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Income Taxation of Undisclosed Sources, 2017

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Author(s)

Avadhesh Ojha, Nisha Bhandari

Publisher

Tax Publisher

ISBN

Edition

2017

Pages | Format

Approx. Product Size

Note : The book "Income Taxation of Undisclosed Sources, 2017" contains 70 chapters.

Preface

Tax and tax evasion both go almost parallel. The amount saved by evading tax goes to constitute black money and the same is usually spent in some way or the other most likely as wasteful expenditure. Such unaccounted income may also be brought into the main stream of business in form of credits in the books like loans from third parties, advances from customers, receipt of gift, etc. The unaccounted money and tax evasion, seriously erode the foundations of the equity concept of taxation. Together they have the effect of shifting greater burden to the honest taxpayers which results in economic disorder such as inequality in the distribution of wealth. In order to curb such practices and to avoid losses to revenue, certain specific provisions as in sections 68, 69, 69A, 69B, 69C, 69D have been incorporated in the Income Tax Act, 1961. Earlier on there was no specific provision to tax such deemed incomes, however the Finance Act, 2012 has inserted section 115BBE with effect from assessment year 2013-14 to tax the cash credits, unexplained money, investment, expenditure, etc., which are deemed as income under sections 68 to 69D, at the flat rate of 30 per cent.

The present government is very keen to eliminate black money prevalent in our economy and for this purpose it has taken several steps. One of the most surprising and bold steps was taken on 8-11-2016 to demonetise the high denomination notes Rs. 500 and Rs. 1,000 with immediate effect. As a consequence, people started rushing banks to deposit huge cash lying with them. Apart from depositing cash in bank accounts, several other measures had also been adopted to consume idle cash say purchase of gold, jewellery, investment in land or building investment in shell companies etc. It was believed at that time, that an assessee can include such amount in his total income returned in ITR for assessment year 2017-18 and pay tax voluntarily thereon without attracting penalty, prosecution, etc. In order to plug this loophole and to ensure that defrauding assessees are subject to tax at a higher rate and stringent penalty imposed, the Taxation Laws (Second Amendment) Act, 2016 has been passed. Accordingly section 115BBE has been substituted to provide higher rate of tax on undisclosed income if any found. Section 271AAB has been amended and a new section 271AAC has been inserted w.e.f. assessment year 2017-18 to levy penalty on such undisclosed income. The Taxation Laws (Second Amendment) Act, 2016 has also introduced a scheme namely, Taxation and Investment Regime for Pradhan Mintri Garib Kalyan Yojana, 2016, to provide an opportunity to the tax evaders to come clean on payment of taxes and to generate additional revenue for government to be utilised for welfare activities and also for the use of funds in the country’s economy.

The present book aims at discussing Income Taxation of Cash Credits Unexplained Investment, Unexplained money, investment not duly disclosed, unexplained expenditure and amount borrowed or repaid on Hundi, specially in wake of demonetisation. The scheme of presentation of the subject matter is as under --

Section A	:	Taxation of Income From Undisclosed Sources--Post Demonetisation [Sections 68 to 69D, 115BBE, 271AAC & 271AAB]
Section B	:	Cash Credits [Section 68]
Section C	:	Unexplained Investment [Section 69]
Section D	:	Unexplained Money, Jewellery, Etc. [Section 69A]
Section E	:	Amount of investments, etc., not Fully Disclosed in Books of Accounts [Section 69B]
Section F	:	Unexplained Expenditure [Section 69C]
Section G	:	Amount Borrowed or Repaid on Hundi [Section 69D]

This entire book has been devised with a view to providing a thorough and analytical study of the related provisions which are generally sought to be invoked by tax authorities while making assessment in pursuant to a search or survey or at the time of completing a scrutiny assessment under the Income Tax Act, 1961. For the purpose of completing assessment for the assessment year 2017-18 these provisions have became all the more important and relevant due to demonetisation consequences. The present book incorporates the latest amendments brought about by the Taxation Laws (Second Amendment) Act, 2016 as well as by the Finance Act, 2017.

Apart from incorporating the statutory amendments all important judicial pronouncements available to us upto March 2017 have also been included in this book. We feel that this work of ours will be very useful and rather undispensable to resolve various issues arising as a consequence of demonetisation. The subject matter is exhaustive enough aimed at meeting totality of requirements.

The feature of providing regular updates regarding significantly important Case Laws, Circulars, Notifications, etc., pertaining to the subject matter of this treatise, through URL mentioned on page (iii) of the Book, is an icing on the cake. This service is to be provided till December 2017 for the readers of the book and is approachable via a reader specific code provided on page (iii) in the opening pages.

