"Profit on slump sale is a Capital Receipt." Explain and support the statement through decided Case Laws.

A slump sale means a sale that has a lump sum price as consideration without attributing values to the individual assets and liabilities disposed. Normally, sale of capital assets results in capital receipt and any profit derived is liable for capital gains in certain case. The Supreme Court in the case of CIT vs. West Cast Chemicals and Industries Ltd. held that a slump sale price paid is an appreciation of capital but not arising out of trading. In the case of CIT vs. Mungeeram Bangar & others it was held that mere fact that in the schedule price of land was stated does not lead to conclusion that part of the slump price is attributable to the land sold. Gujarat High Court also recognized the sale of undertaking as a whole as a going concern creates liability of Capital Gain Tax { Sarabhai M. Chemicals Pvt. Ltd. (126 ITRI) }.