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2014 (8) TMI 1056 - HC - Income TaxConversion of partnership firm into public limited company - Applicability of provisions of Section 45(1) or Section 45(4) of the Income Tax Act - - transfer of movable and immovable assets of the firm to company - Held that:- In the instant case, the partnership firm, which came into existence on 31.08.1995 having seven partners. Later, it became a joint stock company within the meaning of Section 566 of the Companies Act and the same was registered on 08.04.1996. The share holding of the erstwhile firm remained with the same seven persons who became Directors. Thus, There was no transfer of assets of the firm to the company. It was only that the business was taken over by the company. It cannot be valued at market price, it had the value at a cost price. In view of above, no condition of Section 45 of the Act is applicable in the instant case, hence, no capital gain tax attracted in the instant case. Therefore, we find no reason to interfere with the impugned order passed by the Tribunal. - Decided in favour of assessee.
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