A partnership firm was converted into a private limited company. Before such conversion, the land which belonged to the firm, was revalued and the enhanced value of the land was credited to the current account of the partners of the firm. On conversion of the firm as a company, the enhanced value of the land, which was shown in the current account of the partners, was shown as loan from the partners in the hands of the company. The AO treated the enhanced value of land as capital gains of the firm and brought it to tax. Order was affirmed by CIT (A) and Tribunal . On appeal to the High Court held that by  revaluation of capital asset and crediting to partners current account and treating it as loan from partners ,amounted to violation of clauses (a) and (c) of proviso to S.  47(xiii)Transaction amounted to transfer of a capital asset  liability to pay tax on such capital gain would fall not on assessee-firm but on successor company.