Sale of goods by a partnership firm to a partner
This query is : Open
CA Ksheerabthi Nathan
(Querist)
18 August 2013
whether sale of trading goods by a partnership firm to partner amounts to sale or not as per income tax act?
CA PARAS BAFNA
(Expert)
18 August 2013
It can be treated as sales.
CA Ksheerabthi Nathan
(Querist)
19 August 2013
please state whether there is any specific provision governing it or is there any supporting case law for it.why should not be it treated as drawings?
19 August 2013
It is specified sales and if the saleeing price is below the cost then the provisions of section 40A(2) will apply
19 August 2013
@ Mr Bafna
Not 'can be treated' but 'must be treated'
@ Mr.Ksheerabthinathan
It cannot be termed as WITHDRAWAL because VAT people are there. Wherever VAT is there it is SALE. However, in narration it can be declared withdrawal by goods.
@ Mr SS Agarwal
Thanks for your professional answer.
Not 'can be treated' but 'must be treated'
@ Mr.Ksheerabthinathan
It cannot be termed as WITHDRAWAL because VAT people are there. Wherever VAT is there it is SALE. However, in narration it can be declared withdrawal by goods.
@ Mr SS Agarwal
Thanks for your professional answer.
CA Ksheerabthi Nathan
(Querist)
21 August 2013
thanks to everyone for the answers
CA PARTH SHAH
(Expert)
10 May 2015
It can be treated as Withdrwals. However for firm must pay VAT on such transactions as rightly said by Mr Bajaj.
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