Capital gain on revaluation profit

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Jigar Chudasama (Querist)
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03 March 2012 Hi to all.....
My Query is
Suppose there are 2 partners in partnership firm and they decide to admit a 3rd partner. During admission of a new of a new partner,existing partners decided to revalued the assets and liabilities of the firm,and after revaluation there is revaluation profit.
And Existing Partners decides to retire from the firm after receiving their respective share from revaluation profit.
So in such case what will be the tax consequeneces?

CA MANOJ GUPTA

CA MANOJ GUPTA (Expert)
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03 March 2012 In such a case rigour of section 45(4) will not apply hence no tax consequences will be there on the firm
See CIT v. kunnamkulam Mills Board 257 ITR 544(Ker-HC)
CA MANOJ GUPTA
JODHPUR
09828510543

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Jigar Chudasama

Jigar Chudasama (Querist)
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05 March 2012 Thank You Sir!!!

CA Amit Talada

CA Amit Talada (Expert)
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19 April 2013 Dear Sir,

But what about the tax treatment in the hands of retiring partner who is actually receiving the notional profits on account of revaluation of assets in cash/bank??

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