Hello Team,
One of my relative Mother & Son is doing business from last 13 years. They are regularly filing ITR's on the Mother's name. How ever, they used to withdraw the money on each and every basis with out keeping the balance in the bank account as they wanted to start constructing house from a while which till date not happend.
1. The Net profit income as regularly Filed and shown in ITR but withdrawn and kept as cash
2. The staff salaries (her and her son) income also they used with draw as that is their monthly survival income, as it was never crossed 2 lakhs per year, they have not filed any ITR on this amount
3. Sadly, The whole cash in hand component was not shown in the P&L , Ledger statements was shown very minimal i.e 10k 1o 12K every year.
With this currency demonitization, now they are sitting on pile of cash around 20 - 25 lakhs which they have cumilated genuinely from previous years but never deposited in any bank account ( Which is the sadest part)
They have proof for last 12 years of ITR and Bank with drawn statements as well as P&L statements for all these years.
Concluding Ave income generated was about 35Lakhs from the beginning of the business and cash at hand is about 22 lakhs as their monthly expense of typically 10k - 11k per month
Can they now deposit this 22 lakhs( 15lakhs in ITR filed account + 7 laks non ITR Filed account) amount on their accounts ? I repeat The source of income is genuine but never deposited back in bank( sadly)
Please advice.
CAclubindia
