The question raised by the applicant was “Whether on the facts, in law and in the circumstances of the case, the Applicant is liable to any capital gains tax on transfer of Limited Liability Partnership (LLP) interest (LLP Interest) in an Indian LLP. i.e. Conversant Software Development and Campaign Management Services LLP (EPSIN)  to Commission  Junction Holdings B.V  (NVCJN) under the provisions of the Act.?   

Department has raised objection to admissibility of application on ground that it involves determination of fair market value of property. AAR held that  only question of principle of taxability’ that is to be decided and not mechanism of computation of capital gains and Assessing Officer will be free to determine fair market value of property in case it is held that applicant is liable to pay capital gains tax. Accordingly on fact, question of capital gain arising in application cannot be held to be barred by clause (ii) of proviso to section 245R. Application is admitted.