29 October 2010
Amount receivable from an old partner when he terminates his partnership is now written off by the firm, whether capital gain arises on such transaction? whether it is a relinquishment of right?
29 October 2010
If it is a debit balance in the capital / current account of the partner and if that debit balance is written off in the accounts of the firm, then that wrote off amount is not an allowable expenses in the hands of the firm. Like wise, the said amount is a liability in the hands of the partner and hence it is not a relinqishment of an asset hence no capital gains.
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