Pnb Finance Ltd v. Commissioner Of Income Tax-I, New Delhi

Case: PNB FINANCE LTD. versus COMMISSIONER OF INCOME TAX-I, NEW DELHI [[2008] 15 S.C.R. 556] (2008) [ 2008 ] 15 एस. सी. आर. 556 पी. एन. बी. वित्तलिमिटेड वी. आयकरआयुक्त-I, नईदिल्ली(2002 कीसिविलअपीलसंख्या3721) नवंबर6,2008 [ एस. एच. कपाडियाऔरबी. सुदर्शनरेड्डी, जे. जे.] आयकरअधिनियम, 1961 - एस. 45-निर्धारणवर्ष1970 71-बैंकिंगउपक्रमद्वाराप्राप्तक्षतिपूर्ति 1970 केबैंकिंगकंपनीअधिनियमकेतहतहस्तांतरण-कराधान का-आयोजितःबैंकिंगउपक्रममेंअन्यबातोंकेसाथ-साथसद्भावना, किरायेदारीअधिकार, श्रमशशक्तिऔरबैंकिंगलाइसेंसकेमूल्यजैसीअमूर्तपरिसंपत्तियांशामिलथीं। मदवार-इसलिए, पूंजीगतलाभकीगणनाकरनासंभवनहींथाऔरइसलिए, बैंकिंगउपक्रमद्वाराअपनेहस्तांतरणपरप्राप्तमुआवजेकीराशिएसकेतहतकरयोग्यनहींथी।45 – बैंकिंगकंपनियाँ(अधिग्रहणऔरहस्तांतरण) उपक्रम) अधिनियम, 1970। विचाराधीनबैंकिंगउपक्रमप्राप्तहुआ बैंकिंगकेतहतइसकेहस्तांतरणपरमुआवजा कंपनी(उपक्रमोंकाअधिग्रहणऔरहस्तांतरण) अधिनियम, 1970। जिसप्रश्नपरविचारकियाजानाथा वर्तमानअपीलयहहैकिक्याउक्तबैंकिंगकाहस्तांतरण निर्धारणवर्ष1970-71 सेसंबंधितमामलेकेतथ्योंऔरपरिस्थितियोंकोध्यानमेंरखतेहुए, एसकेतहतकरयोग्यपूंजीगतलाभकेलिए।45 आयकरअधिनियम, 1961। निर्धारितीद्वारादायरअपीलकोअनुमतिदेतेहुए, न्यायालयने पकड़नाः1.1 . एसकीप्रयोज्यताकेलिए।45 , तीनपरीक्षणहैं- आवेदनकरनेकीआवश्यकताहै।पहलापरीक्षणयहहैकिचार्जिंगअनुभागऔरगणनाप्रावधानअटूटहैं। 556 पी. एन. बी. वित्तलिमिटेडv. आयआयोग557 -टैक्सआई, नईदिल्ली जुड़ाहुआहै।प्रभारअनुभागऔरगणनाप्रावधानएकसाथएकएकीकृतसंहिताकागठनकरतेहैं। इसलिए, जहांगणनाकेप्रावधाननहींहोसकतेहैं लागूहोताहै, यहस्पष्टहैकिइसतरहकेमामलेकाइरादानहींथा चार्जिंगअनुभागकेअंतर्गतआताहै, जोवर्तमानमें मामला, एसहै।45 . उसखंडमेंविचारकियागयाहैकिकोईभीअधिशेषष पूँजीपरिसंपत्तियोंकेहस्तांतरणपरउपार्जितहोनेपरकरलगायाजाताहै।पिछलेवर्षजिसमेंस्थानांतरणहुआथा।इसमें मामला, स्थानांतरण18.7.1969 परहुआ।दूसराटेस्ट आबंटन/एट्रिब्यूशशनकापरीक्षणहै।यहपरीक्षणमंदीलेनदेनपरलागूहोताहै।इसपरीक्षणकेपीछेकाउद्देश्ययहपतालगानाहैकिक्यामंदीकीकीमतसक्षमथी व्यक्तिगतपरिसंपत्तियोंकेलिएजिम्मेदार, जिसेकेरूपमेंभीजानाजाताहै वस्तु-वारनिर्दिष्टकरना।तीसरापरीक्षणयहहैकिएक बैंकिंगलाइसेंसकेअधिकारऔरमूल्य।हालांकि, ऐसीवस्तुओं(अमूर्त) कीकीमतनिर्धारितनहींकीजा-सकतीहै।[ पैरा17] [ 564 - एच; 565-एई] वर्तमानमामलेमें, बैंकिंगउपक्रम, 1.2 . अन्यबातोंकेसाथ-साथ, सद्भावनाजैसीअमूर्तपरिसंपत्तियाँभीशामिलहैं, किरायेदारीअधिकार, श्रमशशक्तिऔरबैंकिंगलाइसेंसकामूल्य।तथ्योंकीबातकरेंतोवस्तु-वारनिर्धारितकरनासंभवनहींथा।द. रुपयेकामुआवजा(बिक्रीपरविचार)।10.20 क्र. यहआबंटितकरनेयोग्यवस्तुनहींथी।वनोंकेकारण, पर वर्तमानमामलेकेतथ्यऔरपरिस्थितियाँ, जो आकलनवर्ष1970-71 केसंबंधमें, पूंजीगतलाभकीगणनाकरनासंभवनहींथाऔरइसलिए, उक्तराशिसेरु. 10.20 क्र. एसकेतहतकरयोग्यनहींथा।45 आयकरअधिनियम, 1961।[पारस17 और18] [565-जी-एच; 566-ए, बी] सी. आई. टीवी. आर्टेक्समैन्युफैक्चरिंगकं., (1997) 227 आईटीआर260, लागूनहींकियागया। 558 सर्वोच्चन्यायालयकीरिपोर्ट[2008] 15 एस. सी. आर. सी. आई. टीवी. बी. सी. श्रीनिवाससेट्टी(1981) 128 आई. टी. आर. सी. आई. टी. मुगनीरामबांगुरएंडकंपनी(1965) 57 आई. टी. आर. 299 औरसी. आई. टी. इलेक्ट्रिककंट्रोलगियरमैन्युफैक्चरिंगकंपनी(1997) 227 आई. टी. आर. 278 काउल्लेखकियागयाहै।मामलाकानूनसंदर्भः( 1997 ) 227 आई. टी. आर. 260 अभिनिर्धारितअप्रयोजनीयपैरा11 (1965) 57 आई. टी.आर. 299 पैरा15 (1997) 227 आई. टी. आर. 278 पैरा16 (1981) 128 आई. टी. आर.294 पैरा17 सिविलअपीलीयन्यायनिर्णयः2002 कीसिविलअपीलसं. 3721।1979 केआई. टी.आर. No.12 मेंनईदिल्लीमेंदिल्लीउच्चन्यायालयकेअंतिमनिर्णयऔरआदेशशदिनांक27.4.2001से।अजयवोहरा, भार्गववी. देसाई, अपीलार्थीकीओरसेकविताझा, संदीपकरहैल, राहुलगुप्ताऔररीनाशशर्मा।मोहनपरासरन, एएसजी।, प्रतिवादीकेलिएडी. एल.चिदानंद, गौरवढींगरा, नरेशशकौशिक, बी. वी. बलरामदास।न्यायालयकानिर्णयएस. एच. कपाडिया,जे. 1 द्वारादियागयाथा।यहदीवानीअपीलनिर्धारणवर्ष1970-71 केलिएआयकरअधिनियम,1961 ("1961 अधिनियम") कीधारा256 (1) केतहतआयकरसंदर्भमेंदिल्लीउच्चन्यायालयकेफैसलेकेखिलाफनिर्देशितहै।2. इसदीवानीअपीलमेंनिर्धारणकेलिएजोमुद्दाउठताहैवहयहहैकिक्याइसमामलेकीतथ्यपरिस्थितियोंपरबैंकिंगउपक्रमकेहस्तांतरणने1961 केअधिनियमकीधारा45 केतहतकरयोग्यपूंजीगतलाभकोजन्मदिया।3. पंजाबनेशशनलबैंकलिमिटेडकीस्थापना1895 मेंएकऐसेक्षेत्रमेंकीगईथीजोअबपाकिस्तानमेंआताहै।इसकाराष्ट्रीयकरणपंजाब1 केरूपमेंकियागयाथा। पी. एन. बी. वित्तलिमिटेडv. आयआयोग 559 कर-I, नईदिल्ली[एस. एच. कपाडिया, जे.] बैंकिंगकंपनियोंद्वाराराष्ट्रीयबैंक(पी. एन. बी.) (अधिग्रहणऔर Case: PNB FINANCE LTD. versus COMMISSIONER OF INCOME TAX-I, NEW DELHI [[2008] 15 S.C.R. 556] (2008) [2008] 15 S.C.R. 556 PNB FINANCE LTD. A v .. COMMISSIONER OF INCOME TAX-I, NEW DELHI (Civil· Appeal No. 3721 of 2002) NOVEMBER 6, 2008 B [S.H. KAPADIA AND B. SUDERSHAN REDDY, JJ.] Income Tax Act, 1961 - s.49 - Assessment Year 1970-71 - Compensation received by Banking Undertaking on its c [transfer under Banking Companies Act ][of ][1970 ][-][ Taxability ]of - Held: The Banking Undertaking, inter alia,· included intangible assets like goodwill, tenancy rights, manpower and value of banking licence - Compensation was not allocable item-wise - Hence, it was not possible to compute capital D [gains and, therefore, the amount ][of ][compensation received ]by the Banking Undertaking on its transfer was not taxable under s.45 - Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970. The Banking Undertaking in question received E compensation on its .transfer under the Banking Companies {Acquisition1 and Transfer of Undertakings) Act, 1970. The question which arose for consideration in the F [present appeal ][is ][whether transfer ][of ][the said Banking ]Undertaking in the facts and circumstances of the case, which concerned the Assessment Year 1970-71, gave rise to capital gains taxable under s.45 of the Income Tax Act, 1961. G Allowing the appeal filed by the assessee, the Court HELD:1.1. For applicability of s.45, three tests are required to be applied. The first test is that the charging section and the computation provisions are inextricably H """'-- ~ .. .,.