Description:
S.47 (iv): Capital gains – Capital loss – Transfer of business and work-in-progress – 100 per cent subsidiary.
Assessee transferred business and work- in – progress to hundred percent subsidiary, which is Indian company, In view of provisions of section 47 (iv), capital gains on such transfer of capital asset was not chargeable to tax. At the same time loss arising on transfer of business assets would also not be allowed as deduction.
Dy. CIT vs Mother Dairy Fruits & Veg. (P) Ltd (2011) 45 SOT 186 (Delhi) (Trib).
Source:
1. www.aiftponline.org
2. AIFTP TIMES Volume.No.2 July, 2011, Page No. 6.
Our Comment:
Profits, losses due to transfer of business, work in progress to 100% subsidiary is not allowable expenditure, also not taxable as capital gain if the subsidiary is an Indian Company
