Voluntary disclosure relief applies when gold ornaments were not seized in an Income-tax search, blocking income inclusion

Gold ornaments recovered by the Central Excise Department from the assessee's premises were held eligible for relief under the Voluntary Disclosure of Income and Wealth Act, 1976 because the disqualification in section 3(2)(ii) applies only where seizure is made in a search under section 132 of the Income-tax Act, 1961. As that factual condition was absent, the value of the ornaments could not be included in the assessee's income, and the appellate view allowing the claim was sustained.

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Issues: Whether the value of gold ornaments seized by the Central Excise Department could be included in the assessee's income, and whether the exclusion under section 3(2)(ii) of the Voluntary Disclosure of Income and Wealth Act, 1976 was unavailable because the seizure was not under section 132 of the Income-tax Act, 1961.

Analysis: The ornaments had been recovered in a raid conducted by the Central Excise Department from the assessee's premises and were not seized by the Income-tax Department in a search under section 132 of the Income-tax Act, 1961. The appellate authority had allowed the assessee's claim on the basis of section 3(1) of the Voluntary Disclosure of Income and Wealth Act, 1976 and had held that the exception in section 3(2)(ii) did not apply. The Tribunal found no infirmity in that view, since the factual basis required to deny the benefit of the provision was absent.

Conclusion: The inclusion of the gold ornaments' value was not justified, and the assessee was entitled to the benefit of the Voluntary Disclosure of Income and Wealth Act, 1976. The revenue's appeal failed.

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