Answer

1. F

   Facts

   Cash deposits by a business can be explained from recorded sales. The officer will compare deposits with turnover in your return and books. Gaps may be treated as unexplained.

2. P

   Provisions and law

   • Sec 148A (now Sec 281)Before a Sec 148 notice, the officer must share the information, give a show cause notice and pass a reasoned order
   • Sec 68 (now Sec 102)Unexplained cash credits in books can be taxed as income
   • Sec 44AD (now Sec 58)Presumptive income of 6% or 8% of turnover for eligible small businesses
3. A

   Analysis

   If your return shows turnover of ₹1.2 crore with ₹30 lakh received in cash, the deposits fit the business. Attach the cash book, sales register and GST returns, and show that the deposits were part of reported sales. Under presumptive tax under Sec 44AD you may not keep detailed books, but sales records still help. Where some deposits came from loans or sale of assets, document those too.

4. C

   Conclusion

   1. 1Match cash deposits with sales in the books.
   2. 2Attach GST returns and the return's turnover figure.
   3. 3Explain non sales deposits with documents.
   4. 4Reply within the date given.

General guidance from TaxSavvy’s library of money processes. Laws change; your Savvy confirms the answer on your exact case before anything is filed.