11 January 2016
Firm is having 2 factories say A and B....both factories have seperate sales tax registration no. nd filing sales tax return from several years but a single PAN and filing income tax return by showing income of both factories....Now partners want new pan card for factory B and want to show the same as a seperate entity in income tax department......whether any capital gain liability will occur in seperating the land , factory ..????..(.partners are not changing)
thanks in advance
11 January 2016
Since, both factories A and B are under one partnership firm, the partners want to create a separate firm and transfer the factory B to such Firm now, capital gain will arise on such transfer. In case of immovable properties holding for a period in excess of 36 months will attract long term capital gain and for other assets used in the business short capital gains. For investments assets type of capital gains, depends on the period of holding as per section 2(42A).
CAclubindia
