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(Querist) 20 March 2009 This query is : Resolved 

I had plans to purchase a flat from my cousin. We just did not enter into any formal agreement to sell.He needed funds to finalise a property deal.

I managed certain amount and the amount got deposited in to my account and I in turn gave my cousin 3cheques for the amt.

My friend who helped me cannot disclose the source of the ten.

Now I am applying for Bank loan and disposing my another flat.

I think I shall be subjected to scrutiny. How to deal with that ten...
A V Vishal (Expert) 20 March 2009
Full details in clear words, what is your query?
Sreenivas (Querist) 20 March 2009

I wanted to purchase a flat from my friend A. Mr.A is also purchasing a flat and was in need of funds. I managed some funds(10) from another source. It was deposited into my account in my absence.
forcing me to give Mr.A 3cheques.
Now, I am applying for Bank loan for the flat from friend A.
My friend Mr.X cannot disclose his source. Since I am a Govt Servant, I just want to know the treatment of 10 and how to deal with it.
Sreenivas (Querist) 20 March 2009
I hope that is clear...
A V Vishal (Expert) 20 March 2009
Well Srinivas,

If the ten was deposited in cash, then surely the IT department will get to know about the transaction. However, you mentioned that you are in the process of disposing another property, then ask the purchaser whether he can vouch for the Ten as an advance, arrange to make a direct payment in cash to the friend who has deposited the ten in your account. In worst scenario if the purchaser refuses to vouch then show it as an advance from different persons and on receipt of consideration of sale of your flat draw cash and show repayments in different instalments.T/he so called creditor must be a credible source.
Sreenivas (Querist) 20 March 2009
You mean to say "Loan" from different Persons. In that case I understand more than Rs.20000 as loan in cash, attracts penalty.

The ten was split in two accounts i.e. 5 each into my account and into my wife's account who is working in a nationalised Bank.
A V Vishal (Expert) 20 March 2009
yes the amount has to be below 20,000/- u can make payment on different dates. Payment to a single person cannot exceed 20,000 in a single day. If possible obtain bills for provision of amenities then in such case the amont may exceed 20,000
Sreenivas (Querist) 20 March 2009
Ashok Kumar Garg (Expert) 20 March 2009
Mr Sreenivas, I may be adding some more woes to your worries. Since you are government servant, you have to take permission before entering into agreement for sale or purchase of an immovable property. In case of loan also you have to inform your department. So much for the service part.

The person from whom you took loan is not bound to tell you the source of his funds. You are not required to tell the I.T. Department the source of that person in case he is an existing person , owns up the amount and also affirms that payment to you. If he does not have any legitimate source to show off , but he owns it up in his return and pays tax, there should not be any problem except because it was in cash . That problem can be tackled in two manners- one you shoould have some good and reasonable cause to accept the loan in cash or it should not be loa at all but an advance on capital account or for safe custody or for using it for his purpose itself. The amount can be refunded by cheque or used for his purpose- if there is any.

If it was his outright unaccounted money, then best course of action is that he owns it up and discloses in his return and pays tax and shows that as an advance for some property , some service or in fact for safe custody ( not a loan). If it was for safe custody, it would neither need to be informed to your department nor to the department. But it is all dependent on that person ownign it up and paying rightful taxes. Any more discussion at the forum is undesirable from all angles.
M. PIRAVI PERUMAL (Expert) 20 March 2009
I agree with Mr. Ashok, it will not be right and proper to discuss in Forum. You better personalized discussion on the issue with a lawyer who is expert in taxation.
sanjeev murthy desai (Expert) 21 March 2009
Good sugestion from Mr. Piravi
A. A. JOSE (Expert) 21 March 2009
I endorse above suggestion.
adv. rajeev ( rajoo ) (Expert) 21 March 2009
i do endorse all above suggestion
DON BOSCO Proprietor of DON As (Expert) 25 March 2009
it is a new experince to me.. and i got one more clear idea with the excellant answer of Mr.Ashok Kumar Garg. Thank you sir.
Sreenivas (Querist) 26 March 2009
Got it Friends.
Sreenivas (Querist) 26 March 2009
Hiralal Das (Expert) 04 April 2009
Yes,I agree with my learned friends. Please try to follow their valuable opinions.
Sachin Bhatia (Expert) 04 October 2009
Agreed with Mr. Vishal and also with Mr. Ashok Kumar

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