Capital gain chargeable only on transferor and not on transferee: No Tax on firm on crediting Revaluation Surplus to Retiring Partners A/c

Mahul Construction Corporation Vs. ITO (ITAT Mumbai) In this case The AO wants to tax the amount credited in capital a/c of retiring as well as continuing partners within the realm of 45(4) of the Act. So far as amount credited to capital a/c of retiring partners is concerned, notwithstanding the fact that there is no distribution by firm to retiring partners, the transferor and transferee are like two sides of the same coin. The capital gain is chargeable only on the transferor and not on the transferee. In this case, the transferor is the partners who on their retirement assign their rights ...