ITR
Summons about large cash deposits or property deals
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Facts
Summonses about cash deposits or property deals usually ask you to explain the source of money. The answer rests on documents that link the cash or funds to income already declared or to a genuine source.
Provisions and law
- Sec 131, Income-tax Act 1961 (now Sec 246, Income-tax Act 2025)Officers have civil court powers to summon, examine on oath and call for books and documents
- Sec 270A, Income-tax Act 1961 (now Sec 439, Income-tax Act 2025)Penalty for under-reporting (50% of tax) or misreporting (200% of tax) of income
Analysis
Build a simple source map for each large amount. Example: ₹12 lakh cash deposited in November 2023; ₹7 lakh from shop sales recorded in the cash book and ₹5 lakh from sale of old gold with a jeweller's bill. Bring the ITR, books and bills. Where the source cannot be shown, unexplained money is taxed at high rates and penalty can follow, so take advice before attending.
Conclusion
- List each large deposit or payment with date and amount
- Match each to a source: sales, withdrawals, gifts, loans, asset sales
- Collect bills, books, gift deeds and loan papers
- Prepare a one page summary for the officer
- Attend with your CA
A Savvy can do this for you
Summons, Sec 131 (now 246)
₹4,999
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