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2018 (7) TMI 1409 - HC - Income TaxSale of property owned exclusively by one of the partners - liability to short-term capital gains in the hands of the partnership firm as per the provisions of section 45(4) - Whether the Tribunal was correct in finding a transfer of property in favour of the partnership firm when there was no registered conveyance effected and there could be no short-term capital gains assessed in the hands of the partnership firm when the sale was made by the owner of the property ; who happened to be a partner of the firm ? Held that:- In the instant case the contention of a licence granted to the partnership firm and the family arrangement has been rejected. Then the question is how the sale was effected; when the land and building was brought into the common stock, the capital of the firm; which fact has been affirmed hereinabove. If it is on dissolution of the firm then the same would be assessable under section 45(4). Even if the partner has been allotted the share, prior to dissolution, as is revealed from the facts, capital gains arise on the firm. Firm is assessable to capital gains and answer the questions against the assessee and in favour of the Revenue, upholding the order of the lower authorities. We desist from speaking on the actual computation of tax due for the reason of there being an appeal pending from the fixation of fair market value of the land at the time of sale; made on remand by the Tribunal.
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