Withdrawal of exemption where transferee converts transferred asset to stock in trade or holding ceases, treating gains as capital gains.

If, within a limited period after a non taxable transfer, the transferee converts the capital asset into, or treats it as, stock in trade, or the parent/holding company ceases to hold the whole share capital of the subsidiary, the gains that were not charged by reason of the non recognition clauses shall be deemed income chargeable as capital gains in the previous year in which the transfer occurred.

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