| Question And Answer | |
|---|---|
| Subject: | Distribution of closing stock amongst the partners of LLP |
| Category: | Income-Tax |
| Querist: | Manali |
| Answered by: | Advocate Shashi Ashok Bekal |
| Tags: | Distribution of closing stock amongst the partners of LLP, LLP |
| Date: | November 8, 2022 |
Assessee is LLP having 4 partners out of them 3 are individual and one is another LLP, engaged in the business of constructions. They started the residential project and entire project is complete and completion certificate is also received from APPROPRIATE Local Athority . They have decided to distribute 4 unsold units of equal size between themselves.
Issues :
1. What are implication under stamp duty, GST and income tax
2. Whether it is okay , if they transfer these units at Ready reckoner rate? Even though last unit sold was much higher than ready reckoner rate?
3. Does it make a difference if these units are transfered first and dissolve the Llp or it is advisable to do it on dissolution distrubute these units to the partners.
Pl guide
Stamp Duty and GST will be applicable. The transfer to the partners will be tested under section 43CA read with section 50C of the Income-tax Act, 1961.
Transfer at the Stamp Duty value is advisable.
It is not understood as to why the LLP has to be dissolved. Transfer of stock in trade to the partners at the time dissolution can attract section 9B of the Income-tax Act, 1961.