__ PNB FINANCE LTD v. COMMISSIONER OF INCOME TAX-I, NEW DELHI linked. The charging section and the computation A provisions together constitute an integrated Code. Therefore, where the computation provisions cannot apply, it is evident that such a case was not intended to fall within the charging section, which, in the present case, is s.45. That section contemplates that any surplus B accruing on transfer of capital assets is chargeable to tax in the previous year in which transfer took place. In this case, transfer took place on 18.7.1969. The second test is the test of allocation/attribution. This test applies to a slump transaction. The object behind this test is to find c out whether the slump price was capable of being attributable to individual assets, which is also known as item-wise earmarking. The third test is that there is a conceptual difference between an undertaking and its components. Plant, machinery and dead stock are 0 individual items of an Undertaking. Business Undertaking can consist of not only tangible items but also intangible items like, goodwill, man power, tenancy rights and value of banking licence. However, the cost of such items (intangibles) is not determinable. [Para 17] E [564-H; 565-A-E] B 1.2. In the present case, the Banking Undertaking, inter alia, included intangible assets like, goodwill, tenancy rights, manpower and value of banking licence. On facts, item-wise earmarking was not possible. The F compensation (sale consideration) of Rs. 10.20 er. was not allocable item-wise. For the aforestated reasons, on the facts and circumstances of the present case, which concerns assessment year 1970-71, it was not possible to compute capital gains and, therefore, the said amount G of Rs. 10.20 er. was not taxable under s.45 of the Income Tax Act, 1961. [Paras 17 and 18] [565-G-H; 566-A, B] F CIT v. Artex Manufacturing Co., {1997) 227 ITR 260, held· inapplicable. H A CIT v. B.C. Srinivasa Setty (1981) 128 ITR 294; CIT v. Mugneeram Bangur & Co. (1965) 57 ITR 299 and CIT v. Electric Control GearManufacturing Co. (1997) 227 ITR 278, referred to. Case Law Reference: B c CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3721 of 2002. o From the final Judgment and Order dated 27.4.2001 of the High Court of Delhi at New Delhi in ITR No.12 of 1979. Ajay Vohra, Bhargava V. Desai, Kavita Jha, Sandeep S. Karhail, Rahul Gupta and Reema Sharma for the Appellant. E Mohan Parasaran, ASG., D.L. Chidananda, Gaurav Case: PNB FINANCE LTD. versus COMMISSIONER OF INCOME TAX-I, NEW DELHI [[2008] 15 S.C.R. 556] (2008) ums aetton fethas ,*>ਿ (FASS 2002 Tt NIG S. 3721) | 6 *ਵੰ,: 2008 A. arse ws ef. HegHe Jat, AA WHES CAA Ma, 1961-. WI.49-HB'AS A'S 1970-71-Hfad visdefegd wT YUS wes 1970 2od Atos..45-sfeat cushy (UUst ws uisdetdgM uw Fa TEsB") nee, 1970. Hes fev sfaat visser } sfc cushy (lade 1 ws wisdeldgh uw sas") wae, 19702sfos fH te sees '3S wer ys deer c sees, ff fa HBAS A'S 1970-71 5S AMOS Dd, d WHS Can Male, 1961 UtOa 45 ne Cana HStdedds urs wf wets ct wrfemr fee de, wees 4 fage1.1. 45 ct oT ade set, f¥0 cHeJ5 $ BT ago tt Bs J. ufssr cue fea J fa wotiat Hane ws afuGens ysa wide Jal disor Stuer di wafial Hane ws afugens & usu fis a fla tetas as ww Too age JolRH ott, fa deo t yea og od J Hae, fa Ane J fa wise an wha Aone ties wesore odt At, A fa Hae HHS feo oes. 45 dl GH Hane feu feord ats fer d fa Unt Huser esree OS Je Sar adt 4 HOUSA fled WS feu can 2 Oa J fAA feo sees Shr Fh feA aAfed, SHE 18.7.1969 6 dw. unt cHe St noche /MedtaSHe & ce di fed cHe fa HHS BE-te 3 og Je di fa cnet fle Gea fa us saree J fa ot Het St ahs fenastas Aus eTIS JE CUT Ht, fan } eAs-Ss Chovrada SF fas re di St ene fra J fa fFa CEH 3 fEA(MAUS) of aus feguores Sot atst A Hat. [De 17] [564- whe: 565- 8-8] fare SrGe Hse Sof A 10.20/-que w we Hert (feadt feorg) J. fFarst nigra Ze Ua ocAl ATS TS ada dda, Hae HHS ct sa ws Teste wag 'S, A fa HBAS WS 1970-71 FSAds J, Unt os a eo ada Age ot At us fA Set, Jue ct Gas Jan Ht. 10.20 Ja. feg feaaHcan NaS, 1961 tt OS 45 @ Sfas Can Sot a [Ue 17 nS 18] [565- At-ve: 566- 2, =i Alora. ct aan woacaH Hodaulda aust, (1997) 227 »reth.ct arg 260, wulfas - Sg ad. + AL ret ct Sou St. At. Alfeea AT (1981) 128 ret. ct urd. 294; At wet. aysstsH sys ¥auat (1965) 57 »retdrg 299 ws AMretct won fesafed aeds ding Hadautda aust (1997)227 wratctord 278, S Jee fer far AH AOS TU ISS (1997) 227 wret. ct. wa 260 BT od ats fom Ut 11 (1965) 57 “ret. St. wg 299 a faag Us 15 | (1997) 227 wret. Sj. wr 278 a faadg Us 16 (1981) 128 “ret.cftu~g29n wad Us 17° faem nuns fenifte cue: fees LIS 5. 2002 ST 3721. feat ret age 2 nifsy 2ue nS wren fst 27.4.2001 S oe fest fe8 1979 S wretdnrg Sug 12 fed. Mees w cHE fer fern AT wWawty. aus, A. 1. feo free one wrHes can nla]e, 1961 tt Oe 256 (1) Ut Sfas MHS CAHHuds feu fest get age t ens t fuse fageths ats farr J ("1961 wae") HBAS AS 1970-715") 2. fA fares At nts fee fears age St A He Cou 3 Gu fa d fa ot EA HHS 2 Se WB TSSG3 Hfag nisdefia t sees 5 1961Mae th OSs 45 UC sfos canuad Unt os S HOH FET I 3. Uae duos da feufes ct neus 1395 fee fa Ysa whe feu ast ae A A ge ufanss feuwee Jl fA ST THedlade UAS ed ats fam tl A.J. cuss, 7] 3 t cone we vigzgefagn) wae, 197019.7.1969 $ Ute HOS Sa feu THEA G3 Sediée ui. Wo. at. fs fortes fen fee writersdl THedads ‘37. a. S Fa Sa Que | yer fifo 10.20 3a. fea werent flrs 5 WateHotent 2 uUrntade t warg '3 fafear famr A Gas WWSH 31.12.1969 S HSH JE SR SY HBSUTS YUS ats famr At A fe 1970-71 U WBA oS AEfas J. 