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Reply to cash deposit with bank

Onkar (Self Employed) (111 Points)

01 February 2017

Dear All,

Today one of my friend received a notice / intimation from IT department for Cash deposit in accounts from 09.11.16 to 30.12.16. Actually he has recharge business, for that he deposit recharge amount in cash and transfer amounts to recharge company throungh its accounts.( its current accounts.) the total amount transacted through this period is around 3.5 lakh out of which approximately 1 lack in SBN. that too in early 2-3 deposits.

Now he has to file reply to IT department for such deposit. So what he has to state in that reply and how to submit it.

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5 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (177741 Points)
Replied 02 February 2017

Before replying in any haphazard way, do some home work like cash flow statement, payments actually made to recharge company, bills pending, other loans/gifts etc. The department is going to verify the facts, and take further action. If satisfied, may drop it also.

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Onkar (Self Employed) (111 Points)
Replied 02 February 2017

Thanks a lot Sir,

Yes sir, the fact is out of cash deposit in that period in bank, round about 1 lakh is of its own pocket ( he has not deposited any mony in that period in his any other account too & out of that too around 50 thousand is in SBN ) and remaining amount which is generated from recharge business is transfered to recharge company. and of that amount he has receipt from company too. But as we all knoow recahrge is not single person business, there are so many customers who made recharges in those days. So if the question is ask from whom you received such cash its quite difficult to show the person with their PAN no. ( as ask on income tax e-fiiling site ) So what to do in that case.

Please give your valuable views on it.

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (177741 Points)
Replied 02 February 2017


	........... remaining amount which is generated from recharge business is transfered to recharge company. and of that amount he has receipt from company too. But as we all knoow recahrge is not single person business, there are so many customers who made recharges in those days. So if the question is ask from whom you received such cash its quite difficult to show the person with their PAN no. ( as ask on income tax e-fiiling site ) So what to do in that case.

You will not be asked to get all such PANs, as its a retail business, and in your case verification can easily be available from the telecom company's statement of recharge done for that period.

One option in your reply can be --- Cash out of earlier income or savings

My suggestion was only to keep things ready for future counter-queries, if any.

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Onkar (Self Employed) (111 Points)
Replied 02 February 2017

Thanks a lot sir,

I think the question is ask only becasue of the that cash depositing trend was not in previous years. But actually business is start in this financial year only. And that accounts too opened in this periods only. before that, that transfer entries generates from other account which is not in use since Nov 16.

And while talking about that cash out issue, can we claim, that amount is generated from last months recharge purchase as total of recharge purchase from Oct-Dec 16 is more than cash deposit in 09 Nov to 30 Dec 16.