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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

19 October 2011 ONE OF MY CLIENT IN F.Y. 2008-09 WAS DEPOSITING CASH AND THEN WITHDRAW THE SAME CASH FREQUENTLY. DUE TO THIS PRATICE HIS TOTAL CASH DEPOSIT IN WHOLE F.Y . EXCEEDED RS 10.00 LAKHS AND THE CASE WAS SELECTED FOR SCRITINY. NOW THE FACT IS THAT BECAUSE OF HIS REGULAR DEPSOT AND WITHDRAWAL THE LIMIT EXCEEDED BUT THERE WAS NO ACTUAL AMOUNT OF CASH OF RS 10.00 LAKHS.
PLS ADVICE NOW WHAT TO DO AND HOW TO CONVINCE THE ITO FOR THE SAME.PLS GUIDE

Hari Wadhwa

Hari Wadhwa (Expert)
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21 October 2011 Dear Author,

The case can be replied in the favour of assessee easliy & contentions can be placed in the best menner provided it is properly known that : -

1) What is the business of te assessee & why the cash withrwal becomes necessary frequantly?

2) Issues/ questions raised by the AO in this regard in the scrutiny notice.

3) Does the assessee able to explain the source of each cash deposited i'e, it need to be explained to teh AO that the cash withrawl was lying in the books unused & was deposited again in the Bank etc.

If you share some more information based on above points, a better advice can be offred for your case.

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Querist : Anonymous

Querist : Anonymous (Querist)

22 October 2011 sir
assessee is in small kirana business and needs money for purchasing the same.secondly the A O has asked for source of cash deposit in the notice.
also assessee withdraws money from bank and deposit the unused cash in the bank.for this regular deposit and withdrawal the total deposit of cash exceeds Rs 10.00 lakhs.

Hari Wadhwa

Hari Wadhwa (Expert)
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22 October 2011 Dear Author

If the assessee is maintaining the Cash Book & all the unused cash was lying in the Cash Book after spending some cash on purchasing the goods for shop which was later deposited in the Bank, then it can be explained to the AO easily.

You can make a date wise excel sheet also to explain the AO comprehensively clearly showing :
- Cash Withrawl
- Cash used for purchase
- balance amt deposited back to bank account

....provided that you must be able to show the source of each cash deposited which you deposited for the first time.