No capital gain tax on capital contribution made in partnership firm

The High Court of Bombay held that where assessee-company made capital contribution in a partnership firm in form of land, shares and securities, since said firm was genuine which carried on its business activities regularly, even though in such a case, aforesaid contribution constituted transfer of capital asset, yet it did not result in any capital gain subjected to capital gain tax.

Jamnalal Sons Ltd. v. Commissioner of Income-tax, Nagpur* [2017] 77 taxmann.com 350 (Bombay)