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section 45(3)

Shelly (student) (95 Points)

21 April 2018

what was the logic behind introduction of section 45(3)?

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (194747 Points)
Replied 21 April 2018

As no fiction is created regarding accrual of profits, section 45(3) falls short to create charge on transfer of capital asset by the partner to the firm by way of capital contribution. The lacuna which is present in sub-section(3) of section 45 is also present in sub-sections (1A), (2), (3), (4) , wherein legislature has sought to create charge in respect of those instances wherein there is no accrual of real profit or gain in commercial sense. But the provisions are not adequate to create charge in respect of transactions dealt with by them. Therefore, even in these cases one may argue that applying the above analysis, the charge fails.

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Shelly (student) (95 Points)
Replied 21 April 2018

sir, can you explain in easy words?

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