SIR SHADI LAL ENTERPRISES LTD.,NEW DELHI vs. DCIT CIRCLE-23(2), NEW DELHI

PER M. BALAGANESH, A. M.: 1. The appeal in ITA No.5512/Del/2019 for AY 2015-16, arises out of the ld. Commissioner of Income Tax (Appeals)-8, New Delhi [hereinafter referred to as ‘ld. CIT(A)’, in short] in Appeal No. 10358/17-18 dated 22.04.2019 against the order of assessment passed u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 30.12.2017 by the Assessing Officer, DCIT, Circle- 23(2), Delhi (hereinafter referred to as ‘ld. AO’). 2. The only effective issue to be decided is as to whether the ld CIT(A) was justified in confirming the addition in the sum of Rs. 27,09,95,865/- in the form of long term capital gains on account of slump sale of unit of Sugar Mill in the facts and circumstances of the instant case. M/s. Shri Shadilal Enterprises Ltd 3. We have heard the rival submissions and perused the material available on record. This appeal was already disposed of by this Tribunal vide order dated 12.09.2023. Later the assessee preferred an Miscellaneous Application (MA) and the same was disposed of in MA No. 39/Del/2024 dated 30.08.2024 wherein it was recalled to examine whether Rs. 49,19,22,400.94 represent profit earned on slump sale or the written down value (WDV) of the asset as per Companies Act. 4. The assessee is a limited company engaged in the business of manufacturing and sale of sugar and alcoholic products. During the year under consideration, the assessee sold UNN Sugar Unit located at Block, UNN District Shamli, UP to M/s. Superior Food Grains Pvt. Ltd for Rs. 70 crores on slump sale basis. The assessee took the sale consideration figure of Rs. 70 crores and after reducing written down value of depreciable assets and book value of other assets, arrived at the long term capital gains of Rs. 21,96,52,738/- arising on account of slump sale of UNN Sugar Unit and offered the same in the return of income. The ld AO substituted the sale consideration of Rs. 75.50 crores which aspect is not recalled by this Tribunal and hence, the same is not considered hereinabove. On perusal of the ledger account of M/s Superior Food Grains Pvt. Ltd (buyer of UNN Sugar Unit) for the period 01.04.2014 to 31.03.2015 which is enclosed at page 214 and 215 of the Paper Book, we find that assessee had debited and credited a sum of Rs. 49,19,22,400.94 as amount of fixed assets transferred. It is pertinent to note that these figures merely represent contra entry which is evident from the same ledger account as the same sum has been debited as well as credited. Hence, the said figure will have absolutely no relevance in any manner whatsoever for the purpose of computation of long term gains arising on account of slump sale UNN Sugar Unit. The ld AO considering this value of fixed asset transferred at Rs. 49,19,22,401/- had M/s. Shri Shadilal Enterprises Ltd compared the same with the capital gains returned by the assessee and proceeded to treat the difference as undisclosed capital gains. But the fact is Rs. 49.19 worth of assets lying in company as per books of account were sold for Rs. 70 crores on slump sale to M/s Superior Food Grains Pvt. Ltd by the assessee. The differential sum represent gains provided which has been duly disclosed by the assessee as long term capital gains in the return. Further, the Chartered Accountant certified that detailed working in the Form 3CEA was also furnished by the assessee which are enclosed in pages 43 to 46 of the Paper Book. Further, the assessee had also given the workings of reconciliation of written down value of assets as per Companies Act as well as Income Tax Act which is enclosed at page 44 of the Paper Book. On perusal of all these documents, we find that Rs. 49.19 crores of assets of the assessee company were sold for Rs. 70 crores on slump sale and differential profit of Rs. 21 crores has been duly offered as long term capital gain in the return on which, we do not find any infirmity. Hence, there is no case of making any addition whatsoever on account of long term capital gain except the sum of Rs. 5.50 crores added on account of sale consideration. Accordingly, grounds raised by the assessee are hereby partly allowed. 5. In the result, the appeal of the assessee is partly allowed.

Order pronounced in the open court on 16/07/2025. - - (VIKAS AWASTHY)
ACCOUNTANT MEMBER

Dated: 16/07/2025
A K Keot