| Question And Answer | |
|---|---|
| Subject: | APPLICABILITY OF SECTION 9B AND 45(4) |
| Category: | Income-Tax |
| Querist: | ANKUR AGRAWAL |
| Answered by: | Advocate Shashi Ashok Bekal |
| Tags: | Capital Gains, partnership firm, Retirement of partner |
| Date: | August 10, 2022 |
There is a partnership firm having partners F (father), S1 (Elder son) and S2 (Younger son) carrying a hotel business.
Each partner is having an equal ratio in firm (i.e. 1/3 each).
On 01/04/2021 Partner S1 retired from the firm and his balance in capital A/c is transferred to Unsecured Loan A/c. Neither the excess payment of cash is made nor any immovable property is transferred to retiring partner.
Remaining partners (i.e. F and S2) are now sharing an equal ratio in the reconstituted Partnership Firm.
Query: Whether the section 9B and 45(4) are applicable in the given case?
As no cash payment nor capital asset is given to the retiring partner, section 9B nor section 45(4) of the Income-tax Act, 1961 is attracted.
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