APPLICABILITY OF SECTION 9B , 45(4) AND 48 (iii)

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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  Partnership firm, stock in trade , retiring partners ?

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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