Advance for tour in cash / cheque

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

21 September 2011 Dear Sir,
My client is having a Travel Agency Business , a pvt ltd company.

They generally receive advance from party for Group Tour booking both Tour/Tickets/Transfers/meals etc in cash or by cheque 3-6 months in advance
They deposit the same in bank & sometimes in keep the cash balance in cash book.
If there is any cancellation of the tour program advance is refunded to the party by cash or chq (as per party requirement).They withdraw cash from bank refund the same.
The basic question is if they receive advance in cash from the Group Head (one Person who brings in the Business) in excess of Rs. 20000/- per head (with Name List only of the Pax)and then return to the same person on cancellation of tour.Does they have to give the names of all the group people with addresses.Since Some Hotel Passengers gives advance it is not practical to have all the names & addresses of the group passengers.
Now if they receive a notice from Income Tax where it asks that you have deposited cash in excess f Rs. 10lacs in your current bank account.Actually it is advance from party and refund to party in cash.
How should I explain the same and Will Income Tax Officer get Convinced ?
Pls advise
Thanks

Rajagopalakrishnan R

Rajagopalakrishnan R (Expert)
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21 September 2011 First, cash in excess of Rs. 10 lakhs deposited in bank is applicable only to a Savings account and not a current or OD account.
Second, Whatever advances received and refunded either in cash or in cheque can be duly recorded in the books of accounts regularly maintained . Then there is no need for a separate explanation for the amounts received /refunded. If group bookin is made without names, it is atleaset better to get the name and address of the group leader or the Agent who makes the booking

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