Dissolution of partnership firm

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PRAVEEN JAIN (Querist)
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01 November 2017 Dear All

In our partnership firm, there is a loss of 1.26 lacs in current year. we, both partners, want to dissolve the partnership.
in our case what is the treatment of loss, should we debit it to partner's capital a/c in profit/ loss sharing ratio?

1. If we debit the capital a/c by loss then how it will reflect in ITR?
2. in case of loss, is audit compulsory?
3. if we dissolve it during the year then how to surrender PAN and when?

Regards
Praveen Jain

Amol S Joglekar

Amol S Joglekar (Expert)
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02 November 2017 1. Debit the loss to capital account as per your LOSS sharing ratio.
2. Does your partnership business fall under eligible business u/s 44AD
3. Once you dissolve your firm, you can surrender PAN

RAJA P M

RAJA P M (Expert)
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02 November 2017 Dear Amol S Joglekar Sir.,

If you don't mind please give the Details for (2) option please...

PRAVEEN JAIN

PRAVEEN JAIN (Querist)
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02 November 2017 Sir,
There is NIL income / receipt in current year. only rental expenses of 1.26 lacs in current year. Net loss of 1.26 lacs debited to partner's capital a/c on dissolution of firm. Please advice is it a case of compulsory audit or not ?

Firm was earning through commission in previous years. and no audit was conducted in previous years.

Thanks

Amol S Joglekar

Amol S Joglekar (Expert)
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02 November 2017 since there is no any sale/receipt, audit is NOT required to be done.

Message likes : 2 times

PRAVEEN JAIN

PRAVEEN JAIN (Querist)
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15 December 2017 Dear All
We had just dissolved our partnership firm duly supported by Deed of Dissoluton
As There is no receipt / sale / income in current financial year 2017-18 except rental expenses of Rs.1.26 lacs, which are debited to partner's capital account.
Now, Please guide the procedure to surrender PAN and how to file ITR of current F.Y. 2017-18. Can we surrender PAN before filing ITR of Current F.Y. or we have to wait till next year to file ITR and then Surrender of PAN.

Regards

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