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Sale Of Entire Business As Running Concern Can’t Be Considered ‘Short-Term Capital Assets’

The Supreme Court, in Commissioner of Income Tax, Ahmedabad, vs Equinox Solution Pvt Ltd, has held that Section 50 (2) of the Income Tax Act will not apply to a case where the entire running business with assets and liabilities is sold by the assessee in one go, as such sale cannot be considered as “short-term capital assets”.

Dismissing the Revenue’s appeal against a Gujarat High Court ruling, the bench held that provisions of Section 50 (2) of the Act would apply to a case where the assessee transfers one or more block of assets, which he was using in running of his business, and not when the entire business, as a running concern, is sold by the assessee.

Article referred:http://www.livelaw.in/sale-entire-business-running-concern-cant-considered-short-term-capital-assets-sc-read-judgment/

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