Amount credited to Partner’s capital account prior to retirement for goodwill whether taxable as capital gains with cost of acquisition as per sec. 55(2)(a) as NIL.

To Appreciate this MP decision – original decision of ITAT in ITA No.1700/Bang/2016 Dating to 3rd May 2019 needs to be referred to. This decision is a landmark decision in the realm of sec. 45(4) of the Income tax act.

It is precisely not explained as to if the goodwill of Rs. 38,38,200 was also credited in the Capital account of the assessee prior to retirement but it appears so thus on an implicit reading.