B joined Avtar & Co. as a partner on 1st June, 2018. He contributed his vacant land in the firm as his capital which was recorded in the books of the firm at ₹ 5 Lakhs. The land was inherited by B from his father in April 2010 and the fair market value on that date was ₹ 2,00,000. The land was originally acquired by his father in August 2005 for ₹ 1,00,000. The fair market value on 1st June, 2018 was ₹ 10 Lakh. The full value of consideration received as a result of transfer of land by B as capital would be taken as:
A. ₹ 1,00,000
B. ₹ 2,00,000
C. ₹ 5,00,000
D. ₹ 10,00,000
Answer:C
B joined Avtar & Co. as a partner on 1st June, 2018. He contributed his vacant land in the firm as his capital which was recorded in the books of the firm at ₹ 5 Lakhs. The land was inherited by B from his father in April 2010 and the fair market value on that date was ₹ 2,00,000. The land was originally acquired by his father in August 2005 for ₹ 1,00,000. The fair market value on 1st June, 2018 was ₹ 10 Lakh. The full value of consideration received as a result of transfer of land by B as capital would be taken as:
A. ₹ 1,00,000 B. ₹ 2,00,000 C. ₹ 5,00,000 D. ₹ 10,00,000