'L, HBAS AS 1970-: 1 CUTS, wuiisags § Aan 48 t sfos Yat os dt Tes adot At, fAH fevfeadt F yust oH Sas } Fa dt SIs WS seus Hag fev ats Te voto? worg earfenr fomHt GH AH YDISS ASO CU Slds, HB'aeEATST BIS Hive Hata o SIT ada yUst ct SIS oFoy ag nee At A yust ct Asta Sas Se Te 5. seas, fa de ata 7 Hae d fa fea nNe|, 1999 SS HHS att Te GST 508 feu AG ES,1.4.2000, YUSt tt Ss Je "ASU" feadt @ HHS feu wgH'os 3g 3 fess ast Tet J Gasfens & sfos, aoefsor } fA S Seu Sat sares S fst S rust serie He fyurag aga tt 3sJat J 3 Gn fist St Bu ahs S$ ge fiers feu dus H 33 dat 3 Gaz Aye Sfs, Fu shes fedJal wie wret fEH BET, 1.4.2000 Fame YUst Tt Sas AS fead t HHS fed ugH os 3d 3 fagsotst Art J. TBs, HBAS AS 1970-71 UIs wis aed SaHS Hoe odt Ah CA AA, agetui S11.1954 6 YUS ado tt SIS A THE Hale HS } 10 SY gue @ fead HS (ren) SF dcer derFt 10.20 3. Ft [awe 55 (2) (i) 24] fa feasu fas ffx 2 os Ba aaetaor } fez famr FhTits, AAAS 55 (2) fede S Tt Bg Sr A 11.19546 "Yust tt Sas" WS... wB-A "Stes HateHe" 2 vias Hoe Ao StH ve Ut eas ast 7 Aa GH AM, fa HetAE aga TS BE sls te Bet ੁ䅱ਲਹ> :J Case: PNB FINANCE LTD. versus COMMISSIONER OF INCOME TAX-I, NEW DELHI [[2008] 15 S.C.R. 556] (2008) पी. एन. बी. वित्तलिमिटेडv. आयआयोग 559 कर-I, नईदिल्ली[एस. एच. कपाडिया, जे.] बैंकिंगकंपनियोंद्वाराराष्ट्रीयबैंक(पी. एन. बी.) (अधिग्रहणऔर उपक्रमअंतरण) अधिनियम, 1970।19.7.1969 पी. एन. बी. लिमिटेडपर।पंजाबनेशशनलबैंकमेंनिहितराष्ट्रीयकरणपर।पीएनबी फाइनेंसलिमिटेडइसमेंअपीलार्थीहै।राष्ट्रीयकरणकेबारेमें रुपयेकामुआवजामिला।10.20 क्र. इसमुआवजेकीगणनापिछले5 वर्षोंकेमुनाफेकेपूंजीकरणकेआधारपरकीगईथी। उक्तक्षतिपूर्तिलेखांकनकेदौरानप्राप्तहुईथी। निर्धारणवर्षकेअनुरूपसमाप्तहोनेवालावर्ष31.12.1969 1970-71 . निर्धारणवर्ष1970-71 केदौरान, अपीलार्थीको 4. धारा48 केतहतपूंजीगतलाभकीगणना सुधारकीलागतऔरइसकेसंबंधमेंकिएगएखर्चोंसेबढ़ीहुईअधिग्रहणकीलागतपरविचारकरना स्थानांतरण।उससमयप्रचलितकानूनकेतहत, निर्धारितीलागतमुद्रास्फीतिसूचकांककोलागूकरकेअधिग्रहणकीलागतकोअनुक्रमितकरसकताहैजो आई। अधिग्रहणकीअनुक्रमितलागतबनगई। संयोगसे, यहध्यानदियाजासकताहैकिएकसंशोधनद्वारा 5. -अपनेउपक्रमकेलिएहस्तांतरणकीतारीखकेअनुसारअपनीतुलनपत्रतैयारकरेंऔरउसतारीखकेनिवलमूल्यकोअबध्यानमेंरखाजानाआवश्यकहै।उक्तसंशोधनकेतहत, निवलसंपत्तिइसमेंमूल्यह्रासयोग्यपरिसंपत्तियोंकालिखितमूल्य(डब्ल्यू. डी. वी.) शामिलहैऔर वर्तमानपरिसंपत्तियोंकाबहीमूल्यघटाकरलीगईदेनदारियाँ। इसलिए, 1.4.2000 केबादअधिग्रहणकीलागतअनुमानितरूपसेतयकीजातीहै। मंदीबिक्रीकेमामलेमें।हालाँकि, इसदौरानऐसाकोईसूत्रमौजूदनहींथा।मूल्यांकनवर्ष1970-71।उससमय, निर्धारितीकोयातोअधिग्रहणकीलागतयाउचितबाजारमूल्यमेंकटौतीकरनीपड़तीथी। 1.1.1954 रुपयेकेबिक्रीमूल्य(मुआवजे) से।10.20 क्र. [ धारा55 (2) (i) देखें।यहविकल्पदियागयाथा निर्धारितीकेवलअपनेलाभकेलिए।तथापि, केवलधारा55 (2) यदि"अधिग्रहणकीलागत" केआंकड़ेमौजूदहैंऔर " 1.1.1954 परउचितबाजारमूल्य"ताकिविकल्पहोसकेव्यायामकिया।उससमय,निर्धारितीकेलिए[2008] 15 एस. सी. आर. काविरोधकरनाखुलाथा। सर्वोच्चन्यायालयकीरिपोर्ट 560 किवहदोनोंआंकड़ोंकेबादहीविकल्पकाप्रयोगकरेगा 1.1.1954 परपरिसंपत्तिकीमूललागतऔरउचितबाजारमूल्य उपलब्धथा।संक्षेपमें, यह1.4.2000 केबादहीहैकिगणनातंत्रकोधारा48 मेंडालागयाजोगणनाकेतरीकेसेसंबंधितहै। 6. पूँजीपरिसंपत्तिकेहस्तांतरणपरकोईभीअधिशेषषप्रभार्यहै। पिछलेवर्षमेंधारा45 केतहतकरकेलिएजिसमेंहस्तांतरणकियागयाथा(यानीइसमामलेमें18.7.1969 पर)।यहहैआदेशश धारा45।इसमामलेमेंनिर्धारितीद्वाराप्राप्तप्रतिफलकापूरामूल्यरु।10.20 क्र. 7. इसमामलेमेंनिर्धारितीद्वाराएकविवरणीदाखिलकीगईथीजिसमेंदिखायागयाथा रु. कीआय।2,03,364 . आवरणपत्रमेंजिसकेसाथ आयविवरणीनिर्धारितीद्वारादाखिलकीगईथीए. ओ. द्वारायहदेखागयाकिनिर्धारितीने1.1.1954 परबैंकिंगउपक्रमकेमूल्यकापतालगानेकाविकल्पचुनाथा।द. पत्रकादिनांक30.9.1970 था।उसपत्रकेपैरा5 में, निर्धारितीनेनिम्नानुसारकहाः " यहमानतेहुए, इनकारकरतेहुएकिधाराकेप्रावधान 45 लागूहोतेहैं, कंपनीऐसेउपक्रमकेउचितबाजारमूल्यकेप्रतिस्थापनकेलिएअपनेविकल्पकाप्रयोगकरतीहै। 50आयकरअधिनियम, 1961 "। 8. एओकेसमक्षनिर्धारितीद्वारायहतर्कदियागयाथाकि धारा55 (2) (i) केतहतविकल्पकाउपयोगकेवलतभीकियाजानाथाजबयहनिर्धारितीकेलिएफायदेमंदहो।निर्धारितीनेप्रस्तुतकियाकि उसकेपासधारा55 (2) (i) केतहतएकविकल्पथाकिऐतिहासिकआधारपरउपक्रमकामूल्यनिर्धारितकियाजाए। पूंजीपरिसंपत्ति(बैंकिंगउपक्रम) केअधिग्रहणकीलागतयाजिसकामूल्य1.1.1954 परनिर्धारितकियागयाहै, जोभीहो इससेअधिकलेकिनअधिग्रहणकीलागतकेरूपमेंइसकाउपयोगनहींकरसके मामलासंगणनीयनहींथा।वैकल्पिकरूपसे, अपीलार्थीनिर्धारितीनेयहाँउपक्रमकाउचितबाजारमूल्यप्रस्तुतकिया।1.1.1954 पर।30.9.1970 दिनांकितपत्रद्वारा, निर्धारितीनेपूंजीगतनुकसानकादावाकिया।ए. ओ. नेअभिनिर्धारितकियाकिचूंकिनिर्धारितीकेपासपी. एन. बी. वित्तलिमिटेडv था। केउचितबाजारमूल्यकीअपनीगणनाप्रस्तुतकी निर्धारितीद्वाराउसकेदिनांकितआवरणपत्रकेमाध्यमसेप्रस्तुतकियागयाइससंबंधमेंयहध्यानदियाजासकताहैकि 30.9.1970 . रुपयेकामुआवजा।10.20 क्र. निर्धारितीकोभुगतानकियागयाथा किसनिर्धारितीनेरुपयेकीकटौतीकादावाकिया।17,22,73,246 ( 1.1.1954 परउपक्रमकाबाजारमूल्यरु।10,41,51,625 साथहीसुधारकीलागतरुपयेतयकीगई। - 6,81,21,621 ) . इसप्रकारनिर्धारितीनेतर्कदियाकिउपरोक्तलेनदेनमेंउसेरुपयेकापूंजीगतनुकसानहुआथा।7.02 क्र. इसगणनाकोआगेबढ़नेवालेएओद्वारास्वीकारनहींकियागयाथा। पिछले5 वर्षोंकेलाभकेपूंजीकरणकेआधारपररखनेकेलिए रुपयेकापूंजीगतलाभ।1,65,34,709 ( पेपरबुककापृष्ठ42 देखें)। एओकेफैसलेसेव्यथित, मामलाथा 9. निर्धारितीद्वाराअपीलीयसहायकआयुक्तकेसमक्षअपीलकीगई, जोअपनेदिनांक1 केआदेशशद्वाराइसनिष्कर्षपरपहुंचेकिइसमामलेमेंप्राप्तप्रतिफल(क्षतिपूर्ति) कापूरामूल्यआवंटितकरनासंभवनहींथा। रु. कीराशि।10.20 क्र. विभिन्नपरिसंपत्तियोंकेबीचउपक्रमकरनाऔर, परिणामस्वरूप,यहनिर्धारितकरनासंभवनहींथा Case: PNB FINANCE LTD. versus COMMISSIONER OF INCOME TAX-I, NEW DELHI [[2008] 15 S.C.R. 556] (2008) Case Law Reference: B c CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3721 of 2002. o From the final Judgment and Order dated 27.4.2001 of the High Court of Delhi at New Delhi in ITR No.12 of 1979. Ajay Vohra, Bhargava V. Desai, Kavita Jha, Sandeep S. Karhail, Rahul Gupta and Reema Sharma for the Appellant. E Mohan Parasaran, ASG., D.L. Chidananda, Gaurav Dhingra, Naresh Kaushik, B.V. Balaram Das for the Respondent. The Judgment of the Court was delivered by F S.H. KAPADIA, J. 1.This civil appeal is directed against the judgment of Delhi High Court in Income tax Reference under Section 256(1) of the Income Tax Act, 1961 ("1961 Act") for the assessment year 1970-71. 