• IT notice 148A , Dept states their Insight data shows sale of crypto currency

IT notice 148A , Dept states their Insight data shows sale of crypto currency in 2017-18

I used 2 portal to trade crypto in 2017-18 where i incurred losses in trading but unfortunately i didn't download the trading transactions as I had no idea that even if you are in loss you need to show that in IT returns and didn't used any CA back then and both trading websites got permanent shutdown in 2018 & 2019.

Now, IT sent notice that Sale of Crypto worth 1.22Cr happened in 2017-18 and i showed them the bank statement which was the only proof where it showed how much i deposited and withdrew that year which was a loss of 9L approx and Max i deposited for trading was 10L . 

But IT dept is not accepting my reasoning and insists their Insight data is correct but is not showing me where they get that data from .

What can I do to counter IT dept since I cannot share data due to websites/companies being shut down
Asked 11 months ago in Taxation

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8 Answers


Income tax department has been proactively pursuing crypto investors recently and  if your reply to their 148 notice is  not found satisfactory, a detailed inquiry will be conducted under section 148 and the amount of tax evaded will be levied at  77% along with a 10% penalty and additional interest.

Also, Income tax has taken either of the following stand :  

1) If the taxpayer has transferred the initial amount invested in the crypto wallet from the bank and has paid tax on the amount in the bank, then the investment will not be taxed again.


2) If there is a profit from the purchase and sale of crypto currency, then it will have to be taxed at 30% and if there is a loss, then this loss will not be set off.


3) If the crypto currency is sold after holding it for three years, then it will be taxed at 20% and it will be considered as capital gains.


4) So, in your case, since you have your bank statement reflecting non realisation of profits by you and whereas  IT department is claiming that you have derived 1.22 crore profit, it is recommended that you either approach a good chartered accountant or a lawyer and use their good offices to contest the claim of IT Department. 

Hope this information is useful. 

Rajgopalan Sripathi
Advocate, Hyderabad
2170 Answers
394 Consultations

5.0 on 5.0

You must consult a local CA and reply to notice 


you are entitled to produce documentary evidence that you have sold crypto currency of Rs 1.32 cr 


In your reply enclose bank statements which refer to total transactions done by you 

Ajay Sethi
Advocate, Mumbai
90341 Answers
6612 Consultations

5.0 on 5.0

The principle best available proof is applicable here. As the website is closed you can produce any data. In the circumstances bank statement of accounts is best proof. File an appeal  to Commissioner and thereafter to the appellate tribunal with proof of  closure of websites.

Ravi Shinde
Advocate, Hyderabad
3605 Answers
42 Consultations

5.0 on 5.0

If you have received the notice demanding show cause to the allegations leveled against you in the notice, you can issue a reply notice denying their allegations and attach supporting documents to support your denial.

You may consult your auditor and prepare the documentary evidences to prove the loss and also the reason for not filing ITR on that assessment year.

T Kalaiselvan
Advocate, Vellore
80511 Answers
1729 Consultations

5.0 on 5.0

Reply to notice and counter the same by taking legal steps

Prashant Nayak
Advocate, Mumbai
28979 Answers
109 Consultations

4.1 on 5.0

you are entitled to the insider data of the IT on basis of which the department claims that you sold crypto and made profits

if the department does not accede to your request then you can appeal to the higher officer and ultimately approach the HC by filing a writ petition

the IT department must obviously show to the assessee on what basis they have laid their claim

just by saying that they have certain insider data they cannot hold the assessee to ransom and charge him to tax

Yusuf Rampurawala
Advocate, Mumbai. E: adv.yusuf.rampurawala@gmail.com
7110 Answers
79 Consultations

5.0 on 5.0

Hire a good CA and let him handle it right now. 

Abhilasha Wanmali
Advocate, Nagpur
1022 Answers
1 Consultation

4.8 on 5.0

Dear Client,

In India, there are no specific guidelines on the taxation of cryptocurrency in the Income-Tax Act, 1961. But taxpayers need to report transactions if they have invested in cryptocurrencies and gained from those investments and as per the facts provided by you, you have not made any gain so you will not have to pay but as per the new guidelines now the TDS is deducted upon the entire crypto transaction value even if one makes a loss. 

Thank You

Anik Miu
Advocate, Bangalore
6092 Answers
66 Consultations

4.9 on 5.0

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