Capital gain on admission of a partner
This query is : Resolved
13 December 2013
3 partners - Partnership Firm
Old Ratio - 33.33%, 33.33% and 33.33%
Now 1 new partner admitted
New Ration - 25%, 25%, 25% and 25%
My question is relinquishment of 8.33% share in the profits and remuneration by old partners, will it attract capital gain in the hands of old partners??
Old Ratio - 33.33%, 33.33% and 33.33%
Now 1 new partner admitted
New Ration - 25%, 25%, 25% and 25%
My question is relinquishment of 8.33% share in the profits and remuneration by old partners, will it attract capital gain in the hands of old partners??
CA PARAS BAFNA
(Expert)
13 December 2013
It can be argued that the partners have surrendered something out of their respective shares.
.
Simultaneously, they have received a human brain, man-power and inherent benefits attached with the personality and shared their responsibility with the new comer.
.
The consideration as such can not be decided in the numerci terms so as to implement capital gain provisions.
.
It will not attract Capital Gains.
.
Simultaneously, they have received a human brain, man-power and inherent benefits attached with the personality and shared their responsibility with the new comer.
.
The consideration as such can not be decided in the numerci terms so as to implement capital gain provisions.
.
It will not attract Capital Gains.
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