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Querist : Anonymous

Querist : Anonymous (Querist)

22 September 2016 if one firm "x " give assets to "xy " (other relative partnership firm) at the time of dissolution of firm X
Is it possible ,if yes then what will be tax liability on both firm firm.
firm has transferred the assets to other firm on book value.means they transferred and close the accounts of assets. other firm will record this assets on same value no consideration is passed for this

"x' firm booking entry
Partners current ac dr
to Fixed assets and

In new firm "xy" f
ixed assets ac dr to
Partners current a/c (in 50:50 ratio)
both are partner in same firm capital gain is applicable,i

f yes then please guide me treatment in book of accounts.

Amol S Joglekar

Amol S Joglekar (Expert)

22 September 2016 capital gain is applicable.

Querist : Anonymous

Querist : Anonymous (Querist)

22 September 2016 if i consider book value as a sales consideration and cost of acquisition. then capital gain will be nil.

fixed assets includes Ac, generator, office equipment means all are depreciable assets.

entry passed by us through current account is wrong then what entry we should pass

Amol S Joglekar

Amol S Joglekar (Expert)

22 September 2016 if all the assets are depreciable assets, then your job is easy.
Any immovable property in it like building?

Querist : Anonymous

Querist : Anonymous (Querist)

22 September 2016 No immovable property. please tell me correct accounting and capital gain treatment as new firm are not getting any consideration .
so planning to take same value for FMV and COA so no capital gain

Amol S Joglekar

Amol S Joglekar (Expert)

22 September 2016 yes, you are right......there is no capital gain in such situation...
(In case, income tax people ask in any of cases, you can always proclaim that the same is the WDV and the net realisable value is even lower than that.)

Querist : Anonymous

Querist : Anonymous (Querist)

22 September 2016 entry passed in books of account is correct through partner current account.

Thanks...:)

Amol S Joglekar

Amol S Joglekar (Expert)

22 September 2016 yes, it is quite ok.....you are most welcome.

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