Just have a case for one friend. He was doing an agency business. As such since he was just an agent, he need not have any receipts and payments. But due to credit terms he had to discount cheques and get cash, which he used for business payments till he got payments from the party. Thsi cash he used to deposit in his savings account and release the payments to parties.
Now he made a mistake of doing all these transactions in his savings account rather than current account. As per rule, since transactions exceeded 10 lakhs, his bank had to send his details to Income txa department.
The officer wants to add all receipts (visible in bank statement) as income, but at the same time does not want to consider payments as expenses. Can he go ahead assuming this and take all receipts as income?
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