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2016 (3) TMI 235 - ITAT CHANDIGARHCapital gain - conversion of the partnership firm into company - whether transfer of factory land and building, etc., and holding that the conditions stipulated in sub-section (xiii)(c) and (d) of section 47 were not fulfilled? - Held that:- The aggregate of the shareholding in the company of the partners of the firm was not found less than 50 per cent. of the total voting power in the company and their shareholding continues to be as such for a period of five years from the date of the succession. The learned Commissioner of Income-tax (Appeals), on examination of the record specifically found that aggregate of the shareholding of the companies by the partners is not less than 50 per cent. of the total voting powers because though the shares of Shri Vijay Sood were transferred, Shri Rajat Sood and erstwhile partners' share in the company were more than 50 per cent. and these were retained as such for a period of more than 5 years. Therefore, the same would not disqualify the assessee from exemption under section 47(xiii) of the Act. This finding of fact recorded by the learned Commissioner of Income- tax (Appeals) have not been rebutted through any evidence or material on record. Further, the findings of fact recorded by the learned Commissioner of Income-tax (Appeals) under section 47(xiii) have not been challenged by the Revenue Department in the present appeal. It may be noted here again that since on the registered agreements dated April 1, 1999 and December 30, 1999, the business of the assessee-firm was taken over by the limited company which have been signed by Shri Vijay Sood as well on behalf of the firm, therefore, story made up by Shri Vijay Sood later on and accepted by the Assessing Officer, will demolish the entire case of the Revenue. In view of the above discussion, the learned Commissioner of Income- tax (Appeals) has correctly held that no consideration, what-so-ever has gone to Shri Vijay Sood, partner of the assessee-firm on the basis of the alleged agreement dated December 7, 1998. The learned Commissioner of Income-tax (Appeals) also correctly held that the conditions laid down under section 47(xiii) of the Act have been fulfilled in this case. Therefore, no capital gain is chargeable under the provisions of section 45(4) of the Act. Thus, there is no merit in the Departmental's appeal, the same is accordingly dismissed. - Decided against revenue
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