TREATMENT OF CLOSING STOCK WHEN PARTNERSHIP IS CONVERTED TO SOLE PROPRIETORSHIP UNDER TWO DIFFERENT SITUATIONS :
1. WHEN THERE IS EXCESS ITC .
2. WHEN IS THERE NO EXCESS ITC .
ALSO WHETHER PARTNERSHIP FIRM SHOULD CLEAR CLOSING STOCK BY MAKING A SALES BILL TO SOLE PROPRIETORSHIP OR IT CAN TRANSFER IT TO THE SOLE PROPRIETOR ( ONE OF THE PARTNER ) WITHOUT MAKING SALES BILL.
KINDLY ADVICE ON THE ABOVE.
Exploring Closing Stock Treatment in Partnership to Sole Proprietorship Conversion: Input Tax Credit Scenarios Analyzed A query was raised regarding the treatment of closing stock when a partnership is converted into a sole proprietorship, specifically under two scenarios: when there is excess Input Tax Credit (ITC) and when there is no excess ITC. The question also inquired whether the partnership firm should clear the closing stock by issuing a sales bill to the sole proprietorship or if it can transfer the stock to the sole proprietor, who is one of the partners, without issuing a sales bill. The response directed the inquirer to a related discussion for further details. (AI Summary)
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