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CMA Final · Direct Tax Laws and International Taxation · Survey, Search and Seizure

In a search under the Income-tax Act, 2025, Mr. Rao is found in control of a diary at the premises. Which of the following is NOT a presumption the law permits regarding such books or documents?

The law does not allow a presumption that tax has been paid on the transactions recorded. It permits presumptions that the documents belong to the person in control, contents are true, handwriting and execution are genuine, and electronic exchanges occurred between the stated parties.

  1. AThat the diary belongs to Mr. Rao and its contents are true
  2. BThat the handwriting and signatures appear to be of the persons they purport to be
  3. CThat tax has been fully paid on the transactions recorded in itCorrect
  4. DThat exchanges of electronic information purported between parties actually took place between them

Explanation

Section 247(7) permits presumptions of ownership, truth of contents, handwriting, due stamping and execution, and electronic exchange between parties. There is no presumption that tax has been paid on recorded transactions.

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