Tax treatment to National Defence Bonds 1980. - Income Tax - 1467/CBDT

INSTRUCTION NO. 1467/CBDT Dated: March 31, 1982 During the course of a search documents and books of accounts which indicated purchase of National Defence Bonds 1980 of the value of about Rs.12.5 lakhs were seized. The board has examined the question as to whether any enquiry regarding the source of purchase of the gold bonds is permissible. 2. Sec.8 of the taxation Laws Act 1965 states that where a person who has acquired any gold out of his income which has not been disclosed by him for the purpose of Indian Income-tax Act, 1922 or I.T. Act, 1961 tenders such gold as subscription for the National Defence Gold Bonds 1980 prior to the detection of such income by the ITO or the seizure of such gold under any law for the time being in force such income shall notwithstanding anything contained in the said Acts, not be included in his income, profits or gains chargeable to the tax under the said acts in an assessment or re-assessment for any assessment year made under the said Acts on or after 20-10-65. The exemption u/s.8 applies only to undisclosed income which is utilised for acquiring the gold tendered as subscription for the national Defence Gold bonds 1980. The exemption does not however apply to undisclosed income utilised for acquiring the bonds themselves from another person. 3. You are requested to bring these instruction to the notice of the officers working in your charge.