Payment of demand by ito before filing appeal

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

15 February 2014 Dear Sir,
Thanks for all reply made by you to clear my doubts. Sir today I want to know about a case that is here below :
1. One Assessee carrying on a business of Mobile Shop and status of business was sole proprietor till A.Y.2011-2012, and due to unawareness he made a inadvertent mistake that he made payments to his creditors in cash of Rs.18000/- twice in a day in different receipt voucher. But now he realized that the mistake of payment made earlier can be a questioned before law. So, now the incident had been taken place, how to clarify that it was done by unawareness before ITO, is there any way to get out of this problem.
2. After that from A.Y.2012-2013, he converted his business into partnership firm by introducing his two new partners and he converted with the same closing stock as on 31-03-2011 and all liabilities, should closing stock will be subject to capital gain or not, because ITO has call him for inquiry before Assessment and asked him several question about the expenses shown in his Audited Profit & Loss A/c. and making his view that his expenses have been shown in excess,but the Assessee contented that he can give the all evidence of his indirect expenses which has been shown in P/L Account. Can ITO have power to refuse the material facts & evidence produced before him.
3. Now if ITO on conjecture and surmise made up his mind that there is huge amount of tax has been escaped and made an order, that he is not satisfied by the submission produced before him by the Assessee and made an order of large amount of tax and interest to pay, is it necessary to pay the demand before filling appeal before CIT Appeal.

Sir please clear the doubts, I Shall be ever grateful to you.

CA Sanjeev Kr Jain

CA Sanjeev Kr Jain (Expert)
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17 February 2014 AO can not compel to pay tax demand before finalisation of appeal

for earlier matter get aquintence with AO

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