Tax implications on transfer on share holding

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Saurabh Garg (Querist)
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10 December 2010 there is a firm having 2 partners engaged in a hotel business.

They wants to discontinue the same.

They have 2 options :

Either sale the land which they have acquired for hotel business

Or Transfer their respective holdings to other 2 persons...

In my opine, in 1st case Capital gain tax liability will attracted..

I am confused regarding the tax treatment on second one...
Please helpp...

CS ,CMA Shambhu Kr. jha

CS ,CMA Shambhu Kr. jha (Expert)
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10 December 2010 in second case also attract capital gain because it is not mandatory that capital gain will arise only on selling of the capital goods , what treatment will be when you will transfer the capital asset ?

Saurabh Garg

Saurabh Garg (Querist)
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10 December 2010 Actually sir, when partners sale theor holdings, it can be treated as sale of business...then in such case would capital gains will be attraected....

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CS ,CMA Shambhu Kr. jha

CS ,CMA Shambhu Kr. jha (Expert)
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11 December 2010
As far i think difference between net worth and sales consideration will attract tax as under the head capital gain.

Saurabh Garg

Saurabh Garg (Querist)
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11 December 2010 Thanx for ur kind guidance, can we find another way out....