Blue Springs Ltd. incorporated a new company namely Defence Springs Ltd. and transferred its defence component division to it on slump sale basis for a lump sum consideration of ₹255 lakh. The assets and liabilities of t

In case of slump sale, various figures can be calculated keeping in mind the provisions of Section 50B of the Income Tax Act, 1961. The desired values are as under: (i) Aggregate value of total assets: Aggregate value of total assets = Depreciated value of depreciable assets + Book Value of other assets Depreciated value of fixed assets = Gross value of fixed assets - Accumulated depreciation Depreciated value of fixed assets = ₹410 lakh - ₹240 lakh = ₹170 lakh Book value of other assets = Current assets (other than liquid assets) + Liquid assets Book value of other assets = ₹80 lakh + ₹30 lakh = ₹110 lakh Aggregate value of total assets = ₹170 lakh + ₹110 lakh = ₹280 lakh Thus, the aggregate value of total assets is ₹280,00,000/- . (ii) Book value of net assets: Book Value of Net Assets = Net Fixed Assets (Depreciated Value) + Current Assets (Book Value) Net Fixed Assets (Depreciated Value) = ₹170 lakh Current Assets (Book Value) = ₹80 lakh (Current assets other than liquid assets) + ₹30 lakh (Liquid assets) = ₹110 lakh Book Value of Net Assets = ₹170 lakh + ₹110 lakh = ₹280 lakh Thus, the book value of net assets is ₹280,00,000/- . Note: In the context of slump sale for Section 50B, 'net worth' is calculated by reducing liabilities from the aggregate value of assets. The term 'book value of net assets' as used in the question might be interpreted similarly to 'net worth' for slump sale purposes, or simply as the sum of asset book values. However, for capital gains calculation under 50B, 'net worth' (assets minus liabilities) is the key. Assuming the question intends to ask for the net worth as per Section 50B for the purpose of capital gains calculation. (iii) Networth of the defence component division: Net Worth of the Defence Component Division = Aggregate value of Total Assets - Value of liabilities Aggregate value of Total Assets = ₹280 lakh (as calculated in (i)) Total Liabilities = Trade liabilities + Secured loans (including short-term loans) + Short-term loans Total Liabilities = ₹60 lakh + ₹80 lakh + ₹35 lakh = ₹175 lakh Net Worth of the Defence Component Division = ₹280 lakh - ₹175 lakh = ₹105 lakh Thus, the net worth of the defence component division is ₹105,00,000/- . (iv) Capital gains as per section 50B of the Income-tax Act, 1961: Capital Gains = Net Consideration - Net Worth of the Defence Component Division Net Consideration (Lump sum consideration) = ₹255 lakh Net Worth of the Defence Component Division = ₹105 lakh (as calculated in (iii)) Capital Gains = ₹255 lakh - ₹105 lakh = ₹150 lakh Thus, the capital gains as per Section 50B of the Income-tax Act, 1961, is ₹150,00,000/- .