Unexplained assets treated as income: special tax and surcharge apply and penalty may be imposed for nondisclosure.

Unexplained money, bullion, jewellery or valuables not recorded in books and unexplained by the assessee may be deemed income for the year; such deemed income is taxed under a special provision requiring tax on that income plus tax on the rest of total income, with no deductions or set offs allowed, and a surcharge applies. Designated officers may impose an additional penalty based on tax payable on the deemed income, but no penalty is levied if the income is disclosed in return and the special tax paid within the relevant year; imposition of that penalty precludes a separate general penalty on the same income.

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