In this case

the Amount recorded in books will be treated as full value of consideration

and not the fair market value.


Transfer of capital asset by a Partner to partnership firm  - Special Cases


Note :-

Similar will be the case on Transfer of capital asset by a Member to AOP / BOI .



Mr A purchased a Building for Rs 13 lacs on 10 July 2013
Later he started a partnership with B called AB & Co and introduced building as his capital contribution on 1 Sep 2015
Fair Market value was Rs 16 lacs as on that date
However,partnership firm booked it at 20 lacs by passing entry


Building A/c Dr   2000000

   To A's Capital Account 2000000

Calculate Capital Gains

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CA Maninder Singh

CA Maninder Singh is a Chartered Accountant for the past 14 years. He also provides Accounts Tax GST Training in Delhi, Kerala and online.