Capital gain

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

20 August 2011 if a partnership firm transfer a assets to his partner.are any capital gain are aries in this situation pl given me ans on it

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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20 August 2011 In case of dissolution, Section 45(4) talks about the fair market value to be taken as sales consideration, where the assets of a firm are distributed between the partners. Capital gains in such transactions arises as the same is treated as transfer.
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In case where dissolution does not take palce, , in my view, the value at which the asset is transferred to the partner has to be taken as sales consideration.
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The cost of acquisition will be the book value or indexed cost of acquisition depending upon the nature of the asset.

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