Section 69A of ITA, 1961 : Section 69A: Unexplained Money, Etc

Explanation using Example

Imagine a scenario where Mr. Sharma, a businessman, is undergoing an income tax assessment for the financial year 2022-2023. During the assessment, the Assessing Officer discovers that Mr. Sharma owns a luxury watch and 500 grams of gold which are not recorded in his business's official accounts. When asked to explain, Mr. Sharma fails to provide a satisfactory explanation regarding the source of funds used to acquire these items. Under Section 69A of The Income-tax Act, 1961, the Assessing Officer is then entitled to treat the value of the luxury watch and the gold as income of Mr. Sharma for the year 2022-2023, potentially increasing his tax liability for that year.