2. The issue which arises for determination in this civil G appeal is whether transfer of Banking Undertaking on the facts and circumstances of this case gave rise to taxable capital gains under Section 45 of the 1961 Act. 3. Punjab National Bank Ltd. was set up in 1895 in an area H which now falls in Pakistan. It was nationalized as Punjab ~ .__ > ~ [f ] i -r - National Bank (PNB) by Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970. On 19.7.1969 PNB Lt~. on nationalization vested in Punjab National Bank. PNB Finance Ltd. is the appellant herein. On nationalization jt received compensation of Rs. 10.20 er. This compensation was calculated on the basis of capitalization of last 5 years profits. The said compensation was received during the accounting year ending 31.12.1969 corresponding to the assessment yea~ 1970-71. A 4. During the assessment year 1970-;:1, appellant had to 4. During the assessment year 1970-;:1, appellant had to compute capital gains under Section 48 by deducting from the [c ] sale con_sideration the cost of acquisition as increased by the' cost of improvement and expenses incurred in connection with the transfer. Under the law then prevailing, assessee could index the cost of acquisition by applying cost inflation index which became indexed cost of acquisition. D I 5. Incidentally, it may be noted that by an amendment to, Section 508 inserted by the Finance Act, 1999 w.e.f. 1.4.2000, cost of acquisition is now notionally fixed in case of "slump" sale. Under the said arrangement, assessee is required to draw up his Balance Sheet as on the date of transfer for its undertaking and net worth of that date is now required to be taken into account. Under the said amendment, net worth consists of written down value (WDV) of depreciable assets and the book value of the current assets minus liabilities taken over. Therefore, after 1.4.2000 cost of acquisition is notionally fixed in case of slump sale. However, no such formuln existed during assessment year 1970-71. At that time, assessee had to deduct either cost of acquisition or fair market value as on 1.1.1954 from the sale price (compensation) of Rs. 10.20 er. [see Section 55(2)(i)]. This option was conferred on the assessee solely for its benefit. However, Section 55(2) only triggered if there existed the figures of "cost of acquisition" and "fair market value" as on 1.1.1954 so that the choice could be exercised. At that time, it was open to the assessee to contend E F G H A [that ][he ][would exercise ][the ][option ][only ][after ][both ][the ][figures of ]original cost and fair market value of the asset as on 1.1.1954 was available. In short, it is only after 1.4.2000 that computation machinery came to be inserted in Section 48 which deals with mode of computation. B 6. Any surplus on transfer of capital asset is chargeable to tax under Section 45 in the previous year in which the transfer took place (i.e. in this case on 18-.7.1969). This is the mandate of Section 45. The full value of consideration received by the assessee in this case was Rs. 10.20 er. c 7. A Return was filed in this case by the assessee showing Case: PNB FINANCE LTD. versus COMMISSIONER OF INCOME TAX-I, NEW DELHI [[2008] 15 S.C.R. 556] (2008) fa Sd 1.1.1954 6 AUSt of MAS SUIS “iS Cfas Wate HS t Ue vias Gusyy d= J awe di feasyot eas ada... Hau fez, Fs 1.4.2000 3 Me Hd fa Sugeno Halo! } Hans 43 fea HHS atsfer dn afugens @ va oe Hefas dh 6. Unt Hust t sees 'S aet St HUSH fuss WS thoes 45 t sfos can t al J fA feu saeats fam Atl (fe HHS 'S 18-.7.1969).RIOT 45 oT ree dl A HHS feu ase tM ors Usfers & Us HS gue Ah 10.20 g. 7. fFH HHS fed adets ewe fa foeds weg atst aet At fAA fed gue ct wHes TIA Tet At!2,03,364. GH aed Usd feu, fAH oS agen JS nrHee tt feeds TUS ast Tet Ht, SE JS FaSftmr famr at fr agefaut 1.1.1954 } Sfaa Gen St at "shes | us sare ot ve att Ah usact fist 30.9.1970 Atl GAH Us tus 5 feu, HBtaEaATS 6 Jo (54 noAg faas)- "fed Hod Je, load age de, fa Hane 45 tus SY Je Jo, dual 1 qaedt, 1954 3 fkaaHean wae, 1961 Ut Oe 49 WS 50 U MOH Md Nisdefad ct Sfus Hele HS tT FES Bet wruefeaey a eggs aqget di 8. HBtaSags eres BE t AOHE fed Ste fest Tet AT fa AaHe 55 (2) (i) @ sles we feasuazd3 ott aS Wet A A feo HeaEaGST Bet Sseka Hh can Se TS d far fa GH AS Aan 55(2) (i) @ 3fas fa feasu at fa At st Ut Hust (Sfear Sen) at cat ypUust St Barna sas F wT3 11.1954 6 fia 2 He & us Sarr we, A St ea dé ug A Ot ess od aa Hae’ faSta fAHHS fed YUSt ot Sas HUuCeHs od Hil feasue fev, wuisags & FS vissetea w Sfas HateHS OA ats! fas far 1.1.1954 . fest 30.9.1970 @ usd ward, agets& '-'-H 6 Urls gars wome ats] &. &. 6 Hfanr fa He FS HBAS GIS TSS A.J. cuss, 7] Gen 2 ere Hate HS ot omuet ye ut TEST 1.1.1954 6 Un atst Te fee fea fea Ye fH 'S CA§ feag ago dt Ags Ht-30.9.1970 $ fea t aed Usd WS OF atst aet UAT e oars t vias ctHos Ht. fA Ado fu, fea de aS Wh Hae AD fa Fa Sy gue w ret fest farm hi 10.20 Sa. st3 agents $ gas" ats famr at fA fed ages & gue tt adst wu UMS ats" HT 17, 22, 73, 246(1.1.1954 6 GeH Uw Wale HS gue '3 fegags ats fomr Si 10,41,51,625 gue '3 Ao ut SIsfesaras att wet Sl 6,81,21,621) PA 3g asets 3 eats fest fa Gudas Se-ee feu Gus 2 adsgue ow Unt wet fear Ah 7.02 J. fed Tea 86 wre Aelard od atst aet Ht fan d fuss 5 WSSHotont 2 Untage ¢ word 'S 5 BY gue t Unt os } Hdag” Sf Ah 1, 65, 34, 709 (Wud da:ਫ⬼> 42 0O K) 9. o. @. 