Cash Deposit in One's Account

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

20 November 2010 Under CASS lots of cases are coming these days of salaried individuals or insurance agents under which one or the other person had deposited in bank accounts of the that individual and after wards made a DD for insurance companies for making insurance policies. What could be possible answer to Dept. queries as that money belongs to others and not earned by individual. What could be the possible docs one should collect to proof that money deposited in one's account does not pertains to him.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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20 November 2010 It is advised by the insurance companies that the agent should not issue his cheques for paying the premium of his clients. Cheques of clients should directly be deposited with the Insurance Company.
If the Individual i.e. the person Purchasing DD for making others' policies, can prove or produce before the ITO that he is an Insurance Agent and -
1.Cash so deposited by him is in respect to the premium payable by his clients, which he has received for depositing with the company, and as a matter of safety he has made DDs.
2. The photocopy of receipts issued by the insurance co. against the DD.
3. If DD No etc not mentioned on the receipt than request the branch manager to issue a certificate showing the details of DDs Received and manner in which the amount is settled towards Premium.

4. Obtain confirmation letters from client of making a payment in cash to you towards paying their premiums.

I think, the ITO will have to rely upon these evidences.

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