TaxTonic Session: SC Judgment on Partnership Firm’s Taxation - Implications & Consequences!

Episode Duration:
90 Minutes

Episode Background:
'TaxTonic', a new 'subscriber only' thought leadership series, is Taxsutra's endeavour to consistently deliver top notch technical content to it's readers. The labyrinth of tax rulings on convoluted transactions keeps the world of taxation unpredictable and ever-evolving. This series will feature engrossing presentations, incisive analyses and a deep-dive by the tax experts on burning issues & controversies. So, gear up for a 'tonic' to chisel your tax mind and challenge your wit.

Speaker:
Mr. Milin Mehta (K C Mehta & Co LLP)

Moderator:
Mr. Sachin Sastakar (Chartered Accountant)

What shall the episode cover?

The Finance Act, 2021 introduced Sections 9B, 45(4) and 48(iii) whereafter CBDT notified the Rules for implementation of the new scheme of taxation of partnership firms, effective from AY 2021-22. The new framework intends to remove uncertainty and ambiguities arising due to revaluation or self-generated assets while a payment is made to the partner on reconstitution. The Hon’ble Supreme Court recently delivered a landmark judgment in the case of Mansukh Dyeing and Printing Mills [TS-904-SC-2022] wherein it clarified that the scope of taxation on revaluation of assets and reconstitution of a firm which paved the way for taxation of even old transactions. While the judgment is well-received providing quietus on conflicting judgments of various High Courts on this subject, it has also thrown upon certain new challenges.

Taxsutra presents the next episode of TaxTonic to decipher the ratio laid down by the Hon’ble Supreme Court and its implications on the newly enacted Section 9B and 45(4). The episode is focused on:

1. Analyse the SC judgment in Mansukh Dyeing and Printing Mills
2. Understand the ratio to differentiate between Distribution of Assets vis-à-vis Revaluation of Assets
3. Interplay of tax principles emanating from the SC judgment principles with the newly enacted Section 9B and Section 45(4)
4. Tax treatment on assignment of interest in Partnership Firms
5. Tax treatment for Non-Residents