how to create capital through gold
kaidjohar
(Querist) 26 March 2010
This query is : Resolved
sir..my client wat to increase his capital through old gold sale of relative ..suggest me what is procedure and main point for tax planning...
Vineet
(Expert) 26 March 2010
Can the client disclose and prove source of gold by any purchase receipt or wealth tax return. If the source of acquisition is not proved, the sale consideration can be treated as unexplained cash credit/ investment.
Kumar Thadhani
(Expert) 28 March 2010
Yes one can prove it by gift receieved at the time of marriage of his relative.Then if it is acquired or gifted before1-1-1984.AND ASK FOR VALUATION CERTIFICATE from Registered VALUER as on such if it prior to 1-4-1984 to create in your Wealth cOMPUTATION.
kaidjohar
(Querist) 28 March 2010
R sir.If client relative havn`t any proof of gold possess before 1984 but he said that this is recd me from my parents..is this reply is sufficient..
Vineet
(Expert) 30 March 2010
Hi from this angry young man Mr Kaid.
In Income Tax proceedings mere statements do not carry any meaning. You should have sufficient evideneces to prove the source of gold as gift in client's hands.
Nobody makes any hue or cry if such claimed gold jewellery is within reasonable limits say 100-200 gms. Even if the AO treats it as unexplained investment there are chances that appellate authority grants relief in such matters. However appreciate 100-200 gms of gold jewellery is not going to build any substantial capital.
For a larger amount, you certainly need evidence in form of old gift deed, purchase bills, valuation report or wealth tax return.
kaidjohar
(Querist) 30 March 2010
Hello from cool kaidjohar..Realy thankful 2 u 4 stisfactory reply..pls Bless me 4 Ask new quesion and free from confusion..ok bye
kaidjohar
(Querist) 31 March 2010
G M sir..I m back with new confusion..My client deposited Rs.8,000,00/-in cash in CA in 2009-10 for start new business.he was not filled return after 31-03-2007.Can i create cash throgh last three year income and some cash recd from wife after showing income under exempt limit..
Give me rpl as soon as possible..Thanx
Vineet
(Expert) 31 March 2010
Mr Kaif
Your client did not file ROI after 31-3-2007. So I understand his last return was filed for AY 2006-07 and returns for AY 2007-08, 08-09 and 09-10 are pending. You can still file his return for AY 08-09 by end of day today and AY 09-10 a bit later but for AY 2007-08 the matter is barred by time.
Now the question arises, how much income can you show in these returns to explain the source of cash deposited in bank account in current year. For AY 07-08 the exemption limit was Rs 110000, For AY 08-09 Rs 150000 and for AY 09-10 Rs 160000. These miniscule sums have to not only justify the source of huge cash but also his personal expenses for all these years. There is little which remains as explanable.
Please for Gods sake don't involve wife in this cash business. Any cash loan above Rs 20,000/- (including cumulative sums) is violation of section 269SS and penalty is 100% of the loan amount. This will be more than tax on the cash amount and any penaly levied on the same.
The best way is to offer this cash as income of three years AY 08-09 (URGENT), 09-10 and 10-11 by reasonably spreding to get maximum benefit of tax slabs.
kaidjohar
(Querist) 01 April 2010
G M Sir,Thank u for deep reply..still my prob is not solved so pls give me more time.
1)Can i creat Cash Gift from his wife through Tailring income which was not filled return of income of any year.
2)can i do same as above from his Brother.
3)can i show received cash from sals of old gold(Sale bill is available)before cash deposited i the bank a/c.
Thanx...
Vineet
(Expert) 01 April 2010
You are somehow hell bent on explaining the source of cash.
Yes you can show reasonable cash gift from wife, brother and for that matter anybody on this earth provided that person should be able to establish his capacity to grant such gifts. Remember CM of Uttar Pradesh has claimed source of huge cash (Crores) spent by her in properties and parties as cash donations and gifts from her followers.
If you are able to arrange cash sales bills of gold, better you arrange genuine bills from genuine parties for purchase of same gold some 7-8 years back. Thus you will be able to explain the source of this gold. for your reference gold prices have shot more than 300% in last 8-9 years. But in such case your claient will have to pay capital gains tax.
kaidjohar
(Querist) 02 April 2010
thank u vry much 4 give me time and deep suggn.Thanx
