XYZ, a partnership firm pays expenses on behalf of its partners. Will it be valid if the firm issues a debit note to its partner for the expenses met? Will it suffice as proof for accounting as well as income tax purposes?
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Issuance of debit note by a partnership firm to its partners
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It is as good as withdrawal by partner and will going to reduce partners capital ,so in my opinion it is sufficient as proof of withdrawal,further profit and loss will not get hit by withdrawals so it is ok for income tax law also.
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