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| The Tax Publishers2021 TaxPub(DT) 2667 (Mum-Trib) INCOME TAX ACT, 1961
Section 45
Excess amount received by partner on retirement from partnership firm was not liable to capital gain tax as there was not transfer of any asset under section 2(47) partnership when the firm P had only paid the amounts lying to the credit of the partner, i.e., the assessee and had not paid even a penny more than the amount lying in the credit of the partner's current account.
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capital gain - Chargeability - Amount received on retirement from firm -
Assessee claimed exemption under section 10(2A) in respect of amount received on retirement from firm PLA being Rs. 9,178,852. AO computed capital gain tax on the said amount under section 45(4) by holding it as receipts from 'transfer of rights in favour of other partners in the partnership firm. Held: Excess amount received by partner on retirement from partnership firm was not liable to capital gain tax as there was no transfer of any asset under section 2(47).
Applied:Dy. CIT v. Thakur Estate in ITA No. 4651/Mum/2016 and Co. No. 311/Mum/2017, dated 9-5-2019 and also in the case of ITO v. Ramal P Advani in ITA Nos. 6491 and 6963/Mum/2016, dated 27-8-2018Distringuished on facts :Shevantibhai C Mehta v. ITO reported in (2004) 83 TTJ 542 (Pune) : 2004 TaxPub(DT) 0864 (Pune-Trib), Shri Sudhakar Shetty reported in (2011) 130 ITD 197(Mum) : 2011 TaxPub(DT) 1123 (Mum-Trib), Savitri Kadur in ITA No. 1700/Bang/2016, dated 3-5-2019 : 2019 TaxPub(DT) 3593 (Bang-Trib)Followed:PLA, M/s. Rahas Investments Private Limited (now merged with the assessee, i.e.,Lupin Investments Private Limited) v. Dy. CIT ITA Nos. 2752 & 3366/Mum/2014, dated 5-2-2020 for assessment year 2010-11 : 2020 TaxPub(DT) 963 (Mum-Trib).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2010-11
INCOME TAX ACT, 1961
Section 69
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