2016 (2) TMI 799

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....n 45(4) ? and (ii) Whether on the facts and circumstances of the case, the Tribunal was right in law in holding that the provisions of Section 45(4) are attracted even though there was no distribution of assets ?" 2. Heard Mr.V.S.Manoj, learned counsel appearing for the appellant/ assessee and Mr.J.Narayanaswamy, learned Standing Counsel for the Department. 3. The assessee was originally a partnership firm, which came into existence in 1979-80. It comprised of four individuals as partners upto the year 1990. On 4.1.1990, a private limited company called M/s.Pipeline and Process Equipment (P) Limited was floated by the partners of the partnership firm themselves. Thereafter, the private limited company was admitted as the fifth partner i....

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....an end, the moment they released their shares in favour of the private limited company and that therefore, it was a clear case of dissolution of the firm and not conversion of the firm into a company. Therefore, the assessee is before us. 7. As rightly pointed out by Mr.J.Narayanaswamy, learned Standing Counsel for the Department, Section 47 that treated particular transactions as not amounting to transfer, was amended by the Finance Act, 1987 with effect from 1.4.1988. Clause (ii) of Section 47, which made 'any distribution of capital assets on the dissolution of a firm, body of individuals or other association of persons', not to be covered by Section 45, was omitted by the Finance Act, 1987 with effect from 1.4.1988. By the very....