Law: Income Tax Act, 1961

Section: 131,131(1)(d)

Income tax---- Voluntary disclosure of income---Income-tax inquiry---Effect of voluntary disclosure of income---Voluntary disclosure does not preclude enquiry by department---Finding that amount disclosed as amount spent on construction of house property was not correct---Issue of commission under S.131(1)(d) to Valuation Officer was valid---If amount spent on construction was more than the amount disclosed by assessee, Department entitled to take suitable action---Voluntary Disclosure of Income Scheme, 1997--Indian Finance Act, 1997, .S.64---Indian Income Tax Act, 1961, S.131. Section 64 of the Finance Act,1997, simply provides that a person would be entitled to make voluntary disclosure of the income under the Scheme. The effect is that the authorities are not entitled to make any investigation into the source from where he has earned the income, but section 64 does nowhere provide that the declaration relating to the explained income would also be taken to be correct. If a true declaration pertaining to the investment is made then that would be the end of the matter but if it comes to the knowledge of the Department that a higher amount was invested than the amount disclosed, then the Department certainly would be entitled to take suitable proceedings under the Act. The assessee started construction of a property in the financial year 1993-94 and completed it by 1995-96. According to the petitioner, she had invested an amount of Rs:10,89,000 in construction of the aforesaid house/property. Out of this amount, she could explain the expenditure of Rs.5,42,544 but the balance amount of Rs. 5,46,756 could not be explained by her and, therefore, she made a disclosure under the .Voluntary Disclosure of Income Scheme, 1997. She made the declaration on December 30, 1997. According to the Income-tax Department an Inspector inspected the property on February 28, 1998, and submitted his report estimating the cost of construction at Rs.17 lakhs. As there was a substantial difference between the investment 'estimated by the Department and that of the registered valuer, summons under section 131(1)(d) of the. Income Tax Act, 1961, was issued to the Valuation Officer of…

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