02 July 2010
there is a partnership firm named "A" in which "x" and "y" are partners. name of the other firm is "B" whose partners are "x"and "Z". partners of both the companies have mutually decided to close the firm "A". firm "A" transfers only fixed assets to its partner "x" and as "X" is also a partner in firm "B" he takes the assets to firm "B" as addition in capital.
What are the tax consequences for this? What are other legal requirements to be followed?
02 July 2010
In the above query first Firm A will be dissolved. So all the assets received by X will be taxable u/s 45(4). After that if he will introduce these assets as capital in other business then there will be no taxability.
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