We will consider ourselves lucky if this effort of ours takes away some of the pains and troubles of our readers. We have tried to make it an error-free and quality publication. We shall however be grateful for any valuable suggestions from our readers. One thing is sure, there has never been so compressive and methodical treatment of related issues ever before

Chapter No	Chapter name
SECTION: A	TAXATION OF INCOME FROM UNDISCLOSED SOURCES--POST DEMONETISATION [SECTIONS 68 TO 69D, 115BBE, 271AAB & 271AAC]
Chapter: 1	Income from Undisclosed Sources--Treatment Post Demonetisation
Chapter: 2	Deemed Income Under Sections 68 to 69D
Chapter: 3	Taxation of Incomes Referred to in Sections 68 to 69D
Chapter: 4	Penal Consequences Post Invocation of Sections 68 to 69D
Chapter: 5	Penalty on Undisclosed Incomes Found in Search Cases
Chapter: 6	Cash Receipt of Rs. 2,00,000 or More Attracts Penalty Under Section 271DA r/w Section 269ST
Chapter: 7	Scheme of Declaration in Pradhan Mantri Garib Kalyan Yojana
Chapter: 8	Post Demonetisation Cash Deposit Consequences
SECTION: B	CASH CREDITS [SECTION 68]
Chapter: 9	Chargeability Under Section 68
Chapter: 10	Nature, Scope and Mandate of Section 68
Chapter: 11	Books of Accounts in the Context of Section 68
Chapter: 12	Considerations Before Invoking Section 68
Chapter: 13	Enquiry by Assessing Officer Intending to Invoke Section 68
Chapter: 14	Onus to Prove--Where and When
Chapter: 15	Source of Source Not to be Proved
Chapter: 16	Shifting of Burden of Proof to Revenue
Chapter: 17	Dealing With Assessee’s Explanation
Chapter: 18	Credit Appearing in the Name of Third Party--Proof Regarding
Chapter: 19	Genuineness of Cash Credit--Related Issues
Chapter: 20	Justification of Addition Under Section 68
Chapter: 21	Addition on Account of Non Genuine Gift
Chapter: 22	Telescoping of Intangible Additions
Chapter: 23	Peak Credit Theory in Regard to Section 68
Chapter: 24	Cash Credit from Partnership Firm Perspective
Chapter: 25	Share Capital of Companies and Cash Credit
Chapter: 26	Share Capital of Closely Held Companies--Treatment as Cash Credit
Chapter: 27	Cash Deposits Under Varying Fact Situations Vis-a-Vis Addition Under Section 68
Chapter: 28	Cash Credit Perspective in Estimation of Business Income
Chapter: 29	Head of Income for Section 68 Addition
Chapter: 30	Relevance of Tribunal’s Finding Vis-a-Vis Cash Credit
Chapter: 31	Powers and Duties of Assessing Officer Vis-à-vis Invoking of Section 68
Chapter: 32	Section 68 Implications Vis-a-Vis Declaration Under Voluntary Disclosure Schemes
Chapter: 33	Questions Arising in Section 68 Fact Situations, Whether of Fact or of Law
Chapter: 34	Conveyancing Solutions in Cash Credits Specific Matters
SECTION: C	UNEXPLAINED INVESTMENTS [SECTION 69]
Chapter: 35	Scheme of Section 69
Chapter: 36	Burden of Proof Under Section 69 and Opportunity of Hearing
Chapter: 37	Justifiability or Otherwise of Addition Under Section 69
Chapter: 38	Addition Under Section 69 Vis-a-vis Construction Cost
Chapter: 39	Addition Under Section 69 Consequent to Search, Seizure and Survey Proceedings
Chapter: 40	Addition on Account of Unexplained Jewellery
Chapter: 41	Addition Consequent Upon Unaccounted Sales and Bogus Purchases
Chapter: 42	Invocation of Section 69 in Excess Stock Situation
Chapter: 43	Undisclosed or Unexplained Investment in Property
Chapter: 44	Allegedly Unexplained Deposit in Bank Account
Chapter: 45	Gift Vis-a-Vis Addition under Section 69
Chapter: 46	Unexplained Investments in Shares, Bonds, FD’s, Etc.
Chapter: 47	Miscellaneous Fact Situations Inviting Section 69
Chapter: 48	Questions Arising in Section 69 Fact Situations, Whether of Fact or Law
Chapter: 49	Conveyancing as to Section 69
SECTION: D	UNEXPLAINED MONEY, JEWELLERY, ETC. [SECTION 69A]
Chapter: 50	Scheme of Section 69A
Chapter: 51	Presumption as to Ownership
Chapter: 52	Opportunity of Hearing and Burden of Proof
Chapter: 53	Addition on Account of Jewellery Being Unexplained
Chapter: 54	Cases of Unexplained Cash
Chapter: 55	Justifiability or Otherwise of Addition under Section 69A
Chapter: 56	Conveyancing as to Section 69A
SECTION: E	AMOUNT OF INVESTMENTS, ETC., NOT FULLY DISCLOSED IN BOOKS OF ACCOUNTS [SECTION 69B]
Chapter: 57	Scheme of Section 69B
Chapter: 58	Addition Under Section 69B Where Not Sustainable
Chapter: 59	Additions Under Section 69B Where Sustainable
Chapter: 60	Conveyancing as to Section 69B
SECTION: F	UNEXPLAINED EXPENDITURE [SECTION 69C]
Chapter: 61	Unexplained Expenditure, Etc Related Issues
Chapter: 62	Conveyancing as to Section 69C
SECTION: G	AMOUNT BORROWED OR REPAID ON HUNDI [SECTION 69D]
Chapter: 63	Addition of Hundi Amount Under Section 69D
Chapter: 64	Convenyancing as to Section 69D

SECTION: A - TAXATION OF INCOME FROM UNDISCLOSED SOURCES--POST DEMONETISATION [SECTIONS 68 TO 69D, 115BBE, 271AAB & 271AAC]

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Income Taxation of Undisclosed Sources, 2017

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