Held that violation of the condition prescribed in s. 47(xiiib)(f) is only relevant to the computation of capital gain under S. 45 arising on certain transfers; since the allegation of the AO is that the assessee LLP has violated the conditions prescribed in S. 47(xiiib)(f) by transferring the share capital and reserves and surplus of the company to the partners’ accounts upon conversion to LLP, the addition made by the AO under S. 68 cannot be upheld as none of the ingredients of the said provision is attracted. (AY. 2017-18)
ITO v. NICAF LLP (2025) 236 TTJ 858/ 175 taxmann.com 1001 (Mum)(Trib)
S.47(xiiib): Transaction not regarded as transfer-Capital gains-Conversion of firm into LLP]-Cash credit-Transfer of share capital and reserves of the company to the partners accounts upon conversion to LLP-No credits found in the assessee’s books of accounts-The AO erred in making the addition in the hands of the assessee-Assuming that there was transfer, it is the credit in the partners’ accounts and not in the assessee’s account-Addition was deleted. [S.45, 47(xiiib)(f), 68]
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