Sale of goods by a partnership firm to a partner


18 August 2013 whether sale of trading goods by a partnership firm to partner amounts to sale or not as per income tax act?



18 August 2013 It can be treated as sales.


19 August 2013 please state whether there is any specific provision governing it or is there any supporting case law for it.why should not be it treated as drawings?


19 August 2013 It is specified sales and if the saleeing price is below the cost then the provisions of section 40A(2) will apply

19 August 2013 @ Mr Bafna

Not 'can be treated' but 'must be treated'

@ Mr.Ksheerabthinathan

It cannot be termed as WITHDRAWAL because VAT people are there. Wherever VAT is there it is SALE. However, in narration it can be declared withdrawal by goods.

@ Mr SS Agarwal

Thanks for your professional answer.

21 August 2013 thanks to everyone for the answers

10 May 2015 It can be treated as Withdrwals. However for firm must pay VAT on such transactions as rightly said by Mr Bajaj.



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