Assets received by retiring partners through family arrangement on reconstitution of firm not attracts capital gain tax

M/s. National Company Vs ACIT (Madras High Court) Conclusion: Assets received by the retiring partners of a firm through family arrangement did not amount to ‘transfer’ for the purpose of imposing capital gain, and therefore, the reconstitution of firm would not attract Section 45(4). Held: In the instant case, assessee originally a sole proprietorship concern got converted as a partnership firm in the year 1974 and admitted his son, two daughters and one son-in-law, into the partnership. Later on, assessee passed away and thereafter, the partnership firm was reconstituted, which further r...