Story of a Karnataka-based farmer's short stint in F&O that landed him in trouble with the taxman
1. Traded in F&O in FY14
a. Made a loss of ₹26 lakh.
b. Did not report F&O in ITR as no profits to show.
2. 2021
a. Case opened for reassessment by the IT department.
3. 2022
a. The IT department sent a notice asking for clarification on high-value transactions against his PAN.
b. Since he didn't check his emails, he missed the notice.
4. On not getting a response:
a. The IT department passed an ex-parte order, treating ₹69 crore (sales + purchase amount) as income.
5. May 2023
a. The IT department issued a demand order of ₹68 crore, including:
- Tax on income.
- Interest from FY14 onwards.
- Penalties.
b. The notice was sent to him, but he didn't see it because he didn’t check his email.
6. December 2024
a. IT department froze his bank account.
7. He filed an appeal to dispose of the tax demand.
a. However, he can't get a stay on the tax demand because:
- 20% of the tax amount was required to be deposited upfront.
- He couldn't afford the deposit.
8. Pending case risks:
a. Other assets may be attached for tax recovery until the case is resolved.
9. Hopeful outcome:
a. The tax demand may be disposed of.
b. He will still pay at least ₹10,000 penalty.
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