Capital gain on sale of assets acquired in a slump sale.

CA Deepak Gupta (In Practice) (81 Points)

06 September 2011  

Dear All,

A Company acquired certain assets (mainly old plant and machinery) along with a long term lease of land by paying a single consideration. Thereafter the company dismantled and sold the old plant and machinery and there by the block ceased to exist. Meanwhile the company acquired few items of small machinery which are of entirely different nature.

Is the Company liable to pay tax due to Capital Gain?

If yes, then what will be the cost of acquisition of this old plant and machinery purchased along with the lease of land under a single consideration.


Thanks & Regards.