Conversion of partnership firm into company | Capital asset Revaluation | Enhanced amount treated as loan | Taxation

K.T.C. Automobiles Vs DCIT (Kerala High Court)

By crediting the enhanced value of the land, which belonged to the firm, to the current account of the partners of the firm and by treating it as loan from the partners in the accounts of the company, there was violation of the provisions contained in clauses (a) and (c) of the proviso to Section 47(xiii) of the Act. Therefore, the aforesaid transaction amounts to transfer of a capital asset within the purview of Section 45 of the Act and the profits or gains obtained by the tra

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