Pls help me in this ques:-
Can a partnership firm do business transection (at market prices) with a pvt. ltd. company of which all the partners are directors.
For eg:-
Partnership firm "x" does business with Pvt. ltd. co. "Y" and all the partners of firm "X" are directors of co. "Y". The sales proceed takes place at the prevailing market prices.
Then can the AO treat this income of firm "X" as the income of pvt. ltd. co. "Y"
Pls reply
If the transactions are at prevalent market price, or at the price for which the firm is selling goods to other customers also, then ITO can not treate firm's income as the income of the company.
| Originally posted by : Paras Bafna | ||
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If the transactions are at prevalent market price, or at the price for which the firm is selling goods to other customers also, then ITO can not treate firm's income as the income of the company. |
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Agreed
They can do transactions and the ITO cannot treat this as income of either.
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