Capital gain on sale of land

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NITIN SHARMA (Querist)
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23 January 2016 Mr X has transferred his land to a partnership firm XYZ &co. XYZ &co is converted into XYZ Pvt Ltd under Part IX conversion Now the land is to be sold. Whether it would be capital gain of company or Mr X? It is to be noted that land is still registered under name of Mr X. Is Part IX conversion valid then?

CA CMA CS Ram Pavan Kumar Melam

CA CMA CS Ram Pavan Kumar Melam (Expert)
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25 January 2016 Income tax law does not talk about registration, it just uses the word transfer, and it includes part performance of a contract for the purposes of section 53-A of the Transfer of Properly Act, 1882. Transfer made by Mr. X to partnership firm attracts capital gains u/s 45(3) if Mr. X transferred it as capital contribution. Book entry is sufficient here.
There is no capital gain on transfer of assets from XYZ & Co. to XYZ Private Limited as a result of succession of the firm by the company u/s 47(xiii).
However, since the XYZ private limited transferred the land the provisions of section 47A attracts.