My case was selected for scrutiny for the AY 2011-12.
The primary issues were transfer of funds from my father (from his two accounts) to me. Another issue was my father paying a cash amount to the car showroom for our car purchase. There was a single transaction from my mother to me.
There is no discrepancy in ITR or rrgular tax payment during the AY. We have submitted credit worthiness of my father (retirement benefit documents). Therefore source of fund is clear. However, one of the two account from which money was transfered was closed long back and no bank statements are available. Also, since he stays in a different place, he could not issue multi city cheque during car purchase. So we have shown bank account statement showing cash withdrawls from his account during the date of car purchase. ITO has also asked to produce him. But it was not possible since he is staying away and is a senior citizens aged 65 and it's difficult for him to travel on a two day notice. Bank statement of mother showing the tranfer entry has been submitted. However, nothing was asked about mother's credit worthiness in the show-cause notice for creditworthyness.
I have since then received assessment order which is full of factual errors and miscalculation. The AO has added the transfer from mother, cash payment to car agency and transfer from closed bank account as income and issued demand notice u/s 156. Also he has initiated penalty proceedings.
I will anyways appeal to CIT. My question to all of you is following
1. What are the recourses in the event of non availability of bank statements? (I have provided bank account number though)
2. My mother is housewife and the amount she accumulated from long term saving over many years. So can they question her creditworthyness?
3. How can they single handedly suspect the cash payment to car agency since we have enough proof that the amount was withdrwan using ATM of a branch near to my house.
Your suggestion will be really helpful.
CAclubindia
