Certain unexplained cash credit, investment, expenditure, etc., are deemed as income !
Certain unexplained cash credit, investment, expenditure, etc., are deemed as income under section 68, 69, 69A, 69B, 69C and 69D of Income Tax Act 1961.
The amount of Income Tax calculated on the income referred to in sections 68, 69, 69A to 69D at the rate of 60 per cent (plus surcharge @ 25% on such tax and cess, as applicable). Thus effectively the rate comes to 77.25 per cent if such income is reflected in the return of income furnished under section139 of Income Tax Act 1961. This is as per section115BBE of Income Tax Act 1961
It may be noted that if such income is not reflected in the return of income furnished under section 139 of Income Tax Act 1961, then penalty of 10 per cent on tax payable under section 115BBE of Income Tax Act 1961shall be imposed under section 271AAC of Income Tax Act 1961. In such a case the burden including penalty will come to 83.25%.
Further, no deduction in respect of any expenditure or allowance shall be allowed to the assessee under any provision of the Income-tax Act 1961 in computing his income referred to in sections 68, 69, 69A to 69D of Income Tax Act 1961.
Extract of section 115BBE of Income Tax Act 1961
(1) Where the total income of an assessee,—
(a) includes any income referred to in section 68, section 69, section 69A, section 69B, section 69C or section 69D and reflected in the return of income furnished under section 139; or
(b) determined by the Assessing Officer includes any income referred to in section 68, section 69, section 69A, section 69B, section 69C or section 69D, if such income is not covered under clause (a),
the income-tax payable shall be the aggregate of—
(i) the amount of income-tax calculated on the income referred to in clause (a) and clause (b), at the rate of sixty per cent; and
(ii) the amount of income-tax with which the assessee would have been chargeable had his total income been reduced by the amount of income referred to in clause (i).]
(2) Notwithstanding anything contained in this Act, no deduction in respect of any expenditure or allowance [or set off of any loss] shall be allowed to the assessee under any provision of this Act in computing his income referred to in clause (a) [and clause (b)] of sub-section (1).
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