Write notes on the following: Slump Sale agreement

Slump Sale agreement means transfer of entire business or part of business as a going concern. The entire transfer is done on a lumpsum consideration. The assets and liabilities are not evaluated individually. The concept of 'slump sale' was incorporated in the Income Tax Act, 1961 by the Finance Act, 1999 with the inclusion of Section 2(42C). In slump sale the value of consideration cannot be bifurcated and it can be bifurcated than it would not cease to fall under category of slump sale. For example, in a transaction of slump sale, some value is assigned to land for purpose of stamp duty than the transaction will continue to be treated as slump sale. The slump sale involves finding a buyer, making valuation for slump sale, making valuation for slump sale, making the term sheet and entering into an MOU with prospective buyer, discharge of lump sum consideration and execution of agreement. The executed agreement needs to be registered and stamp duty paid.