Income tax

shanky budhiraja (Querist) 03 January 2011 This query is : Resolved
Please tell me if a partner who is a Company (public or Pvt) transfer its investments in equity shares to a partnership firm as capital contribution then what would be the tax implication in the hands of partner company and what will be the COA for the partnership firm of such investments in equity shares transfer by its partner as capital contribution

Please quote relevent sections for support of your of answer

Thanks in advance with regards

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Vineet (Expert) 08 January 2011
Please refer to section 45(3) of Income Tax Act. Your query is squarely covered.

1. Capital Gains Tax chargeable in the hands of partner company.

2. Full value of consideration will be the value recorded in books of firm.

3. The same value will become cost of acquisition for the firm.

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