[2022]

136 taxmann.com 81 (Article)

[2022] 136 taxmann.com 81 (Article)

Date of Publishing: March 7, 2022

Slump Sale: Scope in the Indian Corporate

Scenario

PARIEKH PANDEY
Abstract

Disinvestment is one of the most prominent methods adopted by the

Indian Government, and preferred by private entities, for raising funds
in the name of the enterprise by relinquishing its control. However,
slump sale is one of the widely known but less opted methods of
disinvestment, due to the complexities involved in its implementation,
which is one of the factors behind the weak legislative backing
accorded to it by both the Central Legislature and SEBI. Apart from the
Income Tax Act, 1961 and the Companies Act, 2013 presenting a basic
structural framework for simply defining the legal boundaries of slump
sale, the role of the Indian judiciary in developing the required
jurisprudence for slump sale is very bleak and requires more attention.

Therefore, the present short note attempts to venture into the concept
of disinvestment and the various approaches historically recognised in
India for the same. The note describes the modes of disinvestment
prevalent in the Indian corporate sphere, followed by a focus on Slump
Sale as one of the lesser opted and materialised methods of
disinvestment on the part of both the Indian Government and individual
private entities and stakeholders. The study not only addresses both
the legislative and judicial constraints imposed on the implementation
of Slump Sale, but also weighs its positive features against its negative
legal implications, ultimately realising the need for the Indian
legislature or the SEBI to incorporate specific provisions delineating
the actual procedural boundaries for companies to adopt this mode of
disinvestment.

Keywords: Slump Sale, Disinvestment, Corporate, Income Tax,

Companies Act

1. INTRODUCTION

Disinvestment mainly refers to the action of an organisation or the

government, selling or liquidating an asset or subsidiary related to it1.
At the very basic level, it can be explained as the conversion of money
claims or securities into money or cash. However, in most contexts, the
term is used typically to refer to the sale from the government, partly
or fully, of a government-owned enterprise2. A similar concept is
privatisation, which in actuality is a part of the broader concept of
disinvestment. For instance, if the Government retains 26 per cent of
the shares carrying voting powers, while selling the remaining to a
strategic buyer, it would have disinvested but not privatised, since it
can still stall vital decisions for which a special resolution is needed3.

Disinvestment is aimed at reducing the financial burden on the

government due to inefficient PSUs, as well as to improve public
finances4. Apart from this, it also refers to capital expenditure
reductions, which can facilitate the re-allocation of resources to more
productive areas within an organisation or government-funded project.
The primary objective of disinvestment is to maximise the return on
investment on the expenditures pertaining to capital goods, labour and
infrastructure5. In this regard, economist Ila Patnaik believes that
disinvestment increases the efficiency of utilisation of resources, both
labour and capital.6

2. HISTORY OF DISINVESTMENT

The policy of disinvestment has considerably evolved ever since it has

been understood and contemplated that in order to raise more financial
resources and encourage wider participation by the public, a major
part of the government's shareholding in the public sector would be
offered to mutual funds and financial institutions, as well as workers
and the general public.7

2.1. Initiation of concept

The concept of disinvestment received global recognition in the United

Kingdom in the 1980s, entailing tremendous success. Consequently,
countries like Germany, Russia, Canada, Japan and Western European
countries soon followed suit. It must be noted that even China relaxed
its Marxist approach and indulged in a combined approach of
disinvestment and privatisation, in lieu of the benefits accrued in terms
of increased efficiency, acquisition of new markets and advanced
techniques, as well as recognition of interests of foreign investors.8

2.2. Development in India

The concept spread its wings in India in 1991, when the high Balance
of Payments compelled the Indian government to open the Indian
economy to international trade and commerce, which had been
achieved by adopting policies such as opening up of foreign investment
and trade, deregulation of international transactions including imports
and exports, privatisation and inflation control measures, among
others.9 The need for this arose due to the shortcomings of the public
sector being manifested as low capacity utilisation and low efficiency in
various aspects. This was because the phenomenal growth of PSUs in
India in the later decades of the 20th century did play a key role in
accelerating the growth of the Indian economy, but could not protect
them from being afflicted with grave shortcomings and defaults
requiring urgent corrective measures for their alleviation.10

