Cash in hand.

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

11 March 2015 Experts please tell me that I am an accountant and prepared books of accounts in tally 9 of a retail business. But when I print out the Cash Book in daily format I found that the closing cash in hand of every day is more than 5 lakhs. My question is :-
1) Due to nature of business the cash in hand is more can ITO raise the question why the cash is lying in hand not in bank.
2) Is there any obligations or threshold limit of keeping cash in hand in INCOME TAX ACT/RULES.
3) Is yes please tell me under which section/rules it is mandatory.
4) How to justify the cash in hand is genuine.
Thank you in advance.

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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12 March 2015 1. yes very much likely to raise this.

2.no but its always suspicious for ito that why such high amount kept in cash everyday

3.no

4.very difficult to convince for same

Querist : Anonymous

Querist : Anonymous (Querist)

12 March 2015 Dear Experts thanks but i have one question regarding your advice please tell me, as per your reply that ITO can be suspicious about the cash in hand, my plea is that due to nature of business which is whole sale under which such amount of cash is natural to be in hand.
1) What can ITO do if he feel that the cash in hand is bogus, ITO have power to refuse or reject the books of accounts?
2) Under which circumstances he can refuse or reject the books of accounts, merely on the ground of cash in hand, can he refuse the books?
3) Please tell me in practical practise What is CASH FLOW AND FUND FLOW STATEMENT.
Thank You MR. SAMPAT SIR.

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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13 March 2015 some amount is different from rs 5 lakhs in cash....so i said it can be matter of suspicion.

he might ask u many question and explainations for which if he is satisfied then he may issue notice of concealment of income, undisclosure of income etc.

under situatin of non satisfactory or sufficient supporting of various transactions in cash he can reject books.

cash flow means where exactly in fy the money have gone out and in.

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