11 September 2010
ABC is a partnership firm. The capital account balance of A as on 31/03/2010 is 10 lakhs.
On 1st April 2010, A retires from partnership.The firm pays Rs. 15 lakhs to A on his retirement and the accounts the balance 5 lakhs as goodwill in its books.
Is this 5 lakhs taxable in the hands of A? There are so many case laws.some of them say it is taxable and others say it is not taxable. I am confused.Pleae help.
12 September 2010
Excess amount received by Mr. A will not be taxable in their hands as per law declared by SC in case of R Lingmallu Raghukumar (247 ITR 801).
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