Money demonetisation

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raghavendra b (Querist)
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12 December 2017 Dear Madam/Sir,

please clarify me that one of my client a dealer of acc cement and iron and steel, dealer of asian paints. he almost sales in the nature of credit basis 30 days, 60days. he made deposited cash of 1200000/- rupees after money demonetisation. he has declared sales of 1500000/- rupees in the vat return. his cash in hand almost 9th of November month more than 1500000/ rupees. After that he has received notice from income tax department to give explanation about cash deposits. we replied through online e-proceedings. but income tax officer not satisfied of our replies. he calls us to produce books of accounts vat returns, bank statements and every thing.

we have appeared before him books of accounts. he is saying your deposited cash in different dates now almost cash deposits are un authorized income you have pay tax on that. i quetioned him how you thought of all cash deposits are unauthorized income ? he has almost maintained more than 1000000/ rupees his cash balances because he is wholesale dealer.

please tell me if any limitation of regarding cash deposits even the money legally hold by him

regards

CA Amrita Chattopadhyay

CA Amrita Chattopadhyay

(Expert)
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13 December 2017 In case of cash deposits, it is imperative that the Income Tax department will raise questions if the money exceeds certain amount. It is your duty to provide the reconciliation to the Income Tax department and convince them that the cash is legally earned.

raghavendra b

raghavendra b (Querist)
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20 December 2017 Thank your for your reply madam, but i have provided almost perfect source of income. my question is why he asked me that you deposited cash in different dates ? why should you deposit in single day, if you deposit in a single transaction. all cash deposits may legal will assess it.

regards

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