Withdrawl of profit share in cash
This query is : Resolved
18 September 2014
Sir
A partner wants to withdraw his profit share in cash from his partnership firm. Is this allowable or disallowed under sec 40A(3)
A partner wants to withdraw his profit share in cash from his partnership firm. Is this allowable or disallowed under sec 40A(3)
24 September 2014
Dear Pritom,
Section 40(A)3 provides expenditure in respect of which payment is made in cash exceeding Rs.20,000/- shall not be allowed as deduction.
While in present case, share of profit is not expenditure, it is only appropriation of profit, hence according to my view the said section is not applicable here.
Section 40(A)3 provides expenditure in respect of which payment is made in cash exceeding Rs.20,000/- shall not be allowed as deduction.
While in present case, share of profit is not expenditure, it is only appropriation of profit, hence according to my view the said section is not applicable here.
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