capital gains, pcc, sec 46

46 is applicable if following conditions are satisfied :

1. Assets are distributed by a company

2.  Assets are distributed at the time of Liquidation

3. Assets are distributed to shareholders

Such distribution is not taxable in ahnds of Company since not considered TRANSFER

Howerever in case of shareholder as per sec 46(2), The market value of assets received by shareholder on liquidation minus Amt of deemed dividend u/s 2(22)(c) shall be treated as sale consideration...... 

We are reducing deemed divinded to compute sale considrn coz company has already paid tax on de same....