09 December 2009
hi, i have just received an IT query regarding my fathers IT returns for 2006-2007. My father passed away in june 2008.
basically d letter says dat it needs a copy of the IT return filed and bank account statements for the given period.
It goes on to say the we are show caused to show why an amount of Rs.600,000 paid for purchases of mutual fund units and investments in shares worth 19,98,760 during the year shud not be treated as income from undisclosed sources and be added back to the taxable income?
It has also attached a copy for these share transactions.
I think my dad must have done some intra-day trading for a couple of days and that is what is showing up at 19,98,760.
how should i go about this? is intraday trading liable for IT ?
09 December 2009
The facts of the case are not clear. Whether intra day results (i.e. profit or loss) has been shown in the return? If so; then the intra-day trading does not come under purview of sale-purchase as there is no delivery.
You should trust only what is there on the face of documents.
If you can prove the source of your investment and the transactions; you can answer to the show cause notice.
Services of expert are necessary. You should immediate contact a reputed Income Tax Expert otherwise you might be in trouble for certain lakhs of rupees demand from the income-tax department resulting into unnecessary litigation for years.
CAclubindia
