Help in B/S of a client for ITR purposes

Tax planning 624 views 4 replies

rakesh Jha

article

30 Points Joined May 2011

Hi all experts...I wish to present before u my case so that u can provide the queries at the earliest....

We have a new client who came to us recently in our office. His old CA convinced him to underbook his sales. His is a articles trading business and has only cash sales. Now he has amassed high amt of untaxed money...lets say 5lac.

The problem is that now he is scared and rightly so...He wants to show this BLACK MOney in his ITR this year. But the biggest problem is that he doesn't want to be penalised for this. So he has asked my boss for some effective tax planning and preparing his B/S in such a way so that the black money is accounted as white...

1) Can u pls advise on some transactions for fulfilling the abovesaid requirements??My boss says we may show the money as capital introduced but again the Dept may ask for source....

Thnx in advance..

Replies (4)

rakesh Jha

article

30 Points Joined May 2011

Pls some one answer...its really urgent..
highly thankful if anyone can answer

rakesh Jha

article

30 Points Joined May 2011

Pls anyone...

Alok Siddapur

Consultant

229 Points Joined February 2010

Show it as purchase of machinery (computer etc) and after a year or so record it as lost due to theft. In this way you can even claim depreciation on computer.

Show the amount as loan from relatives, gift from relatives which are exempt from tax under sec 56.

Show some amount as paid to creditors by recording bogus creditors

U S Sharma

glidor@gmail.com

21063 Points Joined January 2010

Please share the following facts

1) age/s*x/educational qualifications

2) status of family tax , viz father/ mother/ spouse/ HUF .........solvancy and tax status , whether they are tax payer or not

3) his personal skill in any field ( not compulsary to be expert in the field what he is trading now, but other hobbies also)

4) Place of living, i.e rented/owned/owned by parents/ govt accomodation

5) his personal bank pass book entries, prior to business and end of year of business ( i.e during the year addition)/ bank deposits/ other deposits, bank interest etc.

for 5 lacs u dont have to worry, on receipt of the compliance above , a suitable and acceptable balance sheet will emerge