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TMI Blog2014 (8) TMI 1056X X X X Extracts X X X X X X X X Extracts X X X X ..... was only that the business was taken over by the company. It cannot be valued at market price, it had the value at a cost price. In view of above, no condition of Section 45 of the Act is applicable in the instant case, hence, no capital gain tax attracted in the instant case. Therefore, we find no reason to interfere with the impugned order passed by the Tribunal. - Decided in favour of assessee. - Income Tax Appeal No. 289 of 2009 - - - Dated:- 6-8-2014 - Tarun Agarwala and Satish Chandra, JJ For the Appellant: A.N. Mahajan, B. Agrawal and Shambhoo Chopra Advs. For the Respondent: M. Manglik, Rahul Agarwal and Santosh Advs. JUDGEMENT Satish Chandra, J:- The present appeal is filed by the department agains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tners' firm were transferred to the company. The A.O. has levied the capital gain tax on the transfer of the assets and properties and made the addition accordingly. The same was upheld by the First Appellate Authority. However, the Tribunal has allowed the appeal filed by the assessee and deleted the addition. Being aggrieved, the Department has knocked the door of this Court. With this background, we heard both the parties at length and gone through the materials available on record. From the record, it appears that all the seven partners were converted as Directors in the Company. The partners got their shares in lieu of the revaluation of the reserve, for which the shares were issued. Each share was of value of ₹ 10/-. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the A.O. worked out the short-term capital gain and assessed it. Further, in the instant case, the partnership firm, which came into existence on 31.08.1995 having seven partners. Later, it became a joint stock company within the meaning of Section 566 of the Companies Act and the same was registered on 08.04.1996. The share holding of the erstwhile firm remained with the same seven persons who became Directors. Thus, There was no transfer of assets of the firm to the company. It was only that the business was taken over by the company. It cannot be valued at market price, it had the value at a cost price. In view of above, no condition of Section 45 of the Act is applicable in the instant case, hence, no capital gain tax attrac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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