Genuineness of a transaction

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vanita (Querist)
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19 August 2012 an assesse has withdrawn cash from his business books and deposited the same amount of cash in his personal books saving account on the same day.

So,my question is how could the assessee prove the genuineness of this transaction if the amount is big

if in this case the income tax officer considers this amount as an income as the assessee is unable to prove the genuineness of this transaction so can this amount be prevented from being taxed and penalty by going to the appeal as the transaction is true and genuine

please reply as soon as possible

ca binny

ca binny (Expert)
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19 August 2012 the assessee can withdraw the amount in cash as drawings and not expenditure. secondly can show the same amount as cash balance in the personal books and use the same as and when required for household purposes.

vanita

vanita (Querist)
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19 August 2012 So, will the assessing officer take the cash amount transfered from business books to personal books (maintained but not shown) as Undisclosed Income???

If yes, then Will the drawings & depositing of such amount in the same date in the same proprietors other book will be able to get clearence, if we get into an appeal against the assessing officers decision??? Alos, help me about the paper work to be gethered to prove our genuiness in an appeal...

Eagerly waiting for your kind advice / answer...

CA Amit Jaiswal

CA Amit Jaiswal (Expert)
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20 August 2012 No, you are mentioning that the amount was withdrawn and deposited in personal savings A/c. and you are mentioning it as drawings. So, no question of undisclosed income as everything is disclosed.

You should have details of how the amt was spent (if amt is much significant).
Moreover, the proprietor can withdraw from business for personal expenses. So, no need to worry.

Best of Luck.....

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