2 crs 3 Et I a, fea We can Be TS ET wits Aas $ vats fee fer fare Ht(afiaed A rue fest 16.10.197.4 2 wrem ware fEA fe 3 udd fa, fA HHS feu, vB] Ada" ASEOot At, ') que St gan YUS (Heres) & YS HB! 10.20 J. A-1 Sen Svt Sa-sy Hush @ fevargWS OStA eH, 1961 Mae Ut os 48 U Cusa t sfos yuSt Ut Sas Ss Ao ot ous 6 fogagsAda HIE Sot At ws faGta Tes 3 Cas Mae Ut os 45 t sles WoT Cusat aS wide gu fednisor famr At, fea set 1961 Mae Mt os 45 2 sfos AGUSA, Aad Dd, ‘3 can SIGS Ase oct At 10. afHHSd t dHs 3 eat Ia fess d feos 6 Jes fes, TAA feu fas famr fo fH HHS fed,fagta can B= TSB 1.1.1954 6 SEH @ Sfus wade HS t ses Set wrueE feasy tt eas att FH,ott, 86 CH ord fegads Unt os t vias S ugve fed ystsut Atl 1, 65, 34, 709. 1. fH us '3, fa de ata wh Hae d fa an Se TS Ut Gost 3 fefeGas d aI HHS 1961 Maeot os 256 (1) & sfas Ta age § 3n fez A fa fee feat wet dae ors FaaTua He ferfamr At fesonua eHs fed, TH ade & Ht. wet. ch. gaTH wadcaH Hodauida aust (1997) 227wet. ct. urg. 260 feu fedue ats ae fA Ag]| SU ans ‘3 sgH ats fa "fFa Het SE-GE THe 12. fen Hes wile feu fagads ade Set A Aes Gow J Gd fea J fa at wracan Hodavidal aust(Gudas) feu feH ress w CHS HAE aH OS og Je di Ga afast fev, usiaeags, ka svetestSddit 11, 50, 400. HBidEaTT UST 8G 6 fest Tet Weard FS fed Hun Ht fat feat & feos Use,farmer At feos d cre esx fa feadt Sue de wo ASUSA Ma] MOT 41 (2) & sfas CanaAt ot fa Unt os e gu feul vet ade 3 fefaGas t SH Gus 6 use fer WS fas fo AIUSA US 45e sfos Unt os 2 gu feu canta do fa oe 41 2 Sfasl (2). wee 2 fred '3, fA wees d awus 3 drs fea fa sat wu an ewe gest fea we a1 (2) RE A gan 2 Ww fs og Ai11,50,400, fede t aS, uBic, HHlodt WS Fs Hoa dt ahs 6 foe fev due Je ats fomr Atnidt fa Hfeur famr fa, use, HAE WS as Aca U Sees 2 SSA eH AGUGA A Si oT At Aan41 (2) @ sfos wHeS @ gu fed Ft AaHe 45 t sfos Unt os t gu fed canta fea vfenr far Atfa faGta wHES OST 41 (2) tC stags can Set Wonuia A, FH Set Te age w fFsonu cue faafta snes Unt os e gu feu can Sa Wana At, TSS A.J. cuss, 7] Case: PNB FINANCE LTD. versus COMMISSIONER OF INCOME TAX-I, NEW DELHI [[2008] 15 S.C.R. 556] (2008) पिछले5 वर्षोंकेलाभकेपूंजीकरणकेआधारपररखनेकेलिए रुपयेकापूंजीगतलाभ।1,65,34,709 ( पेपरबुककापृष्ठ42 देखें)। एओकेफैसलेसेव्यथित, मामलाथा 9. निर्धारितीद्वाराअपीलीयसहायकआयुक्तकेसमक्षअपीलकीगई, जोअपनेदिनांक1 केआदेशशद्वाराइसनिष्कर्षपरपहुंचेकिइसमामलेमेंप्राप्तप्रतिफल(क्षतिपूर्ति) कापूरामूल्यआवंटितकरनासंभवनहींथा। रु. कीराशि।10.20 क्र. विभिन्नपरिसंपत्तियोंकेबीचउपक्रमकरनाऔर, परिणामस्वरूप,यहनिर्धारितकरनासंभवनहींथा अधिग्रहणकीलागतऔरसुधारकीलागत1961 केअधिनियमकीधारा48 केप्रावधानऔरचूंकिगणनाकोइसकेतहतप्रभारितप्रावधानोंकेसाथअटूटरूपसेजोड़ागयाथा उक्तअधिनियमकीधारा45 मेंअधिशेषषपरकरलगानासंभवनहींथा। यदिकोईहोतो1961 केअधिनियमकीधारा45 केतहत। 10. आयुक्तकेनिर्णयसेव्यथितहोकरविभागनेन्यायाधिकरणकोनिर्देशशदियाजो यहविचारलियाकि, इसमामलेमें, चूंकिनिर्धारितीने केउचितबाजारमूल्यकेप्रतिस्थापनकेलिएअपनेविकल्पकाप्रयोगकिया 1.1.1954 केअनुसारयहवचननिर्धारितीकेलिएखुलानहींथा। यहतर्कदेनेकेलिएकिअधिग्रहणकीलागतगणनायोग्यनहींथीऔर, इसलिए, एओपूंजीकेआंकड़ेपरपहुंचनेमेंसहीथा उसकेद्वारारुपयेमेंनिर्धारितलाभ।1,65,34,709 . [ 2008 ]15 एससीआर। सर्वोच्चन्यायालयकीरिपोर्ट 562 11. इसस्तरपर, यहध्यानदियाजासकताहैकिअनुरोधपर निर्धारितीनेन्यायाधिकरणने1961 केअधिनियमकीधारा256 (1) केतहतमामलेकोउच्चन्यायालयकोभेजाजिसमें दिल्लीउच्चन्यायालयनेयहफैसलासुनायाथा।उलझनमें निर्णय, उच्चन्यायालयनेसी. आई. टी. बनाममेंइसन्यायालयकेनिर्णयपरभरोसाकिया।आर्टेक्समैन्युफैक्चरिंगकंपनीने(1997) 227 आई. टी. आर. मेंसूचनादी 260 इसेरखनेकेलिए"मंदीलेनदेनकेमामलेमेंजब व्यवसायएकचालूसंस्थाकेरूपमेंबेचाजाताहै, यहअसंभवनहींहै वास्तविकलागतकानिर्धारणकरें, अर्थात्, अधिग्रहणकीलागत, यहांतककि हालांकि, किसीमामलेमें, यहएकस्व-उत्पन्नसंपत्तिहोसकतीहै। इसनागरिकमेंनिर्धारणकेलिएजोप्रश्नउत्पन्नहोताहै 12. अपीलयहहैकिक्याआर्टेक्समैन्युफैक्चरिंगकंपनी(ऊपर) मेंइसन्यायालयकानिर्णयवर्तमानमामलेमेंलागूहोताहै।उसमामलेमें, निर्धारिती, एकसाझेदारीफर्म, नेअपनेव्यवसायकोबेचनेकेलिएकंपनीकेसाथएकसमझौताकिया रुपयेकाविचार।11,50,400 . निर्धारितीद्वाराएओकोदीगईजानकारीसेयहस्पष्टथाकिबिक्री मूल्यांकनकर्ताद्वारागणनाकिएगएसंयंत्र, मशीनरीऔरडेडस्टॉककेमूल्यकोध्यानमेंरखतेहुएविचारकियागया। न्यायाधिकरणनेअभिनिर्धारितकियाकिबिक्रीपरउत्पन्नअधिशेषषअधिनियमकीधारा41 (2) केतहतकरयोग्यहैनकिपूंजीगतलाभकेरूपमें।उच्चन्यायालयनेन्यायाधिकरणकेउसनिष्कर्षकोउलटदियाऔरकहाकिकिअधिशेषषधारा45 केतहतपूंजीगतलाभकेरूपमेंकरयोग्यथानकिधारा41(2) केतहत।राजस्वकेआग्रहपर, इसन्यायालयनेएकअपीलपरयहअभिनिर्धारितकियाकितथ्योंपरऔर रुपयेकीराशि।11,50,400 , विचारकियाजारहाहै, आगयाहैसंयंत्र, मशीनरीऔरमृतस्टॉककेमूल्यकोध्यानमेंरखतेहुए।आगेयहअभिनिर्धारितकियागयाकिइसकेपरिणामस्वरूपअधिशेषष संयंत्र, मशीनरीऔरमृतस्टॉककेहस्तांतरणसेयातोधारा41 (2) केतहतआयकेरूपमेंयाधारा45केतहतपूंजीगतलाभकेरूपमेंकरयोग्यथा।यहअभिनिर्धारितकियागयाथाकिचूंकिआयधारा41(2) केतहतकरकेलिएप्रभार्यथी, इसलिएउच्चन्यायालयकाविवादितनिर्णय न्यायालयनेकहाकिऐसीआयपरपूंजीगतलाभकेरूपमेंकरलगायाजाताथागलतथा। पी. एन. बी. वित्तलिमिटेडv. आयआयोग563कर-I, नईदिल्ली[एस. एच. कपाडिया, जे.] 13. केनिर्णयकीप्रयोज्यतातयकरनेकेलिए आर्टेक्समैन्युफैक्चरिंगकं. (ऊपर) मेंइसन्यायालयकोहमें धारा41 (2) केदायरेकीजांचकरें।शुरुआतमेंयहध्यानदियाजासकताहैकिइसमामलेमेंविभागनेइसपरभरोसानहींकियाहैधारा41 (2)।वास्तवमें, नीचेदिएगएअधिकारियोंमेंसेकोईभीनहीं, इसकेअलावा उच्चन्यायालयनेधारा41 (2) परभरोसाकियाहै।पहलीबार, धारा41 (2) परभरोसाकरतेहुए,उच्चन्यायालयने निर्धारितीकेकहनेपरशुरूकियागयासंदर्भ। धारा41 (2) केवलबिक्रीकेमामलेमेंआकर्षितहोतीहै। 14. दूसरेशशब्दोंमें, धारा41 (2) मूल्यह्रासकीबिक्रीपरलागूहोतीहै।संपत्ति।दूसरा, इसतरहकीबिक्रीसेप्राप्तराशिऐसेभवन, मशीनरी, संयंत्रकेलिखितमूल्यसेअधिकहोनीचाहिए। याफर्नीचर।धारा41 (2) मेंकहागयाहैकिकुछलाभ भवन, मशीनरी, संयंत्रयाफर्नीचरकानिपटानहोगापिछलेवर्षकालाभमानाजाताहै।धारा 41 (2) निर्दिष्टकरतीहै एक"संतुलनशुल्क" कीअवधारणाकेलिएजोकेवलतबउत्पन्नहोतीहैजबमूल्यह्रासयोग्यसंपत्तिबेचीजातीहै।धारा41 (2) संतुलनशुल्क(लिखितमूल्यऔरलिखितमूल्यकेबीचकाअंतर) परकरलगातीहै। मूल्यह्रासयोग्यसंपत्तिकीऐतिहासिकलागत) बिक्रीपर।धारा41 (2) काअंतर्निहितउद्देश्य1961 केअधिनियमकेतहतकटौतीकेमाध्यमसेअनुमतमूल्यह्रासकीभरपाईकरनाहै।