Income Tax Ordinance, 2001

CHAPTER-V

PROVISIONS GOVERNING PERSONS PART IV COMPANIES

Income Tax Ordinance, 2001 CHAPTER-V PROVISIONS GOVERNING PERSONS PART IV COMPANIES From: 2024-12-29 - To: 0000-00-00 96. Disposal of business by association of persons to wholly-owned company.- (1) Where a resident association of persons disposes of all the assets of a business of the association to a resident company, no gain or loss shall be taken to arise on the disposal if the following conditions are satisfied, namely:- (a) The consideration received by the association for the disposal is a share or shares in the company (other than redeemable shares); (b) the association must own all the issued shares in the company immediately after the disposal; (c) each member of the association must have an interest in the shares in the same proportion to the member’s interest in the business assets immediately before the disposal; (d) the company must undertake to discharge any liability in respect of the assets disposed of to the company; (e) any liability in respect of the assets disposed of to the company must not exceed the association’s cost of the asset at the time of the disposal; (f) the fair market value of the share or shares received by the association for the disposal must be substantially the same as the fair market value of the assets disposed of to the company, as reduced by any liability that the company has undertaken to discharge in respect of the assets; and (g) the company must not be exempt from tax for the tax year in which the disposal takes place. (2) Where sub-section (1) applies - (a) each of the assets acquired by the company shall be treated as having the same character as it had in the hands of the association; (b) the company’s cost in respect of the acquisition of the assets shall be - (i) in the case of a depreciable asset or amortized intangible, the written down value of the asset or intangible immediately before the…