Provisions of Sec 47(xiv)are reproduced below :- "Where a sole proprietary concern is succeeded by a company in the business carried on by it as a result of which the sole proprietary concern sells or otherwise transfers any capital asset or intangible asset to the company"
My query is whether Succession implies New Company or takeover by an existing company will also be covered?
04 January 2012
Section 47(xiv) only requires that the business shall be taken over by a company. The wordings of the section are clear and there is no doubt regarding the existence of the company.
It can be an existing company or a new company.
The section does not use the word 'new' anywhere.
So even if the business is taken over by an existing company, exemption shall be available.
CAclubindia
