where assets of a co. are distributed to its shareholders on its liquidation,why such distribution is not regarded as transfer(in context of capital gain)?
3 Replies
Nirav
(Accountant)
(595 Points)
Replied 27 November 2011
because for transfer there must be give and take relationship. here co. gives assets to shareholders and dont recieve anything from shareholders. so it cant be treated as a transfer.
kamal kishor sen
(STUDENT Rajasthan)
(2156 Points)
Replied 27 November 2011
Assets transfer on liquidation to their share holders is excluded in capital gain tax. under section 46(1)/47.
CS,CA F,Numrologi TusharSampat
(CS CA F Numerologist Astrologer Graph)
(85935 Points)
Replied 27 November 2011
But it is treated as dividend under sec 2 (22).
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