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| The Tax Publishers2019 TaxPub(DT) 6797 (Mad-HC) INCOME TAX ACT, 1961
Section 45(4)
In the instant case, very significantly, there was only a reconstitution of partnership-firm by retirement of one of the partners the partnership firm continued. There was only a division of the assets on retirement in accordance with partner's entitlement on the share in partnership. In view of the peculiar facts provisions of section 45(4) did not get attracted on retirement of partner and consequential allotment of his share in assets of assessee-firm.
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Capital gains - Applicability of section 45(4) - Retirement of partner and consequential allotment of his shares in assets of firm -
Question arose for consideration as to was whether on a reconstitution of assessee firm, asset transferred to outgoing partner or amount paid to him attracted capital gains tax liability in the hands of assessee or not in terms of section 45(4).Held: In the instant case, very significantly, there was only a reconstitution of partnership-firm by retirement of one of the partners the partnership firm continued. There was only a division of the assets on retirement in accordance with partner's entitlement on the share in partnership. In view of the peculiar facts provisions of section 45(4) did not get attracted on retirement of partner and consequential allotment of his share in assets of assessee-firm.
Followed:National Company v. Asstt. CIT (2019) 415 ITR 5 (Mad) : 2019 TaxPub(DT) 3211 (Mad-HC).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2009-10
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