मूल्यह्रासयोग्यसंपत्ति।धारा41 (2) कोआकर्षितकरनेकेलिएविषषयवस्तु मूल्यह्रासयोग्यपरिसंपत्तिऔरप्राप्तप्रतिफलहोनाचाहिएविभिन्नपरिसंपत्तियोंकेबीचआवंटनकरनेमेंसक्षमहोनाचाहिए। 15. धारा41 (2) औरधारा45 विभिन्नक्षेत्रोंमेंकामकरतीहैं। सी. आई. टी. केमामलेमेंv. मुगनीरामबांगुरएंडकंपनीनेरिपोर्टकिया Case: PNB FINANCE LTD. versus COMMISSIONER OF INCOME TAX-I, NEW DELHI [[2008] 15 S.C.R. 556] (2008) B 6. Any surplus on transfer of capital asset is chargeable to tax under Section 45 in the previous year in which the transfer took place (i.e. in this case on 18-.7.1969). This is the mandate of Section 45. The full value of consideration received by the assessee in this case was Rs. 10.20 er. c 7. A Return was filed in this case by the assessee showing an income of Rs. 2,03,364. In the covering letter with which the Return of Income was filed by the assessee it was noticed by the AO that the assessee had opted for having the value D [ascertained of ][the ][banking undertaking ][as ][on ][1.1.1954. The ]letter was dated 30.9.1970. In para 5 of that letter, the assessee stated as follows: "Assuming, while denying, that the provisions of Section 45 are applicable, the Company exercises its option for substitution of the fair market value of such Undertaking as on 1st January, 1954 in accordance with Section 49 & 50 of the Income Tax Act, 1961." E 8. It was argued by the assessee before th~ AO that the F [option ][under Section 55(2)(i) ][was ][to ][be ][exercised ][only ][if it ][was ]advantageous to the assessee. The assessee submitted that he had an option under Section 55(2)(i) of having the value of the undertaking ascertained either on the basis of historical cost of acquisition of the capital asset (banking undertaking) G [or having its value ascertained ][as ][on ][1.1.1954, whichever ][is ]higher but could not exercise it as the cost of acquisition in this case was not computable. In the alternative, appellant-assessee herein submitted fair market value of the undertaking as on 1.1.1954. By letter dated 30.9.1970, assessee claimed H [a capital loss. The ] [held that since the assessee had ] ·--.--- \- ,• < ....(_ ,• ;.- -~ ;/ .---- )-- }'- ~ . '-'"- ~ I .. ' ~ ~ --'( .L A submitted its own computation of the fair market value of the A undertaking as on 1.1.1954 the only question he was required to consider was the correctness of the figure of capital loss submitted by the assessee vide its covering letter dated 30.9.1970. In this connection, it may be noted that compensation of Rs. 10.20 er. was paid to the assessee from which assessee claimed deduction of Rs. 17,22, 73,246 I (market value of the undertaking as on 1.1.1954 fixed at Rs. 10,41,51,625 plus cost of improvement fixed at Rs. 6,81,21,621). This is how the assessee contended that it had in the above transaction suffered a capital loss of Rs. 7.02 er. !C This calculation was not accepted by the AO who proceeded to hold on the basis of capitalization of last 5 years profits the capital gains of Rs. 1,65,34, 709 (see page 42 of the Paper Book). B I D 9. Aggrieved by the decision of the AO, the matter was carried in appeal by the assessee to the Appellate Assistant Commissioner who by his order dated 16.10.197 4 came to the conclusion that, in this case, it was not possible to allocate the full value of the consideration received (compensation) amounting to Rs. 10.20 er. between various assets of the undertaking and, consequently, it was not possible to determine the cost of acquisition and cost of improvement under the provisions of Section 48 of the 1961 Act and since computation was inextricably linked with the charging provisions under Section 45 of the said Act it was not possible to tax the surplus, if any, under Section 45 of the 1961 Act. E I F 10. Aggrieved by the decision of the Commissioner, the Department went by way of Reference to the Tribunal which took the view that, in this case, since the assessee had exercised its option for substitution of fair market value of the undertaking as on 1.1.1954 it was not open to the assessee to contend that cost of acquisition was not computable and, therefore, the AO was riGht in arriving at the figure of capital gains fixed by him at Rs. 1,65,34,709. .G I I H' A Case: PNB FINANCE LTD. versus COMMISSIONER OF INCOME TAX-I, NEW DELHI [[2008] 15 S.C.R. 556] (2008) A.J. cuss, 7] 13. erdean Agdasida aust (Gudas) feu eA ess C SHS § BY ado T CHS Ags BA ASAg feo OT 41 (2) Cotes Ut Aid ade U ag J fed Oc aT HT Hae J fa A festa S aT 41 (2)Sar ada ds wd age 3 yesEaET 2 hers 3 Hg a3 Te Ves § aH aa fer di AsO41 (2) faae fues we fee frags, uAlod, uBte Ht cddted TH feadt Cs fea wrasfas Jeton weet fea Aone 41 (2) weber we ot feadt S og de J ILS, wird feadt F yUus Jan wifadot frgst t uAtodt ustet At casted t Bust Het F eadet Wott Ji os 41 (2) ea far fomr J fa feurgs, Hod, use? i caalud t usd S ay USfuss WS Pos Hd Wed Rane 41 (2) Fa AgesA. oh. a. @ Hasu S caNGe Ia Ce ct derAAAS41 (2) 1961 Mae & Slos wer Hust feadsa $ aes B gu feu urfamr fest Tet We chs6 YS YUS Ada" dl HAH 41 (2) 6 WadlHs ado Set fer HZ vic de Ua det watt J 15. 