The assessee surrendered his profit sharing ratio to the extent of 5% share in\u00a0 favour of existing partners and received Rs .400 as compensation from them .\u00a0 The share was reduced from 30% to 25% . The assessee has the said receipt as not taxable as a capital receipt.\u00a0\u00a0 The AO has not agreed with the submission of assessee and\u00a0 asseseed as revenue receipt . Order of the AO is affirmed by the CIT (A) . On appeal allowing the appeal of the assessee the Tribunal held that the compensation\u00a0 received by the assesssee from the existing partners on mere reduction of its share of profits in the partnership\u00a0 firm does not amount to any transfer u\/s 2 (47) of the Act\u00a0 and consequently , does not give rise to capital gains . Referred CIT v. P.N.Paunwani ( 2013) 356 ITR 676 (Karn) (HC) ( ITA No. 7189\/Mum\/ 2014 & 5324 \/ Mum\/2016\u00a0 dt. 19 -3 2020.(AY. 2010-11 & 2012 -13 )<\/p>\n
\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"
S.45: Capital gains- Reduction in share capital- Compensation received by an existing partner on reduction of his share in the partnership firm is not liable gains tax [ S. 2(47), 4, 45(1) , 45(4)<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-14540","post","type-post","status-publish","format-standard","hentry","category-income-tax-act"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-3Mw","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/14540","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=14540"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/14540\/revisions"}],"predecessor-version":[{"id":14541,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/14540\/revisions\/14541"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=14540"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=14540"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=14540"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}