Section 55 : Dissolution of entity:
1) A distribution made in proportion to the portion of profit earned by and that of capital contributed by any beneficiary in disposing the interests in the course of dissolution of any entity shall be deemed to be the payment of partial dividend and partial capital of that entity, if all of the following conditions are fulfilled:-

a) Where any distribution has been made by such entity in respect of cancellation, release or acceptance of the interest in that entity because of, inter alia, purchase by the entity of its interest or dissolution of the entity by following the process of law in force,

b) Where, except in cases of full dissolution, the rights of the beneficiaries in the portion of profits of that entity have not been computed in proper portion or could not be computed reasonably, and

c) Where the beneficiary who gets that distribution is not an associated person with the entity after the disposal.

2) Notwithstanding anything contained in Sub-section (1), that the provisions contained in that Sub-section and Section 53 shall not be applicable in cases where any entity purchases the interest of any beneficiary in the entity through the securities market recognized under the law in force and make distribution to that beneficiary.