Question And Answer
Subject: capital gain
Querist: g y limaye
Answered by:
Tags: ,
Date: April 9, 2022
Query asked by g y limaye

reply by mr. Bekal is ambiguous. the question is ” so dissolved firm due to death of one of two partners payment of 50 lakhs by remaining partner who will continue the business as proprietor or take some other as partner whether firm should pay tax on goodwill or otherwise

one view in bcaj  says that payment to legal heir is not taxable

issue being common views of many persons needed

my view is it is not taxable as legal heir is not partner

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Where there are two Partners and one of them dies, the Partnership stands dissolved.

Where the Legal Heirs of the deceased partner is paid in Cash, on account of dissolution of the Firm, neither section 9B nor section 45(4) of the Income-tax Act, 1961(Act) is attracted.

However, where the Partnership Firm is dissolved and the surviving Partner takes the assets of the Firm, section 9B of the Act will be attracted in the hands of the Firm.

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