Question ID :
38104
108293
A land owned by partnership firm is transferred to retiring partner. Whether Sec.45(4) is attracted
Posted by
ATUL MUKUNDLAL TOSHNIWAL
on
Apr 19, 2019
Filed Under
DIRECT TAXES
In case of transfer of capital asset by partnership firm to retiring partner, there is extinguishment of common interest of partners of the firm and creation of absolute ownership of particular partner, to whom capital asset is allotted. Hence it is included in word "otherwise" in section 45(4) and even if there is no dissolution of firm, section 45(4) is attracted. See Bombay High Court judgement in case of CIT Vs. A. N. Naik Associates and Ors.
Posted by
CA. chunauti dholakia on
Apr 20, 2019
Answer ID :
76509
There will be no transfer of assets in the case of the retirement of a partner from the firm.
The correct position of law, as laid down by the later judgement of the Bombay High Court in the case of Prashant S.Joshi Vs ITO and also some other High Courts.
Posted by
CA. BISHT RAKESH on
Apr 20, 2019