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Dear Professional Seniors & Friends.
Welcome to this wonderful weekend MCQ self-challenge!
This weekend's challenge is on the Assessment of Firms and liabilities of partners under different circumstances having 5 MCQs to be self-answered by participants to take a challenge. The detailed answers to these MCQs shall be posted on Monday for the self-assessment of the participants. This post shall be of immense use to the participant.
Weekend MCQ 13.1: From the firm M/s ABC, Mr. Cretires on 30.06.2017, Which among the following is correct about the assessment of the firm and liability of partners for the previous year 2017-187
(A) Assessment shall be made on Firm M/s ABC and Partners A & B will be jointly and severally liable along with the firm for any tax, penalty or
another sum payable.
(B) Assessment shall be made on Firm M/S AB, and Partners A & B will be jointly and severally liable along with the firm for any tax, penalty, or other sum payable.
(C) Assessment shall be made on Firm M/s ABC, and all Partners A B & C will be jointly and severally liable along with the firm for any tax, penalty, or other sum payable.
(D) Assessment shall be made on Firm M/S AB, and all Partners A, B & C will be jointly and severally liable along with the firm for any tax, penalty, or other sum payable.
Weekend MCQ 13.2: What if in the above question? Mr. D admits as a partner on 30.06.2017 and Mr. C did not retire?
(A) Assessment shall be made on Firm M/s ABCD, and Partners A B & C will be jointly and severally liable along with the firm for any tax, penalty, or other sum payable.
(B) Assessment shall be made on Firm M/S ABC, and Partners A, B & C will be jointly and severally liable along with the firm for any tax, penalty, or other sum payable.
(C) Assessment shall be made on Firm M/S ABCD, and all Partners A, B, C & D will be jointly and severally liable along with the firm for any tax penalty or other sum payable.
(D) Assessment shall be made on Firm M/s ABC, and all Partners A, B, C & D will be jointly and severally liable along with the firm for any tax.
penalty or other sum payable.
Weekend MCQ 13.3: From the firm M/s ABC. Mr. A Mr. B and Mr.C retire on 30.06.2017 and Mr.D, Mr., and Mr. F are admitted. Which among the following is correct about the assessment of the firm and liability of partners for the previous year 2017-187
(A) Assessment shall be made on Firm M/s ABC, and all Partners A, B, C, D, E & F will be jointly and severally liable along with the firm for any tax. penalty or other sum payable.
(B) Assessment shall be made on Firm M/S DEF. and all Partners A, B, C, D, E & F will be jointly and severally liable along with the firm for any tax. penalty or other sum payable.
(C) Separate assessment shall be made on Firm M/S ABC for the period 01.04.17 to 30.016.17 and on M/S DEF for the period 01.07.17 to 31.03.18 and all Partners A. B. C. D. E & F will be jointly and severally liable along with firm for any tax, penalty or other sum payable.
(D) Separate assessment shall be made on Firm M/S ABC for the period 01.04.17 to 30.016.17 and on M/S DEF for the period 01.07.17 to
31.03.18 and Partners D, E & F will be jointly and severally liable along with the firm for any tax, penalty, or other sum payable.
Weekend MCQ 13.4: Which of the options is correct regarding the assessment of the firm and liability of partners for the previous year 2017-18 as per the following scenario?
M/s ABC becomes M/s DBC on 30.06.2017
M/s DBC becomes M/s DEC on 30.09.2017
M/S DEC becomes M/s DEF on 31.12.2017
(A) Assessment shall be made on Firm M/S ABC, and all Partners A, B, C, D, E &F will be jointly and severally liable along with the firm for any tax. penalty or other sum payable.
(B) Assessment shall be made on Firm M/s DEF, and all Partners A, B, C, D, E & F will be jointly and severally liable along with the firm for any tax. penalty or other sum payable.
(C) Separate assessment shall be made on Firms according to their period and all Partners A, B, C, D, E & F will be jointly and severally liable along with the firm for any tax. penalty or other sum payable.
(D) Separate assessment shall be made on Firms according to their period and all Partners D, E & F will be jointly and severally liable along with the firm for any tax, penalty, or other sum payable.
Weekend MCQ 13.5: From Firm M/S AB. Mr. A retires. Which among the following is correct about the assessment of the firm and liability of
partners for the previous year 2017-182 (A) Assessment shall be made on Firm M/S AB, and Partners A, and B only will be jointly and severally liable along with the firm for any tax penalty or
another sum payable.
(B) Assessment shall be made on Partner B only, and Partners A & B will be jointly and severally liable along with the firm for any tax penalty or other sum payable.
(C) Assessment shall be made on Firm M/s AB. and Partner B will be jointly and severally liable along with the firm for any tax, penalty, or other sum payable.
(D) Assessment shall be made on Partner B only, and Partner B only will be jointly and severally liable along with the firm for any tax, penalty or
another sum payable.
As one of the best tax advisory services India, we have this post of MCQ is on the provisions relating to the assessment of firms and liabilities of partners under different circumstances.
Answer to MCQ 13.1: D)
Answer to MCQ 13.2: C)
Answer to MCQ 13.3: C)
Answer to MCQ 13.4: B)
Answer to MCQ 13.5: A)
The provisions relating to the assessment of firms and liabilities of partners under different circumstances are discussed and summarised in the following table-
Case Assessment Liabilities
Change in Constitution Section 187-Assessment shall be made
on the firm as constituted at the time of
making assessment.
of firm/(retirement, Section 188 - Assessment shall be made
according to a period of firms remaining in
force L.e.
admission of partner or
change in profit
sharing ratio)
Succession of one firm 1) Predecessor firm shall be assessed up to
the date of succession.
by another firm 2) Successor firm shall be assessed after
the date of succession.
Firm dissolved or Section 189(1)-Assessment shall be made
on the firm as if no such discontinuance or
dissolution had taken place.
business discontinued
Section 188A-All partners who during the previous year were partners shall be jointly & severally kable along with the firm.
Section 188A-All partners who during the previous year were partners shall be jointly & severally liable along with the firm
Section 189(2)-All partners who during the previous year were partners shall be jointly & severally Bable along with the firm.
Predecessor firm shall be assessed up to the date of succession
The successor firm shall be assessed after the date of succession
Based on the above analysis, the correct answer to MCQ 13.5: A) Assessment shall be made on Firm M/s AB, and Partners A, and B only will be jointly and severally liable along with the firm for any tax, penalty, or other sum payable.
(Disclaimer: The objective of the MCQ post is just to discuss the concept. It may happen, by change of facts, the answer may be different. Please do not treat this as a professional opinion you can definitely have your own opinion.)
Sincere Regards
CA Sanjay Kumar Agrawal
Mobile: 9810116321
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