Case Law (SC) -- Fiscal laws including taxation statutes, are to be strictly interpreted and tax must not be imposed through analogy, inference or by extension of phrases used by the legislature. The phrase ‘valuable article’ would simply mean an item ‘worth a great deal of money’. It should be in the same category as the other high priced articles like bullion, gold, jewellery and cannot mean ‘any article of value’. Bitumen is not a valuable article for the purpose of section 69A.

"Following the aforesaid discussion, it must be said that for purposes of interpreting Section 69A of the Income Tax, Act 1961- the ordinary and literal meaning should be opted as the words in the statute are clear and unambiguous. The provision does not need any addition or subtraction and stands on its own legs. The phrase ‘valuable article’ would simply mean an item ‘worth a great deal of money’. It cannot mean, as is said in the impugned order, to include ‘any article of value’. Therefore, in the context of Section 69A, unexplained valuable article has to be high priced item which are procured to hide income, to avoid tax liability. To adopt a wide interpretation for the phrase- ‘valuable article’ and thereby include within its scope any sundry article of whatever value, is found to be unjustified. It needs to be also reiterated that, ordinarily, fiscal laws including taxation statutes, are to be strictly interpreted and tax must not be imposed through analogy, inference or by extension of phrases used by the legislature. 

16. For purpose of Section 69A of Income Tax Act, it is therefore declared that- an ‘article’ shall be considered ‘valuable’ if the concerned article is a high-priced article commanding a premium price. As a corollary, an ordinary ‘article’ cannot be bracketed in the same category as the other highpriced articles like bullion, gold, jewellery mentioned in Section 69A by attributing high value to the run-of-the-mill article, only on the strength of its bulk quantity. To put it in another way, it is not the ownership of huge volume of some low cost ordinary article but the precious gold and the like, that would attract the implication of deemed income under Section 69A. 

17. Earlier, it is the high value, less bulky items which were owned discreetly, that aided the assessee in avoiding tax. The 1964 Amendment was primarily enacted to address mischief of this nature. The wisdom of the legislature as reflected in the Amendment – was to subject to income tax, articles like gold, jewellery and other valuable items- typically owned with the intention of avoiding income tax-by translating income into buying and then hiding such precious high value items. Premium price cannot be attributed to an otherwise ordinary and common place article like bitumen only on the basis of huge mass of bitumen. It would be an incorrect way to categorize bitumen as a ‘valuable article’, under Section 69A of the Income Tax, Act. 

D. N. SINGH THROUGH PARTNER DUDHESHWAR NATH SINGH v. CIT C.A. No.-003738-39/2023 dated 16.05.2023