19 December 2013
Res Sir If source of income is not explained or explained without documentary support or with unsatisfactory or incomplete documentary proof what course of action/assessment will the A.O. may take. Say if there is cash deposit of Rs 8-9 lakh in assesse's a/c without satisfactory source of income what could possibly happen.
19 December 2013
in case of unstaisfactiory or no explaination is provided then for items of income and exp AO can invoke sec 68,69,69A,69B,69C etc as applicable.
then such income can charged to maximum marginal rate @30 % 3% cess and no deduction will be allowed under any situation.
19 December 2013
depends on whether you initially offered the said income for tax or not. once you offer the said income to tax, section 68 and 69.. in case you have not offered to tax, what Tushar has said will operate.
cannot be invoked. What can be invoked is section 271A for lack of proper maintenance of records.
Even in that case you can seek waiver of penalty under 273A
19 December 2013
yes but only if not offered to tax already. If you read the sections you will find that they operate only where the income/deposit has not already been offered to tax. For eg Section 69A says "Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income......may be deemed to be the income31 of the assessee for such financial year."
How would you deem it to be income when it has already offered to tax. That is why I said that if it has not been offered to tax, section 68 and 89 shall operate. Otherwise it would amount to double counting!!
19 December 2013
the quesrist have used the words "unsatisfactory explanation" which means unexplained sources that is sufficent to invoke sec 68,69 etc pls read it again .
19 December 2013
no. unsatisfactory satisfaction doesnt necessarily means section 68 and 69. 68 and 69 means unexplained deposit/expense which was in or outside the books but no offered to tax.
Once it has been offered to tax but no explanation is offered with respect to source of the income (which often happens in case of illegal income) Section 271 and 271A comes into picture.
19 December 2013
bhai, ok tell me onething, where did either the amended section or the memorandum talks about explanation for credits already offered as income.
the amendment and memorandum is in reference to credits shown as share application money, share capital, security premium or credits of similar nature (capital nature to generalize).
You are confusing between
1. disclosed credits offered to tax but source not declared,
2. disclosed credits but shown as capital items but source not declared; and
3 undisclosed credits/debits with undisclosed source.
The amendment is in regards to point 2. point 3 is for section 68 and 69 (other than those covered in point 2). I am talking about point 1.
You find one case where section 68 or 69 was invoked where the income was already offered to tax but sources were not declared!!
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