The Commissioner of Income-tax Vs Mansukh Dyeing and Printing Mills (Supreme Court)
Date-24th November, 2022
Sub-Whether amount credited on account of revaluation of fixed assets and credited to the partners’ account is liable to be taxed u/s 45(4) of the Income-tax Act,1961.

The department has made a major win today in the above case when the Supreme Court held that upon revaluation of fixed asset, the credit which is made to the Partners’ capital account is liable to be taxed u/s 45(4) and approved the decision of the Bombay high Court in the case of CIT Vs A.N.Naik Associates and Ors(2004) 265 ITR 346(Bom). This decision will have huge implications for all those assessees who had resorted to revaluation and credited partners’ capital account.

Ramesh Patodia
24-11-2022