Section 43C of ITA, 1961 : Section 43C: Special Provision For Computation Of Cost Of Acquisition Of Certain Assets

Explanation using Example

Imagine a company, 'A Ltd.', merges with 'B Ltd.', forming an amalgamated entity 'AB Ltd.'. As part of the amalgamation, 'A Ltd.' transfers its machinery to 'AB Ltd.'. Later, 'AB Ltd.' decides to sell this machinery, which is now part of its stock-in-trade. According to Section 43C(1) of the Income-tax Act, 1961, when 'AB Ltd.' calculates its profits from the sale, the cost of acquisition of the machinery will...

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