1. Transfer of capital asset or stock on dissolution/reconstitution will be consider as transfer for firm and not partner who receive it

2. Reconstitution includes admission, retirement or change in profit sharing ratio

3. 9B will tax firm on difference of FMV and indexed cost of assets

4. 45(4) will tax partner on Profit = money received + FMV of capital asset – capital account balance (excl revaluation)

5. Stock in trade will be taxable as business income and asset as capital gain

6. Where the value of capital gain is negative it shall be treated as zero.

7. when a partner forgoes a profit-sharing ratio and receives money from the firm, section 9B will not apply

8. Notional goodwill credited to capital accounts of partner will also not attract 9B

9. when a firm transfers stock or capital asset the taxable event is attracted only on receipt basis and not on crediting to capital account (debatable)

10. Section 45(4) is not applicable when partner receives only stock upon reconstitution