[aaykarbhavan] Inquiry : Income Tax

Kindly Advise :

A proprietor of trading business purchased a piece of land ( a plot ) in his personal name. This land was reflected as an asset in the balance sheet of his proprietorship business. After some years, a partner was added to the existing business and proprietorship concern converted to Partnership Firm.

The new partner made contribution of his capital and all the old capital and assets of the previously proprietor of the business concern remained as such, that is, the Land bought in his personal name remained in the books of the firm.

Kindly guide;

1)    Could this Land be debited, at Book Value, to the capital account of the Partner who purchased the land in his personal name when he was the sole proprietor, so that it no longer remains as an asset of the Firm and no more reflected in the balance sheet of the Firm.  

2)    Who is the actual owner of the land atare present.  If the Land is sold, to whose account would the capital gain go. Firm's   account   OR  the Partner who purchased the land in his personal name when he was the sole proprietor.

Best Regards.

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