03 March 2012
Hi to all..... My Query is Suppose there are 2 partners in partnership firm and they decide to admit a 3rd partner. During admission of a new of a new partner,existing partners decided to revalued the assets and liabilities of the firm,and after revaluation there is revaluation profit. And Existing Partners decides to retire from the firm after receiving their respective share from revaluation profit. So in such case what will be the tax consequeneces?
03 March 2012
In such a case rigour of section 45(4) will not apply hence no tax consequences will be there on the firm See CIT v. kunnamkulam Mills Board 257 ITR 544(Ker-HC) CA MANOJ GUPTA JODHPUR 09828510543
But what about the tax treatment in the hands of retiring partner who is actually receiving the notional profits on account of revaluation of assets in cash/bank??
CAclubindia
