regarding capital contribution to firm

[Guest]

assessee contributed his house along with land to a firm which was now transferd (not registered) to firm by partenership deed. in furtherance of partenrship deed firm demolished the same for purpose of making commercial complex.After an year there was dispute in partners & the land (only one roof constructed) was again taken over by the assesse partner. can now the partner be taxed u/s 45(3) of the act where possession was again taken back.

kindly guide

[CAGOPALJI AGRAWAL]

As per section 2(47)(vI), your transaction falls under section 45(3), but the facts of the case may allow to plan otherwise under the circumstances. 

AI Summary

Section 45(3) capital gains: contribution of property to a firm treated as transfer, possibly taxable on reversion depending on facts. Whether a partner's re-taking of property contributed to a firm is taxable under Section 45(3). The assessee contributed a house and land to the firm by partnership deed (not registered); the firm demolished the structure to develop a commercial complex; after a dispute the contributing partner again took possession with only one roof constructed. The transaction appears to fall within the statutory provision, but the reply notes that specific factual circumstances may allow for alternative tax planning or treatment.