tax
akash
(Querist) 08 June 2010
This query is : Resolved
sir,
what could be the tax liability if the IT Department on a raid in individual house finds gold, say Rs 50 lacs and Cash, say Rs 50 lacs and the same has not been disclosed to IT Department at all.
Jagmohan Rawat
(Expert) 09 June 2010
u/s 69A if the assessee is not able to explain the nature and source of acquisition of such unrecorded money or gold or the explainatin given is not substantiated or is not satisfactory then such money or gold shall considered as his income for the year and the same will be liable to tax. Further assessee will liable to penalty u/s 171(1)(c) which may be 100% to 300% of the amount of tax on such income. Moreover assessee will be assessed for the last six years and for the year of raid. Besides the department takes the case of such assessee under compulsory assessment for a few coming years. Surely no assessee would like to fall in such situation.
Surrender K Singal
(Expert) 09 June 2010
Penalty may be u/s 271(1)(c); Provision of surrendering such undisclosed income is generally suggested by the raiding IT officials; The assessee could also plan income to be surrendered for assessment in various previous years for such unaccounted wealth to escape higher tax burden in one Asstt. year !
AMIT BAJAJ ADVOCATE
(Expert) 09 June 2010
Full facts are needed to suggest anything on this matter. Assessment of tax liablity in such cases much depends upon the facts of every case and the credibility of evidences found during search or survey.
However would like to suggest one important thing here, If the detected income is declared as the income of previous years regarding which income tax return has been filed already then it may attract penal action u/s 271(1)(c).
If its declared as the income of current year then it will not attract section 271(1)(c) since no concealment of current year's income can be esteblished since no return is being filed for current year, in such case only interest can be levied.
If any other member of the assessee's family is an earning hand such fact should be disclosed to the authorities and also the gold or cash if belong to some lady in the family as her stri-dhan such as which she got from her marriage, should also be brought to the notice of the authorities.
While surrendering any income its my personal advice out of my experience whatever i have, that you should get it written in your surrundering statement that you are making surrunder for mental peace and on the condition of non leving of any penalty on such surrunder. in my view in such case no penal action will be initiated by the deptt u/s 271(1)(c).
Vineet
(Expert) 11 June 2010
After the insertion of new explanation 5A below section 271(1) wef 1-6-2007, life has become easier in such matters. Simply accept the source of such cash and bullion as current years income and flie return on due date after paying due advance tax and regular tax at applicable rate.
No penalty is leviable in such case.
Under earlier provision (explanation 5), the assessee had to DISCLOSE the same in statement recorded u/s 132(4) to escape penalty, however conditional admissions with addig jargons like mental peace or avoid litigation has never helped any assessee if he does not have any legitimate explanation or the income under consideration is debatable one.
