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CMA Final · Direct Tax Laws and International Taxation · Black Money Act, 2015

Ravi has undisclosed foreign assets held for his benefit by a nominee abroad. Which statement is correct under section 14 of the Black Money Act?

Under section 14, the Chapter does not bar direct assessment of the person on whose behalf or for whose benefit the undisclosed foreign asset is held, nor recovery of tax and other sums from that person. Ravi can therefore be assessed and pursued directly.

  1. AOnly the nominee holding the asset can be assessed, because the asset is held in the nominee's name
  2. BNothing in the relevant Chapter prevents direct assessment of Ravi, on whose behalf or benefit the asset is held, or recovery of tax from himCorrect
  3. CDirect assessment of Ravi is barred once the nominee has been assessed
  4. DRecovery from Ravi is allowed but his direct assessment is barred

Explanation

Section 14 states that nothing in the Chapter prevents direct assessment of the person on whose behalf or for whose benefit the asset is held, or recovery from that person of tax or other sums payable. So Ravi can be assessed directly and tax recovered from him. Barring assessment, as in the other options, finds no support in the provision.

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