| Question And Answer | |
|---|---|
| Subject: | stock vs section 9B |
| Category: | Income-Tax |
| Querist: | BKS |
| Answered by: | Law Intern |
| Tags: | partnership firm, Section 9B |
| Date: | September 11, 2025 |
when a flat under construction is allotted to a partner,
what is the entry to be passed by the firm/partner ?
what is FMV u/s 9B in above case ?
is form 5C compulsory ?
As the flat is held as stock-in-trade, it will be taxable as profits and gains u/s 9B in the firm’s hands based on FMV.
In the books of the firm, the Partner’s Capital A/c will have to be debited and Stock-in-Trade A/c credited. The difference of profit will be shown in the P& A/c.
In the hands of the partner, the Flat will be debited and Partnership Firm A/c credited.
The FMV u/s 9B will have to be determined by a registered valuer as per Rule 11U/11UA.
Form 5C is not compulsory for stock-in-trade. It applies only to capital assets.
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