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Please advice

Deepak Sharma (CA FINAL) (74 Points)

23 November 2011

Partner has brought in cash as capital.. the case is selected for scrutiny... is any violation committed under income tax act...?????

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8 Replies

Deepak Sharma (CA FINAL) (74 Points)
Replied 23 November 2011

the requirement is to quote any section or case law where the same is permissible...

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RAKESH (Almost CA) (2199 Points)
Replied 23 November 2011

no violation under the income tax act.

RAKESH (Almost CA) (2199 Points)
Replied 23 November 2011

wru from ???

Deepak Sharma (CA FINAL) (74 Points)
Replied 23 November 2011

chennai..... the requirement is quote any case law or section no where the same is permitted ot not dissallowable...

Vikas (CA) (1135 Points)
Replied 23 November 2011

friend...partnership wont work only if no capital is brought in..business needs money...n it comes from its partners... u urself tell me is share of share disallowable... of course not...hence there is no section...its a matter of common sense... hope i resolved the issue...

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Deepak Sharma (CA FINAL) (74 Points)
Replied 25 November 2011

good try friend.... but the practice is not as simple as common sense.. the capital is brought in as CASH.. and not routed through bank.. so it is getting added to income... and now this needs to be justifeid...

Mitul Shah (Article Assistant) (34 Points)
Replied 25 November 2011

If the amount of the CASH brought for SHARE in PARTNERSHIP is Substantial or Greater in SIZE than the SOURCE of the same has to be Disclosed if the same is ASKED for & if it is Unaccounted CASH the same may be ADDED TO the Income by the Assessing Officer.

Regards

Mitul Shah

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Vikas (CA) (1135 Points)
Replied 27 November 2011

friend....u didn't say that its undisclosed cash investment n it would b correctly added to income u/s.69 if the source or accounting entry can not b justified.... u/s.68, 69 , 69A,B,C need strong explanation...

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