Article
Is Section 132(4A) a free getaway pass for the assessees? – An analysis of Allahabad High Court ruling in Ajay Gupta v. CIT
By Janane G
Section 132(4A) of the Income Tax Act, 1961 empowers an Assessing Officer to presume that anything that is found in searched premises belongs to the occupant of such premises. However, this power to presume is not absolute in the hands of the Assessing Officer, in that the presumption is rebuttable. The article in this issue of Direct Tax Amicus hence attempts to elucidate the scope and extent of the presumption contained in Section 132(4A) in light of a recent judgement of Allahabad High Court in the case Ajay Gupta v. Commissioner of Income Tax. Elaborately analysing the judgement, the author states that if the view taken by the Court is to be accepted, then mere denial of knowledge of the documents found during the search, without any reasonable explanation to deny the same, would be sufficient to obtain a free pass from the addition being made, unless proven to the contrary by the department. However, according to the author, if this is the case, the purpose of inserting sub-section 4A into the Act will fail since the onus to prove that the document belongs to the person searched would again fall on the department as it existed prior to the amendment...
Circular
- Direct Tax Vivad se Vishwas Act, 2020 – Clarifications
- Reporting requirement under clauses 30C and 44 of Tax Audit Report in Form 3CD deferred till 31-03-2021
- Residency under Section 6 of Income Tax Act, for 2019-20, clarified
Ratio decidendi
- Payments to Foreign Cricket Boards, linked with matches in India, liable to TDS under Section 194E – Obligation not affected by DTAA – Supreme Court
- No addition to be made under Section 68 in hands of firm once source of contribution made by partner established – Allahabad High Court
- Taxability of loan given by an entity to its sister concern – Section 2(22)(e) when not invokable – Reassessment when not correct – Gujarat High Court
- Section 40(a)(ia) is attracted only if expenses are claimed in profit and loss account – ITAT New Delhi
- Guideline value of property – First proviso to Section 50C is retrospectively applicable – ITAT Chennai
