Demand of 3 .4 crore

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RAKESH (Querist)
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14 July 2021 Sir.I newly joined the company. And in initial stage they have given a income tax case .the case is that they have not filed the itr for f.y 16-17.Dept has repeatedly sent the notice to the proprietor .but due to non awareness of notice received from income tax they didn't respond to that notice .at last dept calculate the tax of 3.5 crore by applying best judgement assessment .now the problem is that they didn't made any record for that period .bcoz they are retailer of haldiram product and all sales are at cash sales.they given two docummt one bank statement where number of cash de post is there .and second one excel sheet where all purchase detail is mentioned.but there is no purchase document physically .pls help me to finalise the case .I am treating all the receipt in bank statement as sales transaction .is this method right or not .

Deepa B

Deepa B (Expert)
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15 July 2021 It's recommended to take some professional assistance in this case. Because with the tax amount mentioned in description, prima facie it looks like a tax audit case.
Treating all receipts as sales is not advisable because transactions are to be treated as per their nature.