Return of income

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

25 November 2013 i have problem in filing return of income.

A person is doing business ( proprietorship name ABC )and is also partner in the firm (name XYZ ). he has taken loan from firm of Rs.25,00,000.

And in next year he has transferred 41,00,000 in the firm (addition in capital in firm)in this case instead of debiting XYZ account (firm ),he has debited his capital a/c so his capital gone negative.Rs.-10,00,000 ..

in that year they have shown his capital(proprietor)AS positive i.e. difference of that loan and negative balance.(15,00,000 as positive capital.)this is continue from five year.
that means on paper they showing loan and negative balance but not in return.

so if he want to rectify it than what should he do now..

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
Follow

25 November 2013 Transactions between a firm and a partner are not hit by Section 269SS or Section 269T.
.
Match the position by suitably debiting or crediting the capital a/c and the firm's A/c, in such a way that things should be in line with the firm's Accounts.
.
You can show Cr or Dr Loan separately and Capital Invested in the firm Separately.
.

Querist : Anonymous

Querist : Anonymous (Querist)

25 November 2013 paras ji ,

i know what is fault..and what is right entry..
but what now should i do to correct it...can i show investment in his account in return....if yes than how ?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
Follow

25 November 2013 1.In case of the returns already filed, it is not advisable to change the details. As you have got the explanation in your hand as its merely a presentation aspect.
.
2. In the next return, you may segregate the Investment in Firm's Capital by showing the same under the head other assets. Similarly loans taken or given to/from the firms can be shown under the respective heads of Loans & Advances/Unsecured Loan.
.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now