Business Other News 24 Feb 2017 Firms with sudden ri ...

Firms with sudden rise in cash sales under scanner

PTI
Published Feb 24, 2017, 12:29 am IST
Updated Feb 24, 2017, 12:29 am IST
The tax department is closely looking at any business entity showing sudden spurt in cash sales.
On the taxman’s radar are traders and business establishments that have shown sudden rise in cash sales or inventory purchase immediately after November 8 when the government unveiled its decision to demonetise old Rs 500 and Rs 1,000 notes.
 On the taxman’s radar are traders and business establishments that have shown sudden rise in cash sales or inventory purchase immediately after November 8 when the government unveiled its decision to demonetise old Rs 500 and Rs 1,000 notes.

New Delhi: Tightening its scrutiny of cash deposits post note ban, the tax department is closely looking at any business entity showing sudden spurt in cash sales in November and December in a bid to detect possible tax evasion. In every case of abnormal increase in cash sale, the tax department will match the sales and inventory data claimed by any company, enterprise or trading establishment with those of prior months to find out if blackmoney was being camouflaged as business sales, a senior government official said.

On the taxman’s radar are traders and business establishments that have shown sudden rise in cash sales or inventory purchase immediately after November 8 when the government unveiled its decision to demonetise old Rs 500 and Rs 1,000 notes. “There are instances of business entities depositing higher taxes (VAT and excise duty) after claiming a rise in sales or inventories being cleared,” the official said, adding that the centre had allowed use of the junked currency to pay statutory dues in the immediate aftermath of demonetisation.

 

The tax department will verify if the cash transactions shown are in line with the normal business during the given period of a year. For this, taxmen will look into monthly sales summary with break-up of cash and credit sales as well as historic bank statements to identify cases of back-dating of cash or fictitious sales. “The idea is to catch anyone using the garb of a business entity to convert unaccounted cash (blackmoney) to white using the 50-day period provided to deposit holding of old currency in bank accounts,” the official said.

 

Any growth in cash sales during November 9 to December 30, 2016, or any abnormal jump in percentage of cash sales to unidentifiable persons compared to the earlier history is also going to attract I-T glare.

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