The case involves an application filed by the liquidator of LML Limited under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, seeking directions on whether capital gains tax should be paid from the proceeds of asset sales of the corporate debtor and if it should be included in liquidation costs or distributed as per the waterfall mechanism under Section 53 of the IBC. The applicant has already distributed a majority of the realized amount and needs to distribute the remaining amounts according to the waterfall mechanism. The liquidator is faced with the issue of whether capital gains tax would be attracted on sales of such assets as part of the liquidation estate and included as liquidation costs.
LML Limited is undergoing liquidation. The liquidator has filed an application under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, seeking directions regarding the treatment of capital gains tax arising from the sale of the corporate debtor's assets. A sum of Rs. 113,88,40,170/- has been realized from various auctions. The liquidator has already distributed a majority of the realized amount. The liquidator is faced with the issue of whether capital gains tax would be attracted on sales of such assets as part of the liquidation estate and included as liquidation costs. The counsel for the liquidator referred to Section 52 of the Code, which gives secured creditors the option to relinquish their security interest or realize it. The Income Tax Department
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The case involves an application filed by the liquidator of LML Limited under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, seeking directions on whether capital gains tax should be paid from the proceeds of asset sales of the corporate debtor and if it should be included in liquidation costs or distributed as per the waterfall mechanism under Section 53 of the IBC. The applicant has already distributed a majority of the realized amount and needs to distribute the remaining amounts according to the waterfall mechanism. The liquidator is faced with the issue of whether capital gains tax would be attracted on sales of such assets as part of the liquidation estate and included as liquidation costs.
LML Limited is undergoing liquidation. The liquidator has filed an application under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, seeking directions regarding the treatment of capital gains tax arising from the sale of the corporate debtor's assets. A sum of Rs. 113,88,40,170/- has been realized from various auctions. The liquidator has already distributed a majority of the realized amount. The liquidator is faced with the issue of whether capital gains tax would be attracted on sales of such assets as part of the liquidation estate and included as liquidation costs. The counsel for the liquidator referred to Section 52 of the Code, which gives secured creditors the option to relinquish their security interest or realize it. The Income Tax Department
…Filing of C…
Filing of CA N…