NO CAPITAL GAINS TAX ON ASSETS TRANSFER AT COST PRICE: TRIBUNAL

In a ruling that will help companies planning to transfer capital assets to other companies, including group entities, at the cost price, which may be significantly lower than the market price, the Mumbai tax tribunal has held that no capital gains tax needs to be paid in such transactions. The tribunal rules against the income-tax department’s order that considered the difference between the transactions value and the prevailing market price as capital gains on which tax would be levied. The tribunal felt that capital gains tax cannot be levied since no gain had accrued.