The CIT (Appeals) correctly invoked Section 45(4) to tax the ...

Partners' capital accounts revaluation taxed as transfer u/s 45(4). Fair market value, not revalued amount, is consideration u/s 48.

Case Laws Income Tax

August 3, 2024

The CIT (Appeals) correctly invoked Section 45(4) to tax the increase in partners' capital accounts due to revaluation of firm assets, as this constitutes transfer of capital assets by the firm. The Supreme Court in Mansukh Dyeing case held revaluation and crediting partners' accounts is a transfer u/s 45(4). However, the CIT (Appeals) erred in considering the revalued amount as full value of consideration u/s 48. Fair market value on the transfer date should be considered, which the assessee proved as Rs. 7 lakh per acre based on Sub-Registrar's certificate. Capital gains are to be computed u/s 45(4) using this fair market value. The matter was decided partly in favor of the assessee.

View Source

← Previous Next →

The CIT (Appeals) correctly invoked Section 45(4) to tax the ...

Partners' capital accounts revaluation taxed as transfer u/s 45(4). Fair market value, not revalued amount, is consideration u/s 48.

Case Laws Income Tax

August 3, 2024

You may also like:

Short term capital gain - capital gain arose from transfer of land to the partnership firm by way of capital contribution as the assets was converted to Fixed Capital...

Capital gain - transfer - revaluation of assets - partnership firm - retirement of one partner and reconstitution of firm with new partners - applicability of Section...

Addition u/s 45(4) on account of revaluation of assets - distribution of the revaluation amount to the partners capital accounts during the continuation of the firm -...

Distribution of capital assets u/s 45(4) - partnership firm - crediting revaluation surplus to partners account settling their accounts on their retirement - It is the...

Transfer of Asset – whether covered by the word “otherwise” contained in section 45(4) -Once the assets have been removed from the capital account of the partners and...

Taxability of capital gain in firm - revaluation of asset being land held by the partnership firm - money equivalent paid to retiring partners to enhanced portion of the...

Taxability in the hands of partners v/s firm - transfer of capital asset by firm to partners - There is no merit in the arguments advanced by assessee, that transfer of...

Addition under the head “Capital Gains” - Fair Market Value of the salable area - The method adopted by the Assessing Officer to compute Fair Market Value of salable...

Capital gain on sale of land - transfer of stock in trade as capital contribution by the assessee in the AOP - the transaction of impugned land introduced by the...

Reconstitution of partnership firm - one partner retired and two were continue - provisions of Section 45(4) is applicable as it amounts to transfer - capital gain is...

When a retiring partner takes only money towards the value of his share and when there is no distribution of capital asset/assets among the partners there is no transfer...

Capital gain u/s 45(4) - payment to the retiring partners - All that happened was the firm's assets were evaluated and the retiring partners were paid their share of the...

Capital gain - partnership firm - conversion from investment into stock in trade of shareholding - Firm transferred the shares as loss to partners and adjusted its...

When the Fair Market Value of the asset as on date of dissolution of the partnership firm is deemed to be the full value of consideration received or acquired as a...

Addition towards capital gains u/s 45(3) - transfer of land as Capital contribution in the Partnership firm - Tribunal agreed with CIT(A) that after conversion of...

Quick Updates: