Transactions not regarded as transfer - section 47
This query is : Resolved
09 December 2011
Hi,
XYZ Ltd has transfered its investment (Land) for a consideration of Rs. 200 crores to ABC Ltd, a 100% subsidary of PQR Ltd which is a 100% subsidary of XYZ Ltd (the transferor).
My doubt is, Can XYZ Ltd consider this income from sale of Investment to ABC Ltd which is step down subsidary to XYZ Ltd as transfer not considered as transfer u/s 47(iv) of Income Tax Act, 1961 ?
The doubt arises since there is no definition for subsidary company under income tax act. Thus taking the definition of subsidary co u/s 4(1)(ii)(c) Companies Act, 1956, can ABC Ltd be considered as the subsidary of XYZ Ltd ?
XYZ Ltd has transfered its investment (Land) for a consideration of Rs. 200 crores to ABC Ltd, a 100% subsidary of PQR Ltd which is a 100% subsidary of XYZ Ltd (the transferor).
My doubt is, Can XYZ Ltd consider this income from sale of Investment to ABC Ltd which is step down subsidary to XYZ Ltd as transfer not considered as transfer u/s 47(iv) of Income Tax Act, 1961 ?
The doubt arises since there is no definition for subsidary company under income tax act. Thus taking the definition of subsidary co u/s 4(1)(ii)(c) Companies Act, 1956, can ABC Ltd be considered as the subsidary of XYZ Ltd ?
09 December 2011
Exemption u/s 47 (iv)is available only when the asset is transferred to the immediate subsidiary only , on this case PQR ltd.
as per case law
(Kalindi investmetn p ltd vs cit 2002.)
as per case law
(Kalindi investmetn p ltd vs cit 2002.)
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