Takeover of proprietory business by existing pvt. ltd. co

1)A proprietor is running its business.He intends to transfer his business to a private limited company.

2)Obviously, there will be a transfer of assets(movable and immovable), consequently, it will be covered under capital gains.

3)On a plain reading of Sec. 47(xiv), it does not treat such transfer as 'transfer of capital assets', hence no liability of capital gains will be attaracted if provisions of 47(xiv)(a) to (c) are complied with.
Querry :

The provision starts like this "where a sole proprietory concern is succeeded by a company........ "

Does it mean proprietory business is converted into private limited company and consequently assets are being transferred ? While in our case the prop. business is proposed to be taken over by an existing private limited company.

If this will be the interpretation, the transaction shall attract capital gain.

Your valueable opinion is solicited.

Sanjay

CA. SANJAY K. AGARWALA