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2016 (2) TMI 348 - AT - Income TaxScope of ‘transfer’ u/s 47(xiv) - whether the assessee’s transaction of converting his proprietary business into a private limited company is outside the scope of ‘transfer’ as provided under Section 47(xiv) of the Act and therefore not liable to be taxed under the head long term capital gains? - Held that:- CIT (A) has made a categorical finding in his order that the entire transaction is nothing but the conversion of assessee’s proprietorship concern as a going concern into a private limited company wherein the assessee is holding 51% of share capital with voting power immediately after conversion. The entire assets and liabilities of the assessee’s proprietorship concern are absorbed by the resultant private limited company. The assessee has also complied with the provisions of section 47(xiv) of the Act in all respects. Considering these facts which could not be controverted by the Revenue we are of the view that the entire transaction falls outside the ambit of Section-45 of the Act. Further, provisions of section 50B of the Act will not be applicable in the present case before us because this transaction is not slump sale as envisaged under the provisions of the Act. In these circumstances, we fully agree with the decision of the Ld. CIT (A) and accordingly, uphold his order. - Decided against revenue
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