Surveys for Checking Ostentatious Expenditure

This type of survey is undertaken for the specific purpose of making enquiries about ostentatious expenditure on occasions such as marriages, festivals, social gatherings, inaugurations, and events like launching of a new product, service, etc.

 

Occasions like marriages provide an excellent opportunity to display wealth and enhance social status. Such functions are getting increasingly opulent. The ceremonies and functions go on for a number of days. These are often held in five star hotels, farm houses, banquet halls, etc. Guests are invited from far and wide, and are made to stay in five star hotels, guest houses, etc. The choicest of food is served at the marriage functions. Exotic fruits are imported from other countries.

Use of helicopters and elephants is also sometimes resorted to. Using elaborate props for the reception of the bride and the bridegroom is the order of the day. The expenditure on clothes and jewellery is anybody’s guess. Expensive gifts are also showered on the guests. The honeymoon is often to a foreign destination. In such a social set up where the rich and powerful are vying with each other to splurge, black money finds an easy outlet. This is the time for the tax- man to come to the scene to quantify the expenditure and enquire about its source. There is a provision that stipulates a survey to be carried out in such a situation. There is a safeguard in the provision for ensuring that the social sanctity of the occasion is not compromised. The income tax authorities are, therefore, permitted to make open enquiries about the expenditure incurred only after the function is over.


The functions, ceremonies and events which are generally covered by this type of survey are marriages, inaugural functions of businesses, new year eve parties, film premiers, functions for launching of new products, parties for celebrating festivals, etc. In this type of survey, income tax authorities are empowered to record statements of the persons concerned or other persons with regard to the expenditure incurred. For example, if it is a marriage function, the statements of the parents of the bride and the bridegroom may be recorded. Information may simultaneously be collected from the concerned hotels, party plots, banquet halls, guest houses, pandal wallas, caterers, decorators, photographers, sweet shops, musical parties, DJs, invitation card printers, jewellers, boutiques, etc. The information collected may be matched with what is stated by the bride and bridegroom’s family to arrive at a fair estimate of the quantum of expenditure. The source of funds for expenditure may also be enquired into. Lists of cash gifts may also be obtained so that the amount of cash gifts actually received comes on record.


The results of the survey are later utilized in framing assessments of the concerned persons. This type of survey helps in collecting contemporaneous evidence of expenditure incurred and in ensuring that tax is duly paid on the income relating to the expenditure. Such surveys are also expected to have a salutary effect on curbing wasteful expenditure.
Sec. 143(3) : Scrutiny Assessments by Income Tax Department
“Penalties” Under Income Tax Act. 1956
How is a Search Operation Conducted by Income Tax Department ?
Surveys for Checking Ostentatious Expenditure
Surveys for Enforcing Compliance with Provisions of TDS
“Summon” U/s 131 of Income Tax Act.
Investigation by Income Tax Department:
Appellate Authorities of Income Tax Department
Power to Call for Information U/s Sec. 133(6) of Income Tax Act.
Specific Surveys U/s 133A(1) of Income Tax Act.
Types Of Income Subject To TDS [Deduction Of Tax At Source]
Pre-Requisite For Claiming Income Tax Refund
Benefits of Filing Income Tax Returnsn
Section-139(9): Defective Tax Return
 
 
How is a Search Operation Conducted by Income Tax Department ?
The provisions relating to search and seizure are contained in section 132 of the Income Tax Act, 1961.
 
Sec. 143(3) : Scrutiny Assessments by Income Tax Department
Scrutiny assessment refers to the examination of a return of income by giving an opportunity to the assessee to substantiate the income declared and the expenses, deductions, losses, exemptions, etc. claimed in the return with the help of evidence..
 
“Penalties” Under Income Tax Act. 1956
Penalties by way of monetary payments are charged under the Income Tax Act for various defaults relating to payment of taxes, maintenance of accounts, for noncompliance and non co-operation during proceedings, for evasion of tax, etc..
 
Income of Individuals And HUFs – As a Tax Payers Under Income Tax Act, 1961.
The individual tax payers and also the HUFs while proceeding to calculate the net taxable income in the first phase are required to arrive at the gross total income under different heads of income...
 
Types Of Income Subject To TDS [Deduction Of Tax At Source]
The following types of incomes are mainly subject to deduction of tax at source: (a) Salaries Section 192. (b) Interest on securities Section 193..
 
Pre-Requisite For Claiming Income Tax Refund
For claiming income tax refund the first prerequisite is that there should have been excess tax paid or deducted at source on the basis of return of income.
 
Section-139(1) : Provision for Voluntary Income Tax Return
Every person,— (a) being a company or a firm; (whether having income or loss) or (b) being a person other than a company or a firm if his total income or the total ncome of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax, shall file a return of his income in the prescribed form.
 
Benefits of Filing Income Tax Returnsn
We have heard many a times that every individual whose total income exceeds the maximum exemption limit is obligated to furnish his/her Income Tax Return or ITR.
 
Section-139(9): Defective Tax Return
Where the Assessing Officer considers that the return of income furnished by the assessee is defective, he may intimate the defect to the assessee and give him an opportunity to rectify the defect within a period of 15 days from the date of intimation.
 
Section 139(5) : Revised Income Tax Return
If any person, having furnished a return u/s 139(1), or in pursuance of a notice issued under section 142(1), discovers any omission or any wrong statement therein, he may furnish a revised return at any time.
 
Section-139(4A) : Income Tax Return of Charitable and Religious Trusts
Every person in receipt of income derived from property held under trust or other legal obligation wholly or partly for charitable or religious purposes or of income being voluntary contributions referred to in section 2(24)(iia) shall.
 
Section-139(4) : Belated Income Tax Return
If an assessee has not furnished a return of his income within the time allowed to him under section 139(1) or within the time allowed under a notice issued under section 142(1).
 
 
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