"Profit on slump sale is a capital receipt." Explain and support the statement with decided case laws.

A slump sale means a sale has a lump sum price as consideration without attributing values to individual assets and liabilities disposed. Normally, sale of a capital asset results in capital receipt and any profit derived is liable for capital gains in certain cases. This is also true in the case of sale of an undertaking. Supreme Court in the case of CIT v. West Coast Chemicals and Industries Ltd. - 46 ITR 135 held that a slump price paid is an appreciation of capital but not a profit arising out of trading. Further in CIT v. Mugneeram Bangur and Co., - 57 ITR 299 it was held that the mere fact that in the schedule the price of land was stated does not lead to the conclusion that part of the slump price is attributable to the land. Gujrat High Court also recognised that sale of undertaking as a going concern creates liability of Capital Gains tax.