It was announced in 1991 by the Indian government that disinvestment

to the extent of 20% was to take place in selected PSUs, their shares
being sold to Mutual Funds and financial institutions like LIC, UTI
etc.11 In 1993, the renowned Rangarajan Committee suggested a
sectoral division, recommending a 49% disinvestment in PSUs reserved
for public sector only, and 74% disinvestment in other PSUs to promote
the participation of the private sector in the economy. However, it was
not adopted or implemented by the government. This was followed by
the formation of the Disinvestment Commission in 1997, which
recommended, inter alia, the restructuring and reorganising of PSUs,
strengthening well-performing enterprises and utilise the
disinvestment proceeds funding them.12

As per the 1998-99 Budget, the Indian government lowered its

shareholding in state-owned firms to 26%, while continuing to maintain
a majority stake in public sector companies which were considered as
strategic. This was immediately followed by the creation of a new
Department of Disinvestment in 1999, which was converted into a full-
fledged ministry in 2001.13 Consequently, in 2005, to honour its
manifesto, the UPA Government formed a National Investment Fund
(NIF), mandating the utilisation of 75% of the annual funds for social
sector schemes, for the purposes of promoting education, health and
employment. However, it was waived in 2008 for 3 years, due to the
economic recession of 2008-09, and was later restructured in 2013 to
provide some flexibility in the usage of the NIF.14

3. HOW CAN DISINVESTMENT BE CARRIED OUT?

3.1. Modes of disinvestment

Faced with the challenge to keep fiscal deficit under check, the
Government has set higher and more updated targets with each
passing year in the last decade. In order to meet these targets, apart
from the existing traditional modes, the Indian Government revived
certain schemes, made significant changes and modifications in others,
and over the time introduced new ideas to broaden the base of choice
of alternatives available for disinvestment.15

Giving regard to the financial year of 2017-18, the Department of

Investment and Public Asset Management (DIPAM), currently dealing
with the topic of investment, recognises the following methods of
disinvestment:

(1) Initial Public Offering (IPO) – It refers to the offer of shares by

an unlisted Central Public Sector Enterprise (CPSE) or the
Government out of its shareholding or a combination of both
to the public for subscription for the first time.
(2) Further Public Offering (FPO) – It refers to the offer of shares
by a listed CPSE or the Government out of its shareholding or
a combination of both to the public for subscription.
 (3) Offer For Sale (OFS) of shares by Promoters through Stock
Exchange Mechanism – This method allows the auctioning of
shares on the platform provided by the Stock Exchange, and is
the most popularly used by the Government since 2012.
(4) Strategic Sale – Sale of substantial portion of the Government
shareholding of a particular CPSE to the extent of 50% or even
higher as the competent authority may determine, apart from
the transfer of management control.
(5) Institutional Placement Programme (IPP) – Only selected
institutions are permitted to participate in the offering of
shares.
(6) CPSE Exchange Traded Fund (ETF) – This method involves the
disinvestment being made through the ETF route, which
permits the simultaneous sale of the Indian Government's
stake in various CPSEs spread over a diverse range of sectors,
through a single offering. It also provides a mechanism for the
Government to monetise its shareholding in those CPSEs
which form part of the ETF basket.16
3.2. Approaches to disinvestment

The objective of disinvestment ascertained and determined by the

Government, can be achieved in various ways and methods, depending
on the extent of ownership which the Government desires to possess in
the concerned CPSE. Amongst these approaches, some prominent ones
are as follows:

