24 July 2010
I want to know whether in the following cases capital gain is attracted or not.
Case1-In a Pvt Ltd company one director who holds 5000shares of 100 each resigned and his shares are transferred to
i-an existing shareholder
ii-an existing share holder who is also a director
Whithout any consideration, will the answer be different if all the above directors are the employee directors of the company.
case-2 In a partnership firm one partner resigned or retired and he transferred all his shares to another person who subsequnntly admitted as a partner in the firm in place of the retiring partner.
24 July 2010
Case 1 Yes the Capital Gains will arise. If its free of Cost then it will not be taxable as section 47 gets attracted.
Case 2 - In case a partner retires then he relinquishes his share in the Firm but as decided by the SC in case of BAI SRINBAI K KOOKA case this will not be taxable
24 July 2010
If director gives free of cost it would amount to gift taxable under the head other sources.. tat is it would be taxable in the hands of the recipient
CAclubindia
