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2023 (10) TMI 1052 - AT - Income TaxShort term capital gain on conversion of partnership firm into a Private Limited Company - HELD THAT:- AAR ruled in favour of the assessee that no liability towards the capital gain was attracted on the assessee acquiring the full share capital of the company. This was done through its order dated 12-03-2010. Revenue’s writ petition before the Hon’ble Bombay High Court [2016 (12) TMI 360 - BOMBAY HIGH COURT], thereby, affirming the view point of the AAR. The effect of the affirmation of the ruling by the Hon’ble High Court is that no liability is attracted towards the capital gain - whether short term or long term. Resultantly, the depreciation allowed has to be withdrawn. In view of this, Ground No.1 of the assesses’ appeal against the disallowance of depreciation on the transfer value of the asset is dismissed and Ground No.2 against the gain on transfer of technical know-how being treated as short term capital gain to the extent of Rs. 2.00 crore, as against the without prejudice claim of the assessee of the same being long term capital gain, is also dismissed as having become infructuous. The assessee’s additional ground about no liability towards capital gain is allowed.
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