04 October 2011
My Client is a Proprietory firm engaged in Trading of Electric goods. During the F Y 2008-2009 , my client purchased a property worth of rs 60 lacs. The sources of fund for purchase of property declared by assessee are as under
1. Loan from Bank 20.00 Lacs 2. Surrender of PPF 6.00 Lacs 3. Deposit from Company 26.00 Lacs 4. Increase in creditors and Net Cash Profit for the year under scrutiny rs 8.00
The Assessing officer has accepted sources from item no 1 to 3 as above. Now he is asking to show documentary evidences of increase in sundry creditors and Net Cash Profit (Accruals) of Rs 8.00 Lacs. Otherwise he wants to add Rs 8.00 Lacs
I can maximum submit confirmation from creditors and ledger accounts of creditors. The transactions of purchases are all geniuine. How to conveniece AO. Is there any case law for this?
And How can one give documentary proofs of Net Cash Profit? Please give expert comment with reference of any case law if available Thanks
05 October 2011
Well the case is a good case...and in this case A.O. has a corredt stand but yes you can surely prove the things on your side for the sources of the funds. The point at which you are hanging on is not just a small point but a wrong point too, and to prove the validity you need to take the help of the books of accounts...and if u are unable to help and find out the sources then you can surely contact us, we would be happy to render you the services on receiveing some books and evidence that we ask for.
CAclubindia
