A partnership firm (firm) was incorporated on 20-02-2014 with four partners each contributed Rs.3375000/- and having 25% share in profit / losses. The nature of business of firm is to develop real estate and deal in sites. The firm purchased a plot of land for Rs.13200000/- on 12-05-2014. No business had commenced however some development on plot was done till 2024. There was no further sale or purchase of land. Between 2014 & 2022 two partners retired and one new partner was inducted in the firm. The retiring partners were paid only their capital contribution of Rs.3375000/-. This amount was…
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The assessee is a partnership firm constituted by four partners having mainly stock in trade. The firm is reconstituted two partners of the firm have retired. The retiring partners are given stock in trade as their share the questions are as under: (i) The stock in trade given to the outgoing partner will be subject to capital gain or business profit, and it will be taxable in whose hands that is the hands of firm or the outgoing partner? (ii) The second question is , will it be capital gains or business profit, and income tax that has been paid,…
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Blue Sea Investments LLP has 3 equal partners. It has made investment in property of INR 2 Cr and in a start ups of INR 3 Cr. One of the partners wishes to retire from the LLP from 1 Jan 2024 due to his old age and need funds for his day to day living / medical expenses. On 1 Jan 2024 the market value of property and value of investment in startups is INR 5 Cr and INR 9 Cr respectively. What would be the tax impact on the LLP as well as retiring partner on amount paid to…
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Assessee is partnership firm having 3 partners. One of them has expressed his desired to retire from the firm due to diffrence of opinion about way of conducting the business. The retiring Partner is having debit balance of Rs. 6530000.00 to his account as on the date of retirement i.e. 31.08.2023. All of them agreed that the retiring partner will retire from the firm with immediate effect and he need not to pay any thing to the firm . Issues : how his debit balance is to be written of in the Books of accounts what are tax implication of…
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Assessee is partnership firm having two partners. The firm has purchase two immovable properties and they are in the name of the firm. The partners have decided to develop the one of the property and since they were short of funds and necessary infrastructure, they have decided to admit two new partners who will bring the necessary capital as well as ready to work as working partner for development of property No. 1. The profit sharing ratio is also decided to be equal as the incoming partner are bringing the necessary capital as per their profit sharing ratio. They have…
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There is a Partnership Firm having three partners.The Net worth of the Firm is Rs. 100 Crores (considering Market value of Goodwill and Immovable Properties-whereas Net worth as per Books of Accounts is Rs. 50 Crores) as on 31-03-2022. A new Partner is admitted in the Firm on 1-4-2022 and he is given 25% Share of Profit in the Firm whereas existing partners Share is reduced. New Partner contributes Rs 25 Lacs in Firm as his Capital Contribution.Existing Partners are not given any Stock nor any Immovable Property nor any money over and above the balances appearing in their capital…
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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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Even after amendments , if a retiring partners takes only capital balance in his account , what will be impact on taxation of firm/partner of reconstitution caused by retirement ? Will it amount to relinquishment of rights in FMV of properties to new partners at Zero value ?
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7 to 8 partners introduced personally held land into a firm as own capital contribution Firm constructed warehouse for renting out. Firm reconstituted from time to time by retirement of old & admissions of new partners . No revaluation on such reconstitutions . All brought and paid only capital balance presently few new and few original partners remained in firm now if firm registers land in own name what will be tax implications in hands of frim and new /old partners ?
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Firm with 2 partners A & B . A died on june 2020 B has taken C as a partner B & C has calculated the share of goodwill of A on the date of death. B and C decided to pay 50 lack in five years to the wife of deceased A whether the amendment made from 01/04/2020 is applicable in this case and any capital gain on this 50 lack is payable by the firm the goodwill amount calculated on death and paid to legal hair
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APPLICABILITY OF SECTION 9B , 45(4) AND 48 (iii)