The trading capital was 1 lakh on April 1st. A net profit of 9 lakhs after deducting all expenses for the year. I withdrew 2.4 lakhs from exchange to bank and utilized for personal expenses. Let us assume no other income, liabilities or assets to keep it simple.
Now Schedule Balance Sheet in ITR3
Source of Funds --> Propreitor Capital = (1 lakh + 9 lakh - 2.4 lakh) = 7.6 lakhs
Application of Funds-->Other Assets = 7.6 lakhs. Nothing in bank or cash. Source and Application sections are matching.
Kindly let me know your thoughts whether will this be a problem as Balance Sheet is for 7.6 lakhs whereas Profit Account is for 9 lakhs is my question. If Balance Sheet needs to balance 9 lakhs then kindly advise how to show this consumption of 2.4 lakhs for personal expenses which is nothing related to business expenses.
CAclubindia
