Photo of Lakshya Gupta

Associate in the Tax Practice at the Noida office of Cyril Amarchand Mangaldas. Lakshya can be reached at lakshya.gupta@cyrilshroff.com

IT Act

Background

The Income Tax Act, 1961 (“IT Act”) confers various powers on the Income Tax Department (“ITD”) to curb the menace of laundering of unaccounted money. One such power-bestowing provision is Section 68 of the IT Act, which is often resorted to by the ITD when large amounts of unaccounted funds are invested in companies at a significant premium. This provision puts the onus on the taxpayer, i.e., the investee company, to satisfactorily explain the source of those funds and produce details to evidence the identity, genuineness and creditworthiness of the shareholders as well as the source of the shareholders’ fund.Continue Reading Is regulatory compliance sufficient to discharge onus u/s 68 of the IT Act?