Amendment of section 49.
16. In section 49 of the Income-tax Act, in sub-section (1), in clause (iii), in sub-clause (e), for the words, brackets, figures and letter “clause (xiiib) of section 47”, the words, brackets, figures and letter “clause (xiii) or clause (xiiib) or clause (xiv) of section 47” shall be substituted and shall be deemed to have been substituted with effect from the 1st day of April, 1999.
Notes on Clauses:
Clause 16 of the Bill seeks to amend section 49 of the Income-tax Act relating to cost with reference to certain modes of acquisition.
The existing provisions contained in the aforesaid section 49 provide that, in certain circumstances the cost of acquisition of the assets shall be deemed to be the cost for which the previous owner of the assets acquired it.
Clause (xiii) of section 47, inter alia, provides for transfer of any capital asset or intangible asset by a firm to company as a result of succession of the firm by a company and clause (xiv) of section 47 provides, inter alia, for transfer of any capital asset or intangible asset by a sole proprietary concern to a company as a result of succession by a sole proprietary concern to a company.
It is proposed to amend sub-clause (e) of clause (iii) of sub-section (1) of the aforesaid section so as to bring the transfers referred to in clause (xiii) and clause (xiv) of section 47 within the scope of section 49 which deals with cost with reference to certain modes of acquisition.
This amendment will take effect retrospectively from 1st April, 1999 and will, accordingly, apply in relation to the assessment year 1999-2000 and subsequent assessment years.
