Question And Answer
Subject: 45[3] etc
Querist: bs
Answered by:
Tags: , , ,
Date: May 15, 2022
Query asked by bs
  1. 7 to 8 partners introduced personally held land into a firm as own capital contribution
  2. Firm constructed warehouse for renting out.
  3. Firm reconstituted from time to time by retirement of old & admissions of new partners  . No revaluation on such reconstitutions . All brought and paid only capital balance
  4. presently few new and few original partners remained in firm
  5. now if  firm registers land in own name what will be tax implications in hands of frim and new /old partners ?
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Every year, the land has been shown in the books of the firm as its own property. Therefore, the land is duly recorded as the property of the Firm. Registration of an immovable property is a mere formality and does not amount to purchase of the immovable property. The actual year of purchase of property will be relevant and not the date of registration. Hon’ble Supreme Court in the case of Gurbax Singh v. Kartar Singh and Others 254 ITR 112 (SC) wherein it was held that the document takes effect from date of execution and not date of registration.

Upon registration of the land, there is a risk of scrutiny and provisions of section 56 (2)(x) read with 50C of the Act would be invoked by the Department for computation of FMV of the said land.

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