Capital gains
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
03 May 2016
Dear Experts one of my client who is a partner in a Real Estate partnership firm has decided to retire by taking his share from stock in trade. I want to know does it amount to Capital Gain or Business income in the hands of partnership firm? Please suggest.
04 May 2016
Transfer of stock-in-trade results in PGBP not capital gains.
Section 45(4) is applicable on transfer of a 'capital assets' by way of distribution of capital assets on the 'dissolution' of a firm.
The provisions of section 45(2) does not apply for two reasons:
1) There is no transfer of capital asset; and
2) There is no dissolution of the firm.
Section 45(4) is applicable on transfer of a 'capital assets' by way of distribution of capital assets on the 'dissolution' of a firm.
The provisions of section 45(2) does not apply for two reasons:
1) There is no transfer of capital asset; and
2) There is no dissolution of the firm.
Rupesh Jain
(Expert)
04 May 2016
there is tfr of assets to partner , income for firm will be under business income and taken on market value of assets given to partner.
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