14 September 2013
Hi, My query is, Mother is the prop of the proprietorship firm for the last 20 year. during the financial year 2012-13, she transferred the business to his son during the mid of financial year. The turnover of the firm is around 60 lacs (required tax audit u/s 44ad). My question is 1.) whether i have to prepare two profit & loss account 2.) whether mother is required to file there income tax return for the fy 2012-13 3) whether i have to prepare two capitals account. 4.) what is the accounting treatment of capital account balance of the mother.
14 September 2013
1) Yes 2) Yes. 3) Only one capital account. 4) If the business is transferred for a consideration, capital account balance may be paid to her or transferred to her loan account. If without consideration, treat it as gift in the accounts of both the persons.
Sir, if i prepare two balance sheets than whether audit is required in that case. because in that case the approximate sale of each prop is around 30 lacs. This is the first year of audit, can i make a gift from mother to his son at the begining of financial year and prepare only one balance sheet.
CAclubindia
