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2009 (7) TMI 149 - AAR - Income TaxMaintainability of application for advance ruling – Question raised in application was that “Whether the conversion of partnership firm as a private limited company under Part IX of the Companies Act, 1956, , will be regarded as transfer within the meaning of section 2(47) and other relevant provisions of the Income-tax Act, 1961 ? If so, will it give rise to capital gains liable to income-tax consequent upon the transaction entered into by the applicant of buying the shares of the said company in, and making it its wholly owned subsidiary by reason of the provision in proviso (d) to section 47(xiii)? - It seems to us that the application is maintainable having regard to the wider language of sub-clause (i) of section 245N (a) in contrast with the language employed in sub-clause (ii). There is no specific requirement in sub-c1ause (i) that determination should relate to the tax liability of a non resident. Going by the averments of the applicant, it is clear that the capital gains tax issue arising in the case of the acquired Indian company has a direct and substantial impact on the applicant’s business in view of the stipulations in the share purchase agreement. Sub-clause (i) has to be construed in a wider sense and moreover a remedial provision shall be liberally construed. We are, therefore, of the view that the question raised by the applicant falls within the definition of “advance ruling” under section 245N (a) of the Act.
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