survy implication on undisclosed bank account

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This query is : Resolved

UMESH RAVANI (Querist)

04 December 2008 Please tell me about the implication/tax liabiity of undiclosed bank account found in survey. how tax will be calculated as per the law on this bank accounts transaction. each transaction credit and debit will be considered or net balance at the year end on this account will be added. or the maximum balance at any point of time during the year will be added? please guide me with supporting case law if any or reference of books.

thanks,

Taxguy

Taxguy (Expert)

04 December 2008 They will first ask you to explain the transaction if they are directly or indirectly mentioned in the books. If they donot, then they may take the peak credit from the transaction for the purpose of addition.

Late CA Sampat Jain

Late CA Sampat Jain (Expert)

05 December 2008 the theory of peak presumes rotation of funds withdrawn from bank into the bank account again............if you have given loan from the bank and not yet repaid that withdrawal is not available for rotation........purchase payments are available on the assumption that came back as sales and so on

TAKE CARE OF THIS ASPECT ALSO BEFORE ARGUING IN FAVOUR OF PEAK

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