whether assets distributed to its partners at the time of dissolutioon is taxable in the hands of partners as gift (56(2)(vii).if the value of the same is exceeded 50000.
if not then whats the correct treatment ....
whether assets distributed to its partners at the time of dissolutioon is taxable in the hands of partners as gift (56(2)(vii).if the value of the same is exceeded 50000.
if not then whats the correct treatment ....
the balance sheet of a partner shows the capital in the firm as a current asset.
At the time of dissolution, the reciept is first adjusted against this asset and it is nullified.
In case of surples, the excess amount is taxed as business gain.
Gift is a unilateral transaction whereas in this case, its a bilateral transaction as the partner recieves consideration for giving up the right of being a partner.!!
surplus*
Agreed with ankit 
CAclubindia
