Transactions
Neeraj Kumar Giri
(Querist) 24 May 2014
This query is : Resolved
Dear Experts, kindly advice me.
1. What is the purpose of opening a current account in Bank?
2. What are the formalities or rule for opening a current account?
3. If anybody does not have any trade license and tactfully doing a huge transaction in that particular Bank without appropriate reason, and transferring amount from his bank to other parties, and receiving huge amount in his Bank account from his debtors in this case his transaction is of rupees 80 Lakhs but he showing just rupees 25 Lakhs in his Income tax return in this point is he violated any law or rules of Income Tax?
4. I just want to know that if he unable to prove the genuineness of the transaction, what the Assessing Officer can do in this particular case of huge transtion?
kindly advice me which section of Income Tax he is violating?
thank you.
Devajyoti Barman
(Expert) 24 May 2014
what is the background facts?
It looks like an academic query.
Neeraj Kumar Giri
(Querist) 24 May 2014
Dear Devajyoti Sir,
Actually the case is one of my friend who is engaged in a business of resale but he did not obtained any Trade License from concerned department and doing business without maintaining any paper such as purchase bill sale bill etc, and he is operating a current account in a Bank and the Transaction of the Bank is about 80 Lakhs and he had submitted his Income Tax Return in ITR 4 by showing Gross Receipt of 25 Lakhs, from that Current account he had transfed huge amount to his creditors and receive huge amount from his debtors, now I would like to know that if he unable to probe the genuineness of the transaction what the Assessing Officer can do in this case, What section of Income Tax can be imposed on him as the case is under scrutiny proceedings .
What to do in this case should I face scrutiny or file wait for X parte order.
Guest
(Expert) 24 May 2014
Your question is quite in a delinked manner.
With reference to your own queries, the following questions arise:
1. In what legal context I.T. or objection from that department you seek information on current account?
2. While this is not a legal query, have you contacted your bank for asking for the procedure to open a current account? If not get appropriate guidance from your banker.
3. This is purely an academic query, better discuss the ral problem and state also, how you are related with this problem?
4. Reply depends upon detail, as desired against point 3 above.
If you have received any notice from the IT department that must be containing reference to the relevant section of IT Act. If not,in this case also, reply depends upon your reply to my question #3 above.
Devajyoti Barman
(Expert) 24 May 2014
yes, better wait till notice from IT department.
Neeraj Kumar Giri
(Querist) 24 May 2014
Dear Sir
IT Department issued a notice u/s 142(1) and asked for Books of accounts.
Guest
(Expert) 24 May 2014
You want help but try to conceal very essential information from the experts. If the IT department has asked for books of accounts, they would also ask for audited accounts/ P&L accounts of your friend, as the transactions of 80 lakhs is not a small amount and far exceed the limits where books of accounts and audit of accounts from a CA are quite necessary.
My another question in addition to the former set of questions --
What type of business with products your friend was undertaking?
ajay sethi
(Expert) 24 May 2014
well advised by dhingraji
Rajendra K Goyal
(Expert) 24 May 2014
Ask your friend to consult a local tax adviser and show him all the documents.
Neeraj Kumar Giri
(Querist) 24 May 2014
Dear Experts,
My question is how far the Assessing Officer can go if no Books of Account or other information produced before the Assessing Officer. Can he add back entire transaction under sale.
Dr J C Vashista
(Expert) 25 May 2014
Q 1. What is the purpose of opening a current account in Bank? and
Q 2. What are the formalities or rule for opening a current account?
Not a legal query, seek guidence from Bank.
Q 3. If anybody does not have any trade license and tactfully doing a huge transaction in that particular Bank without appropriate reason, and transferring amount from his bank to other parties, and receiving huge amount in his Bank account from his debtors in this case his transaction is of rupees 80 Lakhs but he showing just rupees 25 Lakhs in his Income tax return in this point is he violated any law or rules of Income Tax? and
Q 4. I just want to know that if he unable to prove the genuineness of the transaction, what the Assessing Officer can do in this particular case of huge transtion?
Face the wrath of IT authorities.
Consult your C A, pay fees and seek all information, this platform is not meant for such querist.
T. Kalaiselvan, Advocate 
(Expert) 26 May 2014
Instead pf insisting on more replies/opinions to your query, you may better consult a tax consultant who would show you the way to escape the IT liabilities as per the situation in hand.
