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Whether on the facts and in circumstances of the case and in law, Tribunal was right in holding that assessee is entitled for exemption under s. 47(v) with respect to the transfer of land to M/s Simpson & Co. Ltd. ?

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Sec. 47(v) of Income-tax Act, 1961 - Capital gains - In view of the provisions of the Companies Act, 1956, it is not possible for the PFIPL to have less than two shareholders. As a matter of fact, there cannot be any company in India which has less than two members i.e., shareholders. Now the requirement of s. 47(v) is that the whole of the share capital of the subsidiary company should be held by the holding company. The whole of the share capital being held by the holding company is certainly not the same thing as whole of the share capital being held in the name of the holding company. In fact, that situation is a legal impossibility in India. In case one is to proceed on the basis that entire share capital of the subsidiary company should be held in the name of the holding company, there cannot be any situation in which s. 47(v) can apply. Thus, the appeal of the revenue against the order of Tribunal dismissed. - CIT V/s SHARDLOW INDIA LTD. - [2020] 316 CTR 297 (MAD)