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2009 (6) TMI 645 - AT - Income TaxCapital gain - Whether CIT(A) erred in holding that on dissolution of partnership firm the difference between the market value of stock and book value of stock lying with the firm at the time of dissolution cannot be brought into tax since it is not a capital asset - In the present case, all the assets and liabilities including capital assets were taken over by M/s D.D. International (P) Ltd. as sole proprietor as a going concern on the dissolution of the firm - As it is the finding of the Tribunal that no transfer had taken place in this year, the occasion for levying tax on any capital gain did not arise. From that the conclusion is that the relevant date for ascertaining the year in which the capital gains are to be charged under s. 45(2) is the year in which the transfer took place - There was no transfer of capital gain under s. 45(4) in the relevant year. - Decided in favor of the assessee Regarding valuation of closing stock or it is treated as capital assets u/s 2(14) - AO valued the closing stock at fair market value by adding 10.16 per cent to the stock declared by the assessee in its books of account - Held that: GP rate of the assessee-firm and the AO has taken the same GP rate for computing profit element on taking over stock by M/s D.D. International (P) Ltd. from assessee - Decided in favor of the assessee
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