(1) Minority Stake Sale –

It is defined as the sale of less than 50% of a company's equity
capital, which is not a controlling stake in the enterprise. This
can be done in any case, wherein the Government wishes to
raise funds through private investment, without relinquishing
its control over the management and operation of the
concerned enterprise.17 To ensure this, only less than 49% of
the shareholding of the CPSE with the Government is
auctioned to the private investors in usual cases.18
(2) Majority Stake Sale / Strategic Disinvestment –
This implies the sale of a substantial portion of the
Government shareholding in a CPSE, of upto 50% or higher,
 apart from the transfer of management control to the private
investor.19 The idea for such a sale comes from the
government's "strategy" for a comprehensive approach, for
the efficient management of the Government investment in
CPSEs.20 Also, the need for this option arose from the fact
that the government recognised the need to give up its notion
of control and embrace the much more crucial idea of
efficiency, if the public sector is to be expected to cut back on
its losses and re-join the pathway to growth.21
(3) Slump Sale –
A slump sale of an undertaking will entail transfer of the
undertaking as a going concern for a lump-sum consideration,
by the seller company to the purchaser company. It basically
refers to the transfer of one or more undertakings as a result
of the sale, for a lump sum consideration, without values being
assigned to the individual assets and liabilities.22
The sale may be carried out by the execution of a contract
between the parties, or by the Court procedures under law.
Since the court process is similar to the court-driven
sanctioning of a scheme of demerger in the High Court, the
contractual arrangement of a slump sale is more popular. The
parties usually enter into a Business Transfer Agreement
(BTA), specifying the terms and conditions with respect to a
wide range of aspects, including the list of assets, the
consideration specified, the "closing date" etc.23

4. SLUMP SALE – LEGAL ASPECT

4.1. The Income Tax Act, 1961 and allied rules

The Income Tax Act before 2021 defined slump sale as "the transfer of
one or more undertakings as a result of the sale for a lump sum
consideration without values being assigned to the individual assets
and liabilities in such sales", the definition being inserted in 1999.24
Further, for the ease of interpretation, it is also stated in the proviso to
the section that "the determination of the value of an asset or liability
for the sole purpose of payment of stamp duty, registration fees or
other similar taxes or fees shall not be regarded as assignment of
values to individual assets or liabilities".25 Also, to eliminate the
ambiguity of the taxability of a slump sale under the Income Tax Act,
1961, the 1999 amendment to the Income Tax Act also inserted Section
50B to bring the concept within the ambit of taxability. The provision
states that,

"Any profits or gains arising from the slump sale effected in the
previous year shall be chargeable to income-tax as capital gains arising
from the transfer of long-term capital assets and shall be deemed to be
the income of the previous year in which the transfer took place:

Provided that any profits or gains arising from the transfer under the
slump sale of any capital asset being one or more undertakings owned
and held by an assessee for not more than thirty-six months
immediately preceding the date of its transfer shall be deemed to be
the capital gains arising from the transfer of short-term capital
assets."26

In simpler words, the Act stipulates that any profits or gains arising out
of a slump sale, calculated as the sale consideration minus the net
worth of the undertaking, are chargeable to tax as capital gains, while
the nature of the gains would be determined by the period of holding of
the undertaking. The threshold for the capital gains turning into long-
term is 36 months, as stipulated by the 1999 amendment.27Also, "net
worth" has been defined in the Act to refer to "the aggregate value of
total assets of the undertaking or division as reduced by the value of
liabilities of such undertaking or division as appearing in its books of
account".28

