Dear All,
Would request your opinions/suggestions on below issue: Facts of the case:
1. My Assessee is a partnership firm with two brothers as partners.
2. Land on which Factory building is constructed by the firm is legally owned by Partners of the firm (as per Land revenue document)
3. This Land is also shown in Fixed Assets of the firm and also payments for purchase of the same have been made from the Firm's Bank Account.
4. The said firm is proposed to be reconstituted by retiring one partner(i.e. one brother) and adding wife/daughter of the continuing partner(i.e. another brother)
Whether Capital Gains in hands of firm will come in picture for transfer of the Land shown as fixed asset by virtue of this reconstitution, assuming that this reconstitution is just to avoid dissolution of the firm. Will provisions of 45(4) will apply ? Regards.
CAclubindia
