Hi Dears,
According to the mutual agreement of the Partners with the Firm, if any taxes / duties / Cess paid by the Firm should be transfer to the partners capital accounts. But our firm's earlier accountant not followed the clause and the payment of Sales Tax / duty / cess paid (by way of chqs only) to the concern departments charged to the P&L a/c. Now the income tax assessing officer disallow the said expenditure. Even though it is allowable expenditure according to your agreements it shld be transfer to your partners account but not charged to p&l a/c. is there any case law in supporting to the Assessee Firm? thnx in adv. ..
CAclubindia
