpose of computing the capital gains should be taken at Rs. 3.00 crores and that the CIT should not have directed the AO to replace Rs. 3.00 crores by Rs. 5.97 crores?'

(2.) THE brief facts necessary for the disposal of the appeal are : the respondent -company entered into an agreement with its subsidiary company M/s Ucal Components Ltd. on 18th March, 1992 and sold its manufacturing unit at Maraimalai Nagar as a going concern for a sum of Rs. 3 crores. The AO came to the conclusion that the transfer would attract the provisions of the capital gain and held a sum of Rs. 3 crores received as sale consideration would be subject to capital gains tax. The assessee has filed an appeal before the CIT(A) against the order of the assessment levying tax under the head capital gains on the ground that it was a slump sale and so the transaction did not attract the levy of tax under the head 'capital gains'. The CIT(A) dismissed the appeal and as against the order of the CIT(A), the assessee has filed an appeal before the Tribunal and it is stated that the said appeal is pending and is likely to be taken by the Tribunal for hearing in the month of July, 2004.

(3.) AT the time when the appeal was taken up for hearing, Mr. Jayakumar, learned counsel appearing for the assessee, submitted that the appeal filed by the assessee challenging the taxability of the sum whether it is Rs. 3 crores or Rs. 5.97 crores is pending before the Tribunal, as the assessee has challenged the order of the AO on the ground that the sale of its manufacturing unit is a slump sale and such a sale did not attract the levy of capital gains tax.