Page 108 - DTPA Journal December 21
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w.e.f. asst. year 2020-21 is quite high “Instances have come to the notice of the
and has impacted significantly cash flow Board where assessees have claimed
of companies who otherwise have low that they have been forced to confess
taxable income or have incurred tax undisclosed income during the course of
losses. With the phasing out of the search and seizure and survey
exemptions and deductions available operation. Such confession, if not based
under the Act, the burden of MAT should on credible evidence, are retracted by
also be reduced to 12 per cent(in place of the concerned assessees while filing
current level) so that it may r e t u r n o f i n c o m e . I n t h e s e
commensurate with the phasing out of circumstances, confession during the
tax exemptions and incentives. search and seizure and survey operation
c) Presently, the amount of loss brought do not serve any useful purpose. It is,
forward or unabsorbed depreciation therefore, advised that there should be
whichever is less as per books of account focus and concentration on collection of
is allowed as a deduction while evidence of income which leads to
computing book profit for the purpose of information on what has not been
MAT please refer Expl 1 part 2 item (iii) disclosed or is not likely to be disclosed
to 115JB. The said provision adversely before the Income-tax department.
affects companies which have huge Similarly, while recording statement
book losses and lesser unabsorbed during the course of search and seizure
depreciation as they will have to pay operation, no attempt should be made to
MAT despite having ample amount of obtain confession as to the undisclosed
book losses thereby affecting their cash income.”
flows. It is suggested to review the In practice the above Instruction is
provision to make it liberal. Both generally ignored by the officials of
depreciation and brought forward losses department going for Search or Survey.
should be fully allowed even for the In fact it is not practicable for the taxpayer
purpose of MAT. The methodology for to ascertain during search itself that how
computing loss brought forward and much income he should declare in
unabsorbed depreciation as per books of absence of necessary details and due to
account may be specifically provided in the necessity to consult his business
section 115JB of the Act. associates, family members and staff.
15A. Disclosure during Income Tax Search/ With a view to streamline the process of
Survey : The CBDT had issued following search and survey and with a view to do
Instruction dated March 23, 2003: justice we make the following
In the light of the statements recorded suggestions :
followed by retractions on the ground of a) The copy of statement recorded during
coercion and threat in the course of Search should be given to taxpayer with
search and survey operations, the Board copy of Panchnama itself. In case of
issued the Instructions F.No. 286/2/2003 survey also the copy of statement
– IT (Inv.) dated March 23, 2003 stating as recorded should be instantly provided
follows: during Survey.
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