7S 41 (2) WS OST 45 y-ey US feud GH ade Jo At wet St HOH HASH ST us AESHHS fed fade (1965) 57 wet ct wg 299 feu fA weTSs 6 CHS feS fa FAS SoH Ty adadHAS ats 'S Sfour fomr At Aa 41 (2) 23 wagfas odt ats famr At ug faa AHS ada }J, HAAS41 (2) t fedad visg U de sa TY Jan t Aeg feu us Jer fH sg sade atst Tet We ats Sst Hust & feast HS wi fen ct WAS BSI 16. WIAA Hodavida aust (Gudas) t HHS fed fA TSS S Ue fa ka SBE” S for Htfa SST & at S wrust Teens fade UA atst At fAA feu »retcntins eeeno atst Tet Atwf fA word ‘3 feos gue 3 fears ats farmr Ft 11, 50, 400.00. fA Bet, feadt & fears HEfide =H, feo Hfeor famr at fe feadt ‘3S det de ae HSUSA Na| Ut oS 41 (2) @ Blas canua Ata fet uxt os eH Hot vest feu, wdcaH Hodaulda aust (Gudas) t HHS feu fA weTSSsdHS' Hae’ aH G3 BY od A fH S are, EA ISS O HT. wret. ch. aH fesaled deds st aimgHodastda Sust (1997) 227 ret. a. urge. 278 2 WHS fee fro dae es J fa at caerfa Het ahr fast ugdt, Gos 41 (2) tt aet wget ot Hh fed fowre te fesuny J fa fesafer aedsdima Agdauida & aust (Gudas) t HHS fea drs CA Se wore fez femr gd fAA dS wracanHodastda sust HHS & SHS ata At ws fev, Ue SHS 227 ret. a. org. feu Fa F are Rafadde ats Are JS! 260 WS 278 SHeS. Hoe’ HHS feu, fre fa fest Te Age t FsanuT gHs Fchm A Hae" J, sated dds dim Hodaulda auat (Gudas) fe fA ess w CAS Ye famdl fH dns '3 Tet age 3 feos of ats TI fre fa Gua Cir famr dg, fas Sales aeds dmgAun ats fH et, oT 41 (2) He HHS 2 Sat 'S og odt Jet 17. faa Sa AaHS45 UST dew Ad d, fo cnet 6 BG aga tt Bs Ji A WHS fev, Fans 45tg og de Ji eA ye 3 adt fees oot JI ulser ene fea J fa A.J. cuss, 7] He & a tetas as wT Too ats" EH Set, fa Tes t yea og odt 3 Hae, Fa Ane J fa wieHHS Odd Hane tues wee w fore od At, A fa Hee WHS feu Aan 45 JI GA Hans fedfeos ats far ¢ fa unt Hush @ seared OS de oar adt a HauSA fled wes feu can t tatfan feu Hed of dir At fA an feu, Hed 18.7.1969 6 dew. et ce HAO ST ado otngs 3 Gd werche Mediene w ene JI fa ene FA ess t ans feu At fea fSftmr famr diHdIOIdH Stag vf3 duct fea cn fa FAS Seve C3 og Je di eH cue @ fle Gen a ussree J fa at freee & ahs fevastas Aust & age de 2 And A, fAA } eAZ-eGenigHdtad Ft fas Are di sh Sue fea J fa Fa STH 1B Ex 2 fofimr feu Fa Fasfue visg Jeedit was SAS St AHS J Hae Jol TST, wid dha (mu) ct ahs fasass octatst FW Hot. Areict St. ShAhe HHS fedl ASSH Het > (1981) 123 wet. ch. wg. 294 feu faddefest, eA wees & cas fer fa os 45 UHt Hust t wnieo-can fev seus S de SS Hote 7SS SUH adel Jl en wae feu, fra HUSA Wan ase’ I GA Aust Curt dee ede gu fedJOT 45 @ feos utiio wet Ji vidt Fa Hour wre J fa, at a wte wafta Aare ws augersSai '3, wt ure fa wrten-eg Hse oof At. Sar 3S, wat Sue a fa 10.20 /- Srg Que @ yew(gat fed)! fad fa wracan Hodaufdal aust feu At, ZA WOH USS ATO Ud! Oct Ah (Gud). 18. Hast SS agai aga, wet Hoe ofa fA AAO Se nS TES 3, A fa 8 FS 1970-71 CHetaEoS Aes J, Yat os Ut Tea ada Ase odt At ws fA Bet, gue ct Gas Jan. 10.20 3a. 1961Mae ot ors 45 wile Cantal Sot th eH wigHS, esr cHs $ Je ag fer Ae SI Case: PNB FINANCE LTD. versus COMMISSIONER OF INCOME TAX-I, NEW DELHI [[2008] 15 S.C.R. 556] (2008) मूल्यह्रासयोग्यसंपत्तिकीऐतिहासिकलागत) बिक्रीपर।धारा41 (2) काअंतर्निहितउद्देश्य1961 केअधिनियमकेतहतकटौतीकेमाध्यमसेअनुमतमूल्यह्रासकीभरपाईकरनाहै।मूल्यह्रासयोग्यसंपत्ति।धारा41 (2) कोआकर्षितकरनेकेलिएविषषयवस्तु मूल्यह्रासयोग्यपरिसंपत्तिऔरप्राप्तप्रतिफलहोनाचाहिएविभिन्नपरिसंपत्तियोंकेबीचआवंटनकरनेमेंसक्षमहोनाचाहिए। 15. धारा41 (2) औरधारा45 विभिन्नक्षेत्रोंमेंकामकरतीहैं। सी. आई. टी. केमामलेमेंv. मुगनीरामबांगुरएंडकंपनीनेरिपोर्टकिया ( 1965 ) 57 आई. टी. आर. 299 इसन्यायालयनेअभिनिर्धारितकियाकिजहाँपूराव्यवसाय मूल्यह्रासयोग्यपरिसंपत्तियोंऔरदेनदारियोंकोएकसमग्रमूल्यपरबेचागयाथाबिनाकिसीवस्तुकेमूल्यनिर्धारितकिए, धारा41 (2) नहींथी आकर्षितकिया।लेकिन, जहांएकचालूसंस्थाकेरूपमेंपूरेव्यवसायकाहस्तांतरणशामिलहैऔरअनुबंध-वस्तुवारइंगितकरताहै विचारकरनेपर, धारा41 (2) इससंबंधमेंआकर्षितहोगी। सर्वोच्चन्यायालयरिपोर्ट[2008] 15 एस. सी. आर. केबीचअंतरकीसीमातकअधिशेषषकीराशि। 564 इसप्रकारहस्तांतरितमूल्यह्रासयोग्यसंपत्ति(ओं) कालिखितमूल्य औरइसकीवास्तविकलागत। आर्टेक्समैन्युफैक्चरिंगकं. (ऊपर) केमामलेमेंयह 16. यहअभिनिर्धारितकियागयाथाकिबिक्रीपरउत्पन्नअधिशेषषकेतहतकरयोग्यथाअधिनियमकीधारा41 (2) औरपूंजीगतलाभकेरूपमेंनहीं।में परिस्थितियां, आर्टेक्सकेमामलेमेंइसन्यायालयकानिर्णय विनिर्माणकंपनी(उपरोक्त) वर्तमानमेंलागूनहींथी। मामला।इसकेअलावा, सी. आई. टी. बनामकेमामलेमेंयहन्यायालय।इलेक्ट्रिककंट्रोलगियरमैन्युफैक्चरिंगकंपनी(1997) 227 आईटीआर278 नेमानाहैकि क्यासाक्ष्यकेअभावमेंनिर्धारितीकाव्यवसायबिक्रीमूल्यमेंगिरावटकेलिएएकचालूचिंताकेरूपमेंस्थानांतरितकियागयाथा रिकॉर्डपरकिमंदीकीकीमतकैसेआई, अनुभाग 41 ( 2 ) कोईआवेदननहींथा।दिलचस्पबातयहहैकिइलेक्ट्रिककंट्रोलगियरमैन्युफैक्चरिंगकेमामलेमेंफैसला कंपनी(उपरोक्त) उसीपीठद्वारादीगईहैजिसनेआर्टेक्समैन्युफैक्चरिंगकंपनीकेमामलेकाफैसलाकियाथा।वास्तवमें, दोनोंनिर्णयहैं पी. पी. पर227 आई. टी. आर. मेंएककेबादएकसूचनादी।260 औरक्रमशः278।वर्तमानमामलेमें, जैसाकिदेखाजासकताहै दिल्लीउच्चन्यायालयकाविवादितनिर्णय, इलेक्ट्रिककंट्रोलगियरमैन्युफैक्चरिंगकंपनी(ऊपर) मेंइसन्यायालयकानिर्णय।छूटजाताहै।उसफैसलेपरउच्चन्यायालयनेविचारनहींकियाहै।जैसाकिऊपरकहागयाहै, इसन्यायालयनेस्पष्टकियाहैकि आर्टेक्समैन्युफैक्चरिंगकंपनी(ऊपर) मेंअपनेफैसलेमेंनिर्णय इलेक्ट्रिककंट्रोलगियरमैन्युफैक्चरिंगकंपनीकेमामलेमें, धारा41 (2) कातथ्योंपरकोईअनुप्रयोगनहींहै वर्तमानमामला। 17. जहांतकधारा45 कीप्रयोज्यताकासंबंधहै, तीनपरीक्षणोंकोलागूकरनेकीआवश्यकताहोतीहै।इसमामलेमेंधारा45 लागूहोतीहै।इसबातपरकोईविवादनहींहै।पहलापरीक्षणयहहैकिपी. एन. बी. फाइनैंसलिमिटेडv. आयआयुक्त565 कर-I, नईदिल्ली[एस. एच. कपाडिया, जे.] प्रभारअनुभागऔरसंगणनाप्रावधानहैं अटूटरूपसेजुड़ाहुआ।चार्जिंगअनुभागऔरगणनाप्रावधानोंनेमिलकरएकएकीकृतसंहिताकागठनकिया।इसलिए, जहाँगणनाकेप्रावधानलागूनहींहोसकतेहैं, यहस्पष्टहैकि ऐसामामलाआरोपअनुभागकेअंतर्गतआनेकाइरादानहींथा, जोवर्तमानमामलेमेंधारा45 है।वहखंड इसबातपरविचारकरताहैकिपूंजीकेहस्तांतरणपरउपार्जितकोईअधिशेषष परिसंपत्तियाँपिछलेवर्षमेंकरकेलिएप्रभार्यहैंजिसमेंहस्तांतरणहुआथा।इसमामलेमें, हस्तांतरण18.7.1969 परहुआ।द. दूसरापरीक्षणजिसेलागूकरनेकीआवश्यकताहैवहआवंटन/आरोपणकापरीक्षणहै।इसपरीक्षणकोइसन्यायालयकेफैसलेमेंलिखागयाहै मुगनीरामबांगुरएंडकंपनी(ऊपर)।यहपरीक्षणमंदीपरलागूहोताहै। परिसंपत्तियाँ, जिन्हेंवस्तु-वारनिर्धारितकरनेकेरूपमेंभीजानाजाताहै।तीसरापरीक्षणयहहैकिएककेबीचएकवैचारिकअंतरहैउपक्रमऔरउसकेघटक।संयंत्र, मशीनरीऔरडेडस्टॉकएकउपक्रमकीव्यक्तिगतवस्तुएँहैं।