Partnership having branch

DEar sir

in my case one of our client M/s neera associates , a partnership firm having PAN for Neera Associates deals with mineral water trading starts a branch with the name of quality readymades - a textile show room . in sales tax branch added and both neera & quality have same TIN and in vat return of neera texile sales & purchase also included . in income tax it comes under tax audit category. in income tax how it to be shown? can quality readymade be shown as branch of neera and consolidated statements can be filed under the pan of neera? is there any problem for that in income tax or partnership act? please help me its very urgent

Replies (1)

I assume that the partners/ profit shares of both businesses are same and adequate changes were made in the partnership deed to include investment in a different type of business.

I suggest that you prepare two sets of books(incl, trading profit and loss accounts, BS etc) for the 2 businesses. Some of Neera's funds must be used to set up Quality business. This should be shown as Advance in Neera's books and Unsecured loan recd in Quality's books. The IT return should be filed under Neera's PAN.(Apply for change if any particulars in PAN are changing)

Also you have to disclose the same in form 3CD.

(I assume that the names mentioned above are not the actual names of your clients.)

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