Bombay HC upholds ITAT
order, rules that assessee company’s transfer of entire shareholding in its
subsidiary to third party doesn’t constitute slump sale u/s 2(42C) r.w. Sec
50B, cites distinction between transfer of shares and transfer of undertaking;
Revenue had treated the transaction as a slump sale u/s 2(42C) on the ground
that sale of 100% shares of any company would lead to a change of ownership and
management which is similar to a slump sale and had thus invoked Sec 50B as
against long term capital gains claimed by assessee u/s 48; Rejecting Revenue’s
stand, HC observes that “what has been transferred are mere shares” of
subsidiary company and there has been no transfer of an undertaking; HC remarks
that “Only there has been change in pattern of its share holdings which would
not make it slump sale” which is evident from the statutory definition of slump
sale and the term 'undertaking' as defined in the Act read with the binding
decision of the Apex Court in Bacha F. Guzdar; Upholding ITAT order, HC holds
that “Tribunal invoked the correct principle of law to draw a distinction
between transfer of shares and transfer of undertaking” and concludes that no
substantial question of law arises.:HC
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