January 27, 2023
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No capital gain to be computed on the transfer of assets on the ‘book value’ in the case of conversion of company into LLP – ITAT Mumbai

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In the recent judgement by ITAT Mumbai in the Case of M/s Celerity Power LLP wherein  it was held that the on the conversion of the company into the assessee LLP no  transfer‘ of capital assets was involved. It was further observed that though the ―Capital gains‖, if
any, involved in the transfer of the capital assets on conversion of the private limited company to the assessee LLP, de hors applicability of Sec.
47A(4) to the facts of the case, would not be liable to be assessed in the hands of the assessee LLP as per Sec. 45 r.w Sec. 5 of the Act, however, the same would be subject to the liability of the assessee LLP (as a successor entity) under Sec. 170 of the Act.

The Hon’ble ITAT Mumbai had discussed the definition and meaning of “transfer” as per the act at length and the applicability of provisions of capital gain on transfer of assets in detail.

To download complete order,Celerity Power ( ITAT Mumbai)

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