Disposal of business by individual to wholly-owned company.-
(1) Where a resident individual (hereinafter referred to as the “transferor”) disposes of all the assets of a business of the transferor to a resident company, no gain or loss shall be taken to arise on the disposal if the following conditions are satisfied, namely:
(2) Where sub-section (1) applies —
(i) in the case of a depreciable asset or amortised intangible, the written down value of the asset or intangible immediately before the disposal;
(ii) in the case of stock-in-trade valued for tax purposes under sub-section (4) of section 35 [ ], that value; or
(iii) in any other case, the transferor’s cost at the time of the disposal;
(i) in the case of a consideration of one share, the transferor’s cost of the assets transferred as determined under clause (b), less the amount of any liability that the company has undertaken to discharge in respect of the assets; or
(ii) in the case of a consideration of more than one share, the amount determined under sub-clause (i) divided by the number of shares received.
(3) In determining whether the transferor’s deductions under sections 22, 23 or 24 have been set off against income for the purposes of clause (c) of subsection (2), those deductions shall be taken into account last.
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