Question ID :
TREATMENT OF PARTNERS CURRENT ACCOUNT
One of our client who is a partnership Firm has filed its return of income u/s.44AD admitting 8% income on gross turnover. The partners have shared the gross receipts amount received in banks in their proportionate ratios.
Since the return is filed/s.44AD the share of profit from firm in partners books is less than what has been transferred from bank.
For Eg; Gross receipts Rs.1000000/-(Rs.5 lacs each transferred to 2 partners)
Share of profit is Rs.40000/- each only (8% of Rs.1000000/- offered u/s.44AD)
What is the treatment of the amount showing as excess credit in the books of the partners
Jan 20 2023 12:00AM