कारोबारउपक्रममेंनकेवलमूर्तवस्तुएंशामिलहोसकतीहैं, बल्किसद्भावना, मानवशशक्ति, किरायेदारीअधिकारऔरबैंकिंगलाइसेंसकामूल्यजैसीअमूर्तवस्तुएंभीशामिलहोसकतीहैं।हालांकि, ऐसीवस्तुओं(अमूर्त) कीकीमतनिर्धारितनहींकीजासकतीहै।सी. आई. टी. केमामलेमेंv. बी. सी. श्रीनिवाससेट्टीने(1981)128 आई. टी. आर. 294 मेंप्रतिवेदनदिया, इसन्यायालयनेकहा किधारा45 सेउत्पन्नहोनेवालेलाभयालाभकाप्रभारलियाजाताहै आय-करमेंपूंजीपरिसंपत्तिकाहस्तांतरण।दूसरेशशब्दोंमें, यह अधिशेषषप्रभारजोपूंजीपरिसंपत्तिकेहस्तांतरणपरउत्पन्नहोताहै उसपरिसंपत्तिकेपूँजीमूल्यकेमूल्यांकनकेसंदर्भमें।उक्तनिर्णयमें, इसन्यायालयनेअभिनिर्धारितकियाकि"संपत्ति" वहहोनीचाहिएजो एकएकीकृतसंहिताकागठनकरताहैऔरजबकिसीमामलेमेंगणनाकेप्रावधानलागूनहींहोसकतेहैं,तोऐसामामलाधारा45 केअंतर्गतनहींआएगा।वर्तमानमामलेमें, बैंकिंगउपक्रम, अन्यबातोंकेसाथ-साथ, सद्भावना, किरायेदारीजैसीअमूर्तपरिसंपत्तियाँभीशामिलथीं। Case: PNB FINANCE LTD. versus COMMISSIONER OF INCOME TAX-I, NEW DELHI [[2008] 15 S.C.R. 556] (2008) E I F 10. Aggrieved by the decision of the Commissioner, the Department went by way of Reference to the Tribunal which took the view that, in this case, since the assessee had exercised its option for substitution of fair market value of the undertaking as on 1.1.1954 it was not open to the assessee to contend that cost of acquisition was not computable and, therefore, the AO was riGht in arriving at the figure of capital gains fixed by him at Rs. 1,65,34,709. .G I I H' A A 11. At this stage, it may be noted that on the request of the assessee the Tribunal referred the matter to the High Court under Section 256(1) of the 1961 Act in which the impugned judgment had been given by Delhi High Court. In the impugned judgment, the High Court relied upon the decision of this Court B in CIT v. Artex Manufacturing Co. reported in (1997) 227 ITR 260 to hold that "in the case of a slump transaction when the business is sold as· a going concern, it is not impossible to determine the actual cost, namely, the cost of acquisition, even though, in a given case, it may be a self-generated asset." c 12. The question which arises for determination in this civil appeal is whether judgment of this Court in Artex Manufacturing Co. (supra) is applicable to the present case. In that case, the assessee, a partnership firm, entered into an agreement with the company to sell its business as a going concern for a D consideration of Rs. 11,50,400. From the information supplied by the assessee to the AO, it was evident that the sale consideration stood arrived at after taking into account the value of plant, machinery and dead stock as computed by the valuer. The Tribunal held that, the surplus arising on the sale was E taxable under Section 41 {2) of the Act and not as capital gains. The High Court reversed that finding of the Tribunal and held that the surplus was taxable as capital gains under Section 45 and not under Section 41 (2). At the instance of the Revenue, this Court on an appeal held that on the facts and in the F circumstances of the case Section 41 (2) was applicable as the amount of Rs. 11,50,400, being the consideration, stood arrived at by taking into consideration the value of the plant, machinery and dead stock. It was further held that, the surplus resulting from transfer of plant, machinery and dead stock was either G . taxable as income under Section 41 (2) or as capital gains under Section 45. It was held that since income was chargeable to tax under Section 41 (2), the impugned decision of ~he High Court that such income was chargeable to tax as capital gains was erroneous. I I ., ' -... I . . 13. In order to decide the applicability of the judgment of Athis Court in Artex Manufacturing Co. (supra) we need toexamine the scope of Section 41(2). At the outset, it may benoted that, in this case, the Department has not relied uponSection 41(2). In fact, none of the authorities below, apart fromthe High Court, has relied upon Section 41(2). For the first time,Brelying upon Section 41(2), the High Court has dismissed theReference initiated at the behest of the assessee. Case: PNB FINANCE LTD. versus COMMISSIONER OF INCOME TAX-I, NEW DELHI [[2008] 15 S.C.R. 556] (2008) fad fa wracan Hodaufdal aust feu At, ZA WOH USS ATO Ud! Oct Ah (Gud). 18. Hast SS agai aga, wet Hoe ofa fA AAO Se nS TES 3, A fa 8 FS 1970-71 CHetaEoS Aes J, Yat os Ut Tea ada Ase odt At ws fA Bet, gue ct Gas Jan. 10.20 3a. 1961Mae ot ors 45 wile Cantal Sot th eH wigHS, esr cHs $ Je ag fer Ae SI 19. fie ave S ufasi, wat afa Hae ai fa fH HS feu, AaHS 55 (2) (i) TITAS oot Hh AerrS55 (2) U Sf 1.1.1954 $ Sfes Waele HS yUSt ot ods t vias 6 FES Hae Ht SAS "ust ctSTS" WF "11.1954 } Sfas wate HS" te 2 vias fags ats Ht Hael fst 30.9.1970 w Usd‘St dive wv Has ot fee! Fa sa fa fuss 5 Wate yoteni t Uniaga t norg 'S 86 wr atsfar oH ft visser uw GcH HS ter a fa ypust ot Sas fA Set GI 55 (2) ST oct At 20. fie eh, aaeaut ere ws ast at fhes unite } vsfent & Asa fee feat fan wea 2afar fest ArT ct Stat et. mAs co fans fest ae +ਿ:ਕ:O0: :- oT fed MvE Sa ot HS J wis fener far dg Cea Se ASH od aT 7 AAT:>:O +ਵ;>:ਕ Sond fest wea Advocate Shifa Kler Case: PNB FINANCE LTD. versus COMMISSIONER OF INCOME TAX-I, NEW DELHI [[2008] 15 S.C.R. 556] (2008) आय-करमेंपूंजीपरिसंपत्तिकाहस्तांतरण।दूसरेशशब्दोंमें, यह अधिशेषषप्रभारजोपूंजीपरिसंपत्तिकेहस्तांतरणपरउत्पन्नहोताहै उसपरिसंपत्तिकेपूँजीमूल्यकेमूल्यांकनकेसंदर्भमें।उक्तनिर्णयमें, इसन्यायालयनेअभिनिर्धारितकियाकि"संपत्ति" वहहोनीचाहिएजो एकएकीकृतसंहिताकागठनकरताहैऔरजबकिसीमामलेमेंगणनाकेप्रावधानलागूनहींहोसकतेहैं,तोऐसामामलाधारा45 केअंतर्गतनहींआएगा।वर्तमानमामलेमें, बैंकिंगउपक्रम, अन्यबातोंकेसाथ-साथ, सद्भावना, किरायेदारीजैसीअमूर्तपरिसंपत्तियाँभीशामिलथीं। अधिकार, मानवशशक्तिऔरबैंकिंगलाइसेंसकामूल्य।तथ्योंपर, हमपातेहैंकिवस्