Deposited more than 10 lacs cash in bank

harepanjee (Querist) 05 March 2015 This query is : Resolved
Hi,

A relative of mine who is a farmer sold his ancestral agriculture land to somebody for 70 lacs, that person asked him to take 20 lacs as sale agreement and 50 lacs in cash, this relative with having no knowledge what cash means, deposited the entire 50 lacs in his saving account and later distributed it among his children and kept some for himself. Now some friend of him having done the same thing received an IT notice asking about the source of the cash and to file return. Now this relative of mine is in a fix what to do, please help, how to show the source of this 50 lacs that was deposited in cash within a two-day period in 2012

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SAINATH DEVALLA (Expert) 05 March 2015
No bank will accept 50 lacs deposit without obtaining the source and reason.If the sale transaction is done as per the rules,the same thing can be mentioned with valid documents.Actually the buyer must have given that amount from hsi black money resources.

Guest (Expert) 05 March 2015
Did your farmer relative have PAN No.?

Dr J C Vashista (Expert) 06 March 2015
The bank shall never accept Rs. 50 lakh cash deposit without PAN No. and mentioning PAN No. is obvious to invite attention of IT Department and necessary action as required by law.

ajay sethi (Expert) 06 March 2015
agree with experts

Rajendra K Goyal (Expert) 06 March 2015
Agree with the experts.

Sudhir Kumar, Advocate (Expert) 08 March 2015
since it is not agricultural income (sale of land) he may have to pay file return and tax may come to be Nil with this amount.

As appearing from the facts disclosed so far.

T. Kalaiselvan, Advocate (Expert) 08 March 2015
Due taxes are to be paid while disclosing the source of income, better have a consultation with the local tax consultant and proceed as per his advise.

harepanjee (Querist) 09 March 2015
the problem is how to show the source of this 50 lacs cash;
Because even if he discloses it, the buyer who has paid it will never admit it was his money.

Alternatively, can he show it as cash loan from say 5-10 relatives and make agreements with them on paper and keep the papers with him. Or whatever new suggestion comes from you all...

SAINATH DEVALLA (Expert) 09 March 2015
Two points are involved here (1) If the farmer says that he has received the money by sale of land, he has to prove that he received the entire amount by way of cash.But the amount mentioned in the sale agreement would be very much less.
(2) The buyer would not have shown the amount in any of his books of accounts or he may have shown only the amount mentioned in the sale document.He will never admit that he has paid that much amount.Hence it is the duty of the seller to prove the source of that much amount or pay taxes accordingly.

Sudhir Kumar, Advocate (Expert) 09 March 2015
"Alternatively, can he show it as cash loan from say 5-10 relatives and make agreements with them on paper and keep the papers with him"

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