Ownership of Property in Individual Capacity of Partners Cannot Be Considered For LTCG To Their Partnership Firm: ITAT

The ITAT has ruled that ownership of property in the individual capacity of partners cannot be considered for Long Term Capital Gain (LTCG) exemption when transferred to their partnership firm. The tribunal clarified that for LTCG exemption under relevant sections (e.g., Section 54), the property must be owned by the assessee claiming the exemption, which in this case would be the individual partners, not the firm. This decision emphasizes the distinct legal identities of partners and their firm, ensuring that tax benefits are claimed by the rightful entity and preventing misuse of exemptions in property transfers.