Addition being the amounts credited in the capital reserve - ...

Conversion of Partnership to Company: Rs. 2117.45 Crores Investment by PEL, No Tax Avoidance, Sections 56(1) & 56(2)(viia.

November 9, 2020

Case Laws     Income Tax     AT

Addition being the amounts credited in the capital reserve - income u/s.56 - conversion of partnership firm into company - pursuant to assessee firm receiving capital contribution from PEL to the tune of ₹ 2117.45 Crores, PEL had become 75% partner in the assessee firm. Hence, for all practical purposes, the assessee firm belongs to Piramal group and not to Shriram group as understood by the ld. AO in her assessment order. - there cannot be any allegation that can be levelled on the assessee in the instant case that the capital reserve was created as part of a scheme to avoid tax liability and is part of any colourable device. - there cannot be any taxability either u/s.56(1) or u/s.56(2)(viia) - AT

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