Search Results For: search and seizure


QUERY: In search cases, penalty is leviable at 10% of the undisclosed income u/s. 271AAB of the Act in certain cases, if the conditions mentioned therein are met. One of such conditions is that in the course of the search in which such income is disclosed, the assessee specifies the manner in which such income is derived and also substantiates the manner in which such income is derived. In case of cash transactions, sometimes there is no evidence to substantiate the manner of earning. Also in some cases, it may be difficult to so prove. For example, case of bogus expenses, etc. How such condition is to be fulfilled?
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EXPERT:
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Exception 2 to Explanation 5 to section 271(1) also provides similar condition, while interpreting the said Explanation the Gujarat High Court in CIT v. Mahendra C. Shah [299 ITR 305] has held as under:

“In so far as the alleged failure on the part of the assessee to specify in the statement under section 132(4) of the Act regarding the manner in which such income has been derived,

QUERY: Can the assessee get his stock in hand under seizure (lying with himself but under the seizure order) released in view of insertion of proviso to section 132(1)(B)(iii) w.e.f. June 1, 2003, though the search in his case was one before its insertion? The intent of this amendment proves that stock-in-trade should not be kept under seizure.
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EXPERT:
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Firstly, it is not clear from the query, whether stock seized before June 01,2003 relates to a business. In case there are any items found from the possession of the assessee for which the assessee is not doing any business activity,