Section 45(5A) of the Income-tax Act, 1961 was introduced vide Finance Act, 2017. According to the Memorandum explaining the provisions of the Finance Bill, 2017, these provisions were introduced to minimize the hardship faced by Land Owners when they enter into a Joint Development Agreement with a Developer, so that the transfer of land to… (read more)

There are diverging views on the issue. The Hon’ble High Court of Karnataka in the case of Gouli Mahadevappa v. ITO [2013] 356 ITR 90 (Kan) (HC) held that where capital gain is assessed on notional basis under section 50C of the Act, whatever amount is invested in new residential house within prescribed period under… (read more)

If the expenditure is not claimed as deduction , there is no question of disallowance u/s 40A(3) or 40(3A) of the Act . In Smt. Sangeeta Verma v. CIT [2