Pratibha Khandelwal (Article Assistant) (590 Points)
05 December 2010Pls help me in this ques:-
Can a partnership firm do business transection (at market prices) with a pvt. ltd. company of which all the partners are directors.
For eg:-
Partnership firm "x" does business with Pvt. ltd. co. "Y" and all the partners of firm "X" are directors of co. "Y". The sales proceed takes place at the prevailing market prices.
Then can the AO treat this income of firm "X" as the income of pvt. ltd. co. "Y"
Pls reply
CA PARAS BAFNA
(Practising CA )
(33428 Points)
Replied 05 December 2010
If the transactions are at prevalent market price, or at the price for which the firm is selling goods to other customers also, then ITO can not treate firm's income as the income of the company.
MAS007
(ACCOUNTANT)
(124 Points)
Replied 06 December 2010
| Originally posted by : Paras Bafna | ||
 |
If the transactions are at prevalent market price, or at the price for which the firm is selling goods to other customers also, then ITO can not treate firm's income as the income of the company. |
 |
Agreed
Rahul Agarwal
(Future CA)
(217 Points)
Replied 06 December 2010
They can do transactions and the ITO cannot treat this as income of either.
CAclubindia
