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2014 (8) TMI 209 - HC - Income TaxEntitlement for deduction u/s 80IB - Conversion of proprietorship into partnership firm -Industrial undertaking formed by transfer of already existing proprietorship business and assets to the partnership firm – Conversion of firm into partnership firm - Held that:- The undertaking was already in existence and was not formed by splitting up or by reconstruction of the business - on the conversion of the proprietorship firm into a partnership firm there was no transfer of plant and machinery to the new firm - there was only transfer of the industrial undertaking as a whole along with assets and liabilities - the two conditions provided u/s 80-IB(2)(i) of the Act, which disqualifies the deduction are not present – thus, the benefit u/s 80-IB of the Act is available to the partnership firm – relying upon Commissioner of Income Tax Vs. Bullet International [2012 (5) TMI 187 - ALLAHABAD HIGH COURT] - the exemption granted to a proprietorship concern, which converted from a proprietorship into a partnership concern was still entitled for exemption u/s 10A of the Act – thus, the Tribunal was justified in holding that upon conversion of the proprietorship concern to a partnership concern there was no transfer of plant and machinery to the partnership firm, inasmuch as there was a transfer of the industrial undertaking as a whole along with its assets and liabilities – Decided against Revenue.
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