Applicability of incometax provisions

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Padmanabha Rao (Querist)
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24 November 2012 One of the person doing business in purchase and sale of gold, he purchase pure gold for Rs.7,00,000/- in the market i.e in jewelery shop by paying cash and taken two bills each of Rs.3,50,000/-.
What are the provisions are applicable for both purchaser and seller. Pl. explain. Thank you.

V K Bajaj

V K Bajaj (Expert)
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25 November 2012 It is not a complete question.

Provision for what please?

Simply purchase does not attract any provision.

You could be asked to explain as under which circumstances you purchased by Cash and not through banking channel i.e. by cheque.

CA VISHNU GAVKARE

CA VISHNU GAVKARE (Expert)
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26 November 2012 Unless it falls under exceptions under rule 6dd it will be disallowed under sec 40a(iii). Revenue expenditure in cash.

CA Jeen paul

CA Jeen paul (Expert)
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03 December 2012 for purchaser it is normal purchase but it is not from a registered dealer the purchase will attract purchase tax under commercial taxes and of course rule 6dd and disallowance for payment of cash for expenses inexcess of Rs.20000/- in a day.

for seller normal sales tax will be applicable if not opted for compounding