In this regard, the provision also mandates the production of a report

for verification of the "net worth" of the undertaking or its part as has
been calculated. The provision states that, "Every assessee, in the case
of slump sale, shall furnish in the prescribed form along with the return
of income, a report of an accountant as defined in the Explanation
below sub-section (2) of section 288, indicating the computation of the
net worth of the undertaking or division, as the case may be, and
certifying that the net worth of the undertaking or division, as the case
may be, has been correctly arrived at in accordance with the provisions
of this section."29
The Finance Act of 2021, however, broadened the definition of a slump
sale under the Income-tax Act, eliminating its earlier limitation of
transfers of business undertaking only through sale transactions, and
now covering all transfers of business undertakings within its ambit.30
Additionally, section 50B of the Income Tax Act has been replaced with
new clauses pertaining to the computation of the capital gains arising
out of a slump sale, incorporating a specific stipulation as to the
determination of the full value of consideration for calculating such
capital gains31. The inserted provision stipulates that the full value of
the consideration received or accrued for the transfer of any concerned
capital asset under the slump sale would be considered as the Fair
Market Value (FMV) of the concerned asset.32 Additionally, the
provision now mandates the aggregate value of the goodwill of an
enterprise not purchased by the assessee from the previous owner as
nil or zero.33

In this regard, the Income-tax Rules of 1962 also underwent an

amendment in 2021, inserting Rule 11UAE pertaining to the
"Computation of Fair Market Value of Capital Assets for the purposes of
Section 50B of the Income-tax Act". The new provision provides for two
different methods of computing the capital gains arising out of a slump
sale, named as FMV1 and FMV2, with the higher amount of the two
being the FMV considered for the capital assets in the slump sale.34
The provision further postulates that this computation of FMV of the
capital assets involved would be conducted on the date of the slump
sale taking place, which is also to be considered as the "valuation date"
for all relevant purposes.35

4.2. The Companies Act, 2013 and allied rules

Although the Companies Act, 2013, does not use the term "slump sale",
it mandates the requirement of a special resolution in the cases where
the Board of Directors wishes, "to sell, lease or otherwise dispose of the
whole or substantially the whole of the undertaking of the company, or
where the company owns more than one undertaking, of the whole or
substantially the whole of any of such undertakings".36Also, the
resolution may stipulate "such conditions as may be specified in such
resolution, including conditions regarding the use, disposal or
investment of the sale proceeds which may result from the
transactions".37

In this regard, the relevant provision of the Companies (Management

and Administration) Rules, 2014 stipulates that in accordance with
Section 110(1)(a) of the Companies Act, the cases involving "sale of the
whole or substantially the whole of an undertaking of a company" as
per Section 180(1)(a) of the Companies Act "shall be transacted only by
means of voting through a postal ballot".38 This is because the sale of
undertakings is considered highly crucial, and the main aim is to
encourage wider participation of the members in such matters.39

4.3. Judicial Perspective

The judicial literature with respect to slump sale has been highly
volatile in terms of the interpretation regarding the classification of
slump sale. Prior to the incorporation of the slump sale provisions
within the Income-tax Act in 1999, the Supreme Court had
inadvertently created a situation of ambiguity with respect to
ascertaining the cost of acquisition of a business being transferred as a
going concern. The Court stipulated that both the charging provisions
as well as the computation methodology form an integrated code
together, and no capital gains tax liability arises when the cost of
acquisition cannot be ascertained in clear terms.40

In the Artex Manufacturing case41, the Supreme Court observed that

the sale of the business as a going concern for a lump sum
consideration was to be considered as an itemised sale, on the ground
that the slump price was determined by the valuer based on the values
and prices of the individual itemised assets. The same rationale was
expanded by the Bombay High Court in a different case, wherein the
Court observed that a mere reference made to the value of the net
current asset within the slump sale agreement could not be concluded
to have constituted a sale of itemised assets.42 However, the Court in a
later case held that the sale of such business would be regarded as a
slump sale as in this case, it could not be shown that the slump price
was attributable to any individual asset as such.43

Also, it was observed by the Supreme Court that the gains arising from
a slump sale transaction could not be taxed under Section 41(2) of the
Income Tax Act, 1961, which deals with the profits chargeable to tax
under the head of 'Profits and Gains from Business or Profession'. This
was because in the case of a slump sale, there is an entire undertaking
which gets transferred, including depreciable as well as non-
depreciable assets, and the slump price could not only be attributed to
the depreciable ones, due to which it could not be taxed under Section
41(2).44

Moreover, the recent amendment to the definition of "slump sale"

under the Income-tax Act has rendered the opinion of the Bombay High
Court ineffective, in relation to slump exchanges being considered as
not satisfying the conditions of a "sale" and resultantly escaping the
ambit of the erstwhile definition.45 The new definition covers all the
transactions involving a transfer of a business enterprise, whether or
not they fall within a definition of a sale. It seems to fall more in line
with the approach taken by the Delhi High Court ruling, observing that
in cases of the transfer of business in exchange of a capital asset, the
consideration for the same is discharged monetarily in the form of
shares.46 The Supreme Court's definition of a non-monetary
consideration against the transfer of a business enterprise counting as
"exchange" and not "sale" is also rendered irrelevant by the newly
incorporated definition.47

5. SLUMP SALE – ANALYSIS AND OBSERVATIONS

5.1. Advantages and positive features

The transaction of slump sale, governed by the Income Tax Act, 1961
and the Companies Act, 2013, aims to confer mainly three basic
advantages:

(1) Firstly, to enable the improvement and better functioning as

well as operation of weaker businesses.
(2) Secondly, to eliminate negative synergies surrounding the
enterprise, and facilitate strategic investment.
(3) Thirdly, to seek taxation as well as regulatory benefits.48
Slump sale seems to be an attractive option for a business entity which
is desirous of transferring/selling an undertaking, given the
complexities involved in the determination of the costs and taxes in
cases of itemised sale as opposed to slump sale. Also, it is easier as well
as prudent on the part of the parties to negotiate and commercially
agree on the cost burden incurred by each at the very outset.49 Yet
another plus point in this context is the lack of approval by the National
Company Law Tribunal (NCLT), being replaced by the special
resolution of the members, which has led to an approach towards
speedier procedures without unreasonable delays.

5.2. Limitations with respect to legality

Irrespective of the advantages and positive aspects of the option of

slump sale, there are some issues with the concept in terms of its legal
aspects, which act as hurdles in opting for this option as an alternative
to other modes of disinvestment. These issues include the following:

(1) Stamp Duty aspect –

Under the Indian Stamp Act, 1899, and as amended by
different states, stamp duty is payable only for transactions
pertaining to the transfer of immovable property. However,
any plant and machinery embedded into the ground would
have to be treated as immovable property, even if it is movable
and is not covered within the ambit of Stamp Duty law.50
In this regard, the Supreme Court of India has observed in
various cases that while land and buildings are considered as
immovable property, such installed and attached machinery
would become immovable property, depending on the degree
and permanence of the attachment, as well as the purpose for
installing and attaching the machinery.51 For instance, a
fertiliser plant was treated as immovable property on sale
through a slump sale, since it was always intended that the
plant would remain permanently affixed to the land and
building being transferred in the slump sale.52
(2) Indirect Taxes__ –
Under the earlier VAT and Sales Tax laws, slump sale was not
treated as taxable due to the fact that a slump sale involves
the transfer of a business as a "going concern", which cannot
be equated with the sale of movable goods which are
subjected to sales tax and VAT. In other words, a business or
undertaking could not be treated as "goods" under indirect tax
laws.53 This view has carried on over to the new GST regime
 as well, wherein there is no specific provision for the taxability
of the transfer of a business since it cannot be categorised as
a good or service per se.54 The same essence has been
extended to the transfer of shares as securities, more so since
the sale of securities has been expressly excluded from the
definition of goods and services under GST law.55
(3) Higher Transaction Costs –
Apart from the numerous new additions introduced to the
slump sale provisions under the Income-tax Act, the newly
imposed necessity of fair valuation reports being submitted for
slump sale transactions for the proper determination of
deemed sale consideration will result in increased transaction
and compliance costs, particularly on enterprises relying
heavily on immovable assets or securities for their survival.
While on one hand, the redevelopment of the slump sale
taxation framework in the Indian corporate sphere would
enable the Government to have an iron hand on ambiguous
and tax-evasive restructuring methods being categorised as
slump sale, the same provisions would act as a deterrent for
companies to adopt other methods such as demerger simply to
escape high tax incidence for slump sales.56
6. CONCLUSION

One of the major reasons of slump sale being undertaken in India, is

how it helps the business in improving and correcting its poor
performance in the market, and also how it helps to rearrange the
financial statements of the enterprise concerned. The aspects of
growth, progress and huge profits are the key force driving behind the
need and utmost concern of any business to grow and expand, through
organic as well as inorganic ways.57

Thus, keeping in mind the above advantages and disadvantages of

slump sale in terms of its varied aspects and complexities, slump sale is
not a preferred option when it comes to disinvestment of a particular
enterprise, since it does not expressly deal with the issue of control
over the management and operation of such an enterprise. Also, it must
be understood that due to the ambiguity of the law on the subject, as
well as no statutory backing in company law per se, it becomes a very
risky process requiring much more compliances than other modes of
disinvestment.

It must be noted therefore that the other modes of disinvestment may

be preferred over slump sale, as has been done by the Indian
government in recent times, with the revival of the strategic sale
method of disinvestment. However, the importance of the option of
slump sale being a viable method of disinvestment must not be
overlooked, and it can be treated as a valid but tedious process for the
same, since it involves some extra procedural requirements to
compensate for the fact that the approval from the NCLT is not
required anymore.

■■

1. Disinvestment, INVESTOPEDIA,
https://www.investopedia.com/terms/d/disinvestment.asp.
2. Objectives and Importance of Disinvestment, BSEPSU.COM,
http://www.bsepsu.com/importance-disinvestment.asp.
3. S. Murlidharan, Disinvestment vs privatisation, THE HINDU
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stories/2003022400401100.htm.
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2017, 03:25 PM),
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5. INVESTOPEDIA, supra note 1.
6. Kaushik Datta, India's disinvestment conundrum, FORTUNE
INDIA (Jan. 31, 2018), https://www.fortuneindia.com/ macro/
indias- disinvestment-conundrum/101504.
7. Dr. Aruna Kaushik, Assessment of Current Methods of
Disinvestment in India, 7INT'L J. BUS. & MGMT.
INVENTION (IJBMI) 1 (2018).
8. Anuj Jain, Disinvestment policy of Indian Government,
LINKEDIN (Apr. 19, 2015), https://www.linkedin.com/pulse
/disinvestment- policy-indian-government-anuj-jain.
9. Ibid.
10. Murlidhar Ananda Lokhande, Disinvestment Policy in India:
An Appraisal, 20 THIRD CONCEPT – AN INTERNATIONAL
JOURNAL OF IDEAS 23 (2006).
11. Disinvestments – A Historical Perspective, BSEPSU.COM,
http://www.bsepsu.com/historical-disinvestment.asp.
12. Anjana Mani, The Disinvestment Programme in India –
Impact on Efficiency and Performance of Disinvested
Government Controlled Enterprises (1991 – 2010), 2
INTERNATIONAL JOURNAL OF BUSINESS, M.P. BIRLA
INSTITUTE OF MANAGEMENT, BENGALURU 32(2017).
13. Shaji Vikraman, In fact: The gradual evolution of India's
disinvestment policy, THE INDIAN EXPRESS (Apr. 05, 2017,
06:08 PM), https://indianexpress.com/article/ explained/in-
fact-the-gradual-evolution-of-indias-disinvestment-policy/.
14. Ibid.
15. Dr. Aruna Kaushik, supra note 7, at 3.
16. Methods of disinvestment of CPSEs, DEPARTMENT OF
INVESTMENT AND PUBLIC ASSET MANAGEMENT
(DIPAM), https://dipam.gov.in/ methods-disinvestment-cpses.
17. Minority Stake, FINANCIAL TIMES LEXICON,
http://lexicon.ft.com/Term?term=minority-stake.
18. Pankaj Yadav, Disinvestment – What does it mean?,
SYMBIOSIS INSTITUTE OF MANAGEMENT STUDIES
(SIMS), https://www.sims.edu/ assets/infinity-images
/newsletter_pdf/Aug%202017.pdf.
19. Background Material for Economic Editor's Conference,
DIPAM,
http://pibphoto.nic.in/documents/rlink/2016/nov/p2016111007.pdf.
20. Tojo Jose, What is Strategic sale? What is the role of NITI
Ayog and DIPAM in strategic sale, INDIANECONOMY.NET
(Jun. 29, 2016),
https://www.indianeconomy.net/splclassroom/what-is-
strategic-sale-what-is-the-role-of-niti-ayog-and-dipam-in-
strategic-sale/.
21. Priyanka Venkat, Strategic divestment of PSUs: The need of
the hour?, QRIUS (Mar. 01, 2018),
https://qrius.com/strategic-divestment-psus-need-hour/.
22. Slump Sale, CA CLUB (Mar. 31, 2016), at
https://caclub.in/slump-sale-meaning-tax-treatment/.
23. Rohit Subramanian, Stamp Duty issues in slump sale
transactions, LAKSHMIKUMARAN & SRIDHARAN
CORPORATE ARTICLES (Feb. 06, 2017) at
 https://www.lakshmisri.com/News-and-Publications/
Publications/Articles/Corporate/stamp-duty-issues-in-slump-
sale-transactions.
24. The Income-tax Act (ITA), 1961, §2(42C), No. 43, Acts of
Parliament, 1961 (India).
25. Ibid.
26. Id, §50B(1).
27. S. Ramanujam, The slump sale conundrum, THE HINDU
BUSINESS LINE (Oct. 21, 2012), at
https://www.thehindubusinessline.com/ news/ education/
The-slump-sale-conundrum/article20517695.ece.
28. ITA, supra note 24, § 50B, Explanation 1.
29. Id, § 50B(3).
30. The Finance Act, 2021, § 3(v), No. 13, Acts of Parliament,
2021 (India).
31. Varsha Bhattacharya and Afaan Arshad, CBDT Prescribes
Validation Rules For Slump Sales: Plugging The Gap, NEWS
DETAILS – NISHITH DESAI ASSOCIATES(Jun. 15, 2021),
https://www.nishithdesai.com/ information/news-
storage/news-details/article/cbdt-prescribes-valuation-rules-
for-slump-sales-plugging-the-gap.html.
32. ITA, supra note 24, §50B(2)(ii).
33. ITA, supra note 24, § 50B, Explanation 2, clause (aa).
34. The Income-tax Rules, 1962, Rule11UAE(1) (India).
35. Id., Rule11UAE(4).
36. The Companies Act, 2013, § 180(1)(a), No. 18, Acts of
Parliament, 2013 (India).
37. Id, § 180(4).
38. The Companies (Management and Administration) Rules,
2014, Rule 22(16)(i) (India).
39. Umakanth Varottil, Sale of an "Undertaking" in Company
Law, INDIA CORP LAW(Nov. 19, 2015), at
https://indiacorplaw.in/2015/11/ sale-of-undertaking-in-
company-law.html.
40. CIT v. BC Srinivasa Shetty, [1981] 5 Taxman 1/128 ITR 294
(SC); PNB Finance Ltd. v. CIT, [2008] 175 Taxman 242/307
ITR 75 (SC).
41. CIT v. Artex Manufacturing Co., [1997] 93 Taxman 357/227
ITR 260 (SC).
42. Premier Automobiles Ltd. v. ITO, [2003] 129 Taxman
289/264 ITR 193 (Bom).
43. CIT v. Electric Control Gear Manufacturing Co., [1997] 93
 Taxman 384/227 ITR 278 (SC).
44. PNB Finance, supra note 41.
45. CIT v. Bharat Bijlee Ltd., [2014] 46 taxmann.com 257/224
Taxman 282/365 ITR 258 (Bom).
46. SREI Infrastructure Finance Ltd. v. Income Tax Settlement
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