Reconstitution of firm does not constitute transfer u/s 45(4)

National Company Vs ACIT ( (Madras High Court) Conclusion: Section 45(4) would not be attracted on the retirement of the two partners and consequential allotment of their share in the assets in the assessee-firm as there was no element of transfer of interest in the partnership assets by the retiring partner to the continuing partners. Held: Assessee-company was converted into a partnership firm. At the time of retirement of two partners and admission of a new partner during the relevant year valuation of assets and liabilities of firm took place. It was held there was only a reconstitution...