dissolution of firm

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Amrish (Querist)
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30 July 2010 we have audit of a partnership firm. they close their business w.e.f. 31st march 2010. they also made dissolution deed on the same day. now are they suppose to cancel the pan allotted to their firm? are they suppose to make any correspondence regarding discontinuation of their business to income tax department? and as a auditor how should i cover this issue in audit report?

CA SURENDRA KUMAR RAKHECHA

CA SURENDRA KUMAR RAKHECHA (Expert)
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02 August 2010 Whenever a business is closed; the assessee is required to inform the ITO about it within 15 days of its closure.

Going Concern concept would not be continued.

All the assets and liabilities are to be stated on its realizable value rather than at historical cost or wdv (whichever is applicable).

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CA SURENDRA KUMAR RAKHECHA

CA SURENDRA KUMAR RAKHECHA (Expert)
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02 August 2010 Even if the assessee has not informed the ITO; still you can inform.

Practically speaking; there would be no penalty.

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