Law:

Section:

Section 69, read with section 147, of the Income-tax Act, 1961 - Unexplained investments - Assessment year 1998-99 - Whether a declaration filed under Voluntary Disclosure of Income Scheme, 1997, which is not valid for purposes of Scheme, can constitute material for reassessment under section 148 and if it is found that in accordance with such declaration, assessee had jewellery or valuables, same can be deemed to be income for financial year in which valuables are found with assessee, unless assessee offers acceptable explanation about nature and source of acquisition thereof to rebut statutory presumption - Held, yes FACTS The assessee had made a declaration under Voluntary Disclosure of Income Scheme on 31-12-1997 declaring that he had assets in the form of gold and diamond jewellery acquired in the assessment years 1986-87 and 1987-88. However, tax having not been paid as per the declaration by virtue of section 67(1) of the Scheme, the declaration was treated to have never been made. Since the assessee was found to be owner of the unexplained investment in jewellery, the Assessing Officer invoked section 69A raising statutory rebuttable presumption in favour of unexplained investment to be in the year in which it was found. He initiated proceedings under section 147/148 for the assessment year 1998-99 and made an addition equal to the value of unexplained assets. On appeal, the Commissioner upheld the addition. On second appeal, the Tribunal set aside the initiation of reassessment proceedings holding that since as per declaration undisclosed income was of the financial years 1985-86 and 1986-87 and the Assessing Officer had no other material, the said declaration could not be the basis for reassessment for the assessment year 1998-99. On revenue's appeal: HELD A perusal of the provisions of the Voluntary Disclosure of Income Scheme, 1997 leads to following conclusions :- (i)If a declaration has been validly made by paying the requisite tax, the amount of income disclosed cannot be included in income of the declarant for any other assessment year and nothing contained in the declaration is admissible in evidence in any proceedings for penalty or…

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