B joined Avtar & Co. as a partner on 1st June, 2018. He contributed his vacant land in the firm as his capital which was recorded in the books of the firm at ₹5 lakh. The land was inherited by B from his father in Ap

CS Executive · Tax Laws and Practice · PYQS · June 2019
B joined Avtar & Co. as a partner on 1st June, 2018. He contributed his vacant land in the firm as his capital which was recorded in the books of the firm at ₹5 lakh. The land was inherited by B from his father in April, 2010 and the Fair Market Value (FMV) on that date was ₹2 lakh. The land was originally acquired by his father in August, 2005 for ₹1 lakh. The Fair Market Value (FMV) on 1st June, 2018 was ₹10 lakh. The full value of consideration received as a result of transfer of land by B as capital would be taken as:
(A) ₹1 lakh
(B) ₹2 lakh
(C) ₹5 lakh
(D) ₹10 lakh

Answer & Explanation:

Correct Answer: Option (C)

Official answer key: (C).

Topics: Income Tax Act, 1961

Open in Interactive Practice Hub · Full Practice Hub · Chapter Weightage · More in this subject

Related Questions in this Topic