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Question ID : 40654

Transfer of capital asset to a company where a firm is succeeded by a company u/s 47(xiii) not treat

U/s 47(xiii) any transfer of capital asset by a firm to a company is not treated as Transfer provided, there are 4 condition. 1 All the assets and liability of the firm before the succession become the asset and liability of the company . 2. All the partners of the firm immediately before the succession become the shareholders of the company in same proportion in which their capital stood in the books of account of firm. 3. The partners of the firm do not receive any consideration/benefit other than by way of allotment of shares by the company 4. The aggregate of the shareholding in the company of the partners of the firm is not less than 50 % of the total voting power in the company, and their shareholding continues to be as such for a period of 5 years from the date of succession. My query is if we observe all the above stipulated terms and conditions can we now proceed with such transfer of a firm’s capital assets to a company.or we need to observe some other conditions as well to proceed. if any other conditions are also required kindly explain the same

Posted by pradeep kumar agrawal on May 21, 2020

Filed Under Capital Gains