Section 45(4) Inapplicable to Capital Introduced by New Partner: ITAT Bangalore

Anand Diagnostic Laboratory Vs DCIT (ITAT Bangalore) ITAT Bangalore held that provisions of section 45(4) of the Income Tax Act are application only when there is transfer of any asset to the partners account from the firm. Accordingly, section 45(4) cannot be invoked in case of incremental capital brought in by the new partner. Facts- The assessee is a partnership firm engaged in the business of diagnostic center. During the course of search, it was observed that “other discount” is being offered to the customers and corporate clients by the assessee at the time of payment which is not re...