CBDT has inserted a new Rule 8AB to provide that where the amount is chargeable to tax as income of partnership firm under Section 45(4), the firm shall attribute such amount to capital asset remaining with it in the following manner:
i) Where the amount chargeable to tax under Section 45(4) relates to revaluation of any capital asset or valuation of a self-generated asset or self-generated goodwill of the firm, the amount attributable to the capital asset remaining with it shall be the amount which bears to the amount charged under Section 45(4) in the same proportion as the increase in, or recognition of the value of that asset because of revaluation or valuation bears to the aggregate of increase in, or recognition of, the value of all assets because of the revaluation or valuation.
ii) Where the amount chargeable to tax under Section 45(4) does not relate to the revaluation of any capital asset or valuation of a self-generated asset or self-generated goodwill of the firm, or relate only to the capital asset received by the partner from the firm, the amount charged to tax under Section 45(4) shall not be attributed to any capital asset for the purposes of Section 48(iii).
ii) Where the amount chargeable to tax under Section 45(4) does not relate to the revaluation of any capital asset or valuation of a self-generated asset or self-generated goodwill of the firm, or relate only to the capital asset received by the partner from the firm, the amount charged to tax under Section 45(4) shall not be attributed to any capital asset for the purposes of Section 48(iii).
Further, the CBDT has also clarified that Rule 8AB is also applicable to the capital assets forming part of a block of assets. The partnership firm is required to furnish the details of the amount attributed to the capital asset remaining with it in Form No. 5C.