15 January 2011
If a person have started his business as proprietorship firm and took the exemption under section 80 I(C) for first two FY, now he want to change the constitution as a pvt. ltd. co. will he be liable to take the exemption for further years or not? how much expansion he has to be made for that?
15 January 2011
In case the conversion in accordance with Section 47(xiv), the transaction would not be regarded as transfer. In such Case the proprietor should retain not less than 50% of the total voting power , without any change upto 5 years.
As per Section 80-IC(4)(ii) the condition prescribed is- It is not formed by transfer to a new business of machinery or plant previously used for any purpose. In my view , as there is no transfer, the benefit can be enjoyed by the pvt ltd co till the unexpired period.
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