Section 45(2) not apply on Land transferred by partner as capital contribution recorded as stock-in-trade in books of firm

ITO Vs Shri Mahendrabhai D. Zalavadia (ITAT Rajkot)

The issue under consideration is whether section 45(2) will be applicable in situation where Land transferred by partner as capital contribution recorded as stock-in-trade in the books of firm?

In the given case, ITAT state that the impugned land was transferred by the partners to the firm as capital contribution which was recorded as stock-in-trade in the books of the firm. As such there was no transfer of capital

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