conversion of proprietorship firm to partnership firm

Accordingly, it is proposed to amend the provisions of section 49 of the Income-tax Act to provide that in case of conversion of sole proprietorship or firm into a company which is not regarded as a transfer, the cost of acquisition of asset in the hands of the company would be the same as that in the hand of the sole .

I don't get your point. plz provide your answer keeping in view current tax provision

Where transfer of an asset from one person to another is not regarded as a transfer under section 47, then, for the purpose of computation of capital gains, the cost of the asset in the hands of the successor under section 49 is taken as that of the predecessor. Certain transactions like transfer of assets by a sole proprietorship or a firm to a company on conversion are not regarded as transfer under the provisions of section 47(xiv) and section 47(xiii). While computing capital gains on subsequent sale of such assets by the company, there is no reference in the provisions of section 49 with regard to the cost to be taken for such assets.

Sir , the case here involved is for conversion of sole proprietorship to firm not company

@ Mr. CA PARUL KHATANA.,

As per my view.,

No way for transferred from Proprietor firm to Partnership Firm without any overtake or selling it's (proprietorship)all the Assets and Liabilities...

Better to transact with sale procedure...
(it's only my view. Wait on further replies from our Experts).

Sir here proprietor and partner of the new form are same. another partner involved is the relative. so no selling or consideration is there.

That is for relationship and their understandings. But, it's not advisable for legal procedure...