15 February 2011
A partnership firm purchases raw materials from a proprietory firm having Mr X as common partner and proprietor in both the unit. The firm makes payment to proprietor firm in cash exceeding Rs 20000.00, on the assumption that the partner can withdraw the money in cash, and proprietor can add the money in cash. Does the money paid for purchases attract section 40 A (3) Please explain.
CAclubindia
