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Llp (Others)

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This query is : Resolved

Author : Anonymous

( Author )
27 September 2013

can company having turnover more than 60 lacs converted in LLP.

Exactly what is capital gain which is taxable on conversion of company into LLP if turnover is more than 60 lacs in previous 3 years.


Nikhil Kaushik

( Expert )
29 September 2013

Yes you can convert.

The taxability is not based on the turnover of the company.

Kindly refer to clause (xiiib) under Section 47 of the Income Tax Act, 1961


Author : Anonymous

( Author )
06 October 2013

if co having more than 60 lacs turnover is converted to LLP then capital gain is not exempt
but if assets are transfered at book value how capital will be calculated.


Nikhil Kaushik

( Expert )
06 October 2013

Well if the turnover is above 60 lakhs then normal capital gains provision apply.

However, my view that no taxability may arise is based on judgment in the case of

CIT v. Texspin Engg. & Mfg. Works [2003] 263 ITR 345 / 129 Taxman 1 (Bom)

Unity care & Health Services – Banglore ITAT 103 ITD – 53

Umicore Finance Luxembourg, In re – Advance ruling – 189 Taxman 250

Will Pack Packaging – Ahmedabad ITAT – 78 TTJ (Ahd) – 448

Further you can refer to

Vali Pattabhirama Rao vs. Shri Ramanuja Ginning & Rice Factory (P) Ltd.
(1986) 60 Company Cases 568 (AP) where it was held that had held that there is no transfer under General Law and no separate conveyance necessary. Section 5 of Transfer of Property Act not applicable.


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