Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2014 (12) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (12) TMI 1199 - HC - Income TaxCapital gain - interpretation of Sec. 45 - revaluation of the assets of the assessee firm and subsequent conversion of the firm into Limited Company under Chapter IX of the Companies Act - whether no transfer involved when the assessee gets itself registered under Para IX of the Companies Act, 1957 ? - Held that:- The same question came up for consideration before the Andhra Pradesh High Court in the case of Commissioner of Income Tax vs. United Fish Nets [2014 (10) TMI 574 - ANDHRA PRADESH HIGH COURT] wherein held that the distribution must result in some tangible act of the physical transfer of properties or the intangible act of conferring exclusive rights vis.a.vis an item of property on the erstwhile shareholder. Unless these or other legal correlatives take place, it cannot be inferred that there was any distribution of assets. In the instant case, the shares of the respective shareholders in the respondent-company were defined under the partnership deed. The only change that has taken place on the respondent being transformed into a company was that the shares of the partners were reflected in the form of share certificates. Beyond that, there was no physical distribution of assets in the form of dividing them into parts, or allocation of the same to the respective partners or even distributing the monetary value thereof following the decision in Commissioner of Income-Tax Versus Texspin Engineering And Manufacturing Works [2003 (3) TMI 56 - BOMBAY High Court] . Income Tax Appellate Tribunal is right in law and on facts of the case in holding that the assessee is not liable to any capital gain tax either u/s. 45(1) or 45(4) of the IT Act - Decided in favour of assessee
|