Dear Members,
A private ltd co. is partner in a Partnership firm and received a profit after tax from partnership firm, what will be the treatment of this profit.
I think it will be added directly to the Reserve & Surplul of the company becouse it is a profit after tax, so no need to pay tax on this profit by the company.
Please corect me if i m wrong and suggest the best way of treatment of this profit..
Thanks in advance..
As per my opinion, it shall be treated as if the dividend is recieved due to the share invesment in the PS firm.. So the same is to be taken in the P & L Account of the books of accounts as per The Companies Act,1956.. However, for the purpose of Income Tax Act, the same can be considered under Income from other sources and the same is Exempt u/s. 10(2A) of the Act..
I agree with Mr. Srikanth.he said the right thing
CAclubindia
