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25 November 2010 Theres a query ....... a person sold diamond for 3 lakh .he got payment thru cheque ..but he showed dat he sold the diamond for 2 lakhs only ..now he want to do comply wid his tax liability on dat 1 lakh rs. which he dint mentioned .......... the situation is dat he dont want to reveal this one lakh profit to h...is personal CA..his CA has all his details like his PAN NO. etc.
He want to pay tax on dat 1 lakh rs. but dont want that his CA shud cm 2 know this !!!!!!
tell me is there any solution to this problem?
Can he pay tax thru his spouse or any relative's account? or any other way which u think is suitable in this situation?

CA.Madhusudan B.P.

CA.Madhusudan B.P. (Expert)
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26 November 2010 Lovely,

What is the fun in not reveling to his CA & he is ready to pay tax on Rs1 lakh ?
When he is submitting all the details like bank account etc., CA would have noticed that Rs.3 laksh has come to his account & could have asked for......

This is a case of Capital gain.
had the Capital gain declared in his return of income ? If Yes, then sale consideration shall be Rs 300000/- but taken at Rs 200000/- if that is case, the balance 100000/- becomes unaccounted money, he cannot offer for tax in any other financial year other that the year of sale.Nor he can show the income in any other name.
Hope it is clarified.

Guest

Guest (Querist)

26 November 2010 thanks sir for replying ...
i was in same confused state .the person who called me regarding this matter dint clarified many points !!!!!!!!!
wat i understood is : the person & his CA were partners in dat diamond's profit!!! n the person may be wanted to conceal this one lakh profit from his CA........... since his CA has all his details (Bank account also) , His Ca will Surely cm to know the Transaction of 3 lakh Rs.

Now the point is why he want to Pay tax on dat one lakh ?
the thing is the 3rd person who bought the diamond from him is a jweller n he has been raided by IT department .. The person who called me has a doubt in his mind dat if IT department will do cross checking then he can be questioned that y he paid tax on jus 2 lakh ? thats y he want to pay tax on that one lakh so that he can escape from any negative consequence of IT department!!!!!!!!!

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CA.Madhusudan B.P.

CA.Madhusudan B.P. (Expert)
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26 November 2010 He cannot escape simply now by agreeing or payment of income tax. He has to face the consequences,plrefer the provisons of Sec 158BA incase of search & undisclosed income
rax rates being 60% & normal provisons of INcome tax actdo not apply, these are special provisions & overrides the other provision of IT act.

If both are under the same juridiction of ITO, then the person raided may also comes to your client OR if jurisdiction differs then ITO may intimate to the concerned ITO of yout client, who may initiate the sameprovisions of IT.

http://law.incometaxindia.gov.in/DIT/File_opener.aspx?page=ITAC&schT=&csId=6a543f55-e635-45e0-9deb-cf2d3d32f81d&rdb=sec&yr=75996b99-a798-4098-bca8-e66ee23fe426&sec=158&sch=&title=Taxmann - Direct Tax Laws

The rates of tax is @60% as per Sec 113.

http://law.incometaxindia.gov.in/DIT/File_opener.aspx?page=ITAC&schT=&csId=6a543f55-e635-45e0-9deb-cf2d3d32f81d&rdb=sec&yr=75996b99-a798-4098-bca8-e66ee23fe426&sec=158&sch=&title=Taxmann - Direct Tax Laws

Guest

Guest (Querist)

26 November 2010 Thank you so much sir for ur valuable Response!!!!!!!!!!!!!
Have informed thatperson about all the consequences he may face as per ur views !!!!!!!
TYhanx once again!!!!!!!!!