revaluation of assets

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This query is : Resolved

sanjay barjatiya (Querist)

11 March 2010 XYZ partnership firm have 3 partners A,B,C and A having a plot of land which is given on lease to XYZ (Firm) , now A wants to transfer the land to the firm as his capital contribution at book value.

-what will be the tax impact on transfer?

_after transfering the land to firm , firm will revalue the land and credit the all partners capiatl accounts at their share.
any tax impact

CA Robin Betala

CA Robin Betala (Expert)

11 March 2010 A will be liable to tax to the difference of amount at which firms take the value of asset in the book and the cost of acquistion of asset to A

Revaluation of asset is not taken into consideration by income tax

Rasesh

Rasesh (Expert)

11 March 2010 In my view, if the capital is to be considered at the revalued amount, then the AO will consider the revalued amount as the amount at which the asset is transferred. The difference will be taxed in the hands of the partner as capital gains.

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