Question And Answer
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Date: August 10, 2022
Query asked by ANKUR AGRAWAL

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?

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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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