(1) The assets will have to be revalued in case the book values of the assets are different from their FMVs. (Assets A/c …. Dr; Revaluation Reserve A/c …. Cr). Thereafter, the Retiring Partner’s capital account will have to be debited and the asset (flat) account credited.

(2) GST will not apply because the transaction is not a supply of goods and services. It is a settlement of the pre-existing rights of the retiring partner during partnership reconstitution.

(3) S. 194IA will not apply because there is no “buying” or “selling” of the flat. There is only a settlement of the pre-existing rights of the retiring partner during partnership reconstitution.

(4) U/s 45(4)), allotment of the capital asset (flat) to the retiring partner will be deemed to be a “transfer” by the firm and attract capital gains on the difference between the FMV and the Cost of acquisition. In the partner’s hands, the receipt will not be taxable except if the FMV exceeds the partner’s entitlement. In that case, the excess may attract s. 56(2)(x).

(5) The cost will be the actual expenditure incurred till allotment date, including payments to the builder, stamp duty, legal fees, interest on borrowings etc.

(6) The main clauses in the TAR are Clause 21 (Asset Details) and Clause 28 (Transfer of Assets). The details of the immovable Property has to be given such as the acquisition cost, mode of purchase etc. The details of the deemed transfer u/s 45(4) will also require to be given.

(7) Stamp duty value can be adopted as the FMV in a practical sense. If it is too high, you can obtain a valuation report and use that as the FMV.

(8) No, GAAR applies to “impermissible avoidance arrangement”. This is a routine retirement of a partner and the settlement of his dues.