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March 2025

While computing capital gains on slump sale under section 50B r.w.s. 48, transfer expenses are allowable as a deduction. There is no scope of deviation from the statutory provision regarding computation of capital gains in case of slump sale. The first limb i.e. “the expenditure incurred in connection with transfer” cannot be excluded from being claimed as deduction for the purposes of computation u/s 50B.

By Jagdish T Punjabi, Chartered Accountant
Devendra Jain & Aditya Bhatt, Advocates
Reading Time 4 mins

76. DCIT vs. Larsen and Toubro Ltd.

ITA No. 3369/Mum./2023

A.Y.: 2009-10

Date of Order: 20th December, 2024

Sections: 2(42C), 48, 50B

While computing capital gains on slump sale under section 50B r.w.s. 48, transfer expenses are allowable as a deduction. There is no scope of deviation from the statutory provision regarding computation of capital gains in case of slump sale. The first limb i.e. “the expenditure incurred in connection with transfer” cannot be excluded from being claimed as deduction for the purposes of computation u/s 50B.

FACTS

The Assessing Officer, while reassessing the total income of the assessee, under section 147 of the Act disallowed the sum of ₹27.08 crore claimed by the assessee to be expenditure incurred on transfer while calculation of capital gains on slump sale under section 50B of the Act. The sum of ₹27.09 crore disallowed comprised of Financial Advisory Fee of ₹8.31 crore and other expenses of ₹18.77 crore. The contention of the assessee was that this sum is allowable u/s 48(i) of the Act. These contentions did not find

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