Dear Friends,
I want to have clarity over the issue: How to tax income earned on sale of proprietorship business?
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Taxability of Income on sale of proprietory business
Replies (2)
A business as a going concern would constitute a capital asset within the meaning of section 45 - CIT v. F.X. Periera & Sons (Travancore)(P.) Ltd. [1990] 184 ITR 461 (Ker.).
An undertaking is a capital asset - ‘Capital asset’ will definitely include an ‘undertaking’ and the cost of acquisition of an undertaking could be worked out by applying the provisions of section 55(2) read with sections 48, 49 and 50 - Indian Bank Ltd. v. CIT [1985] 153 ITR 282 (Mad.).
Succession of proprietor ship by a company does not constitute transfer -section 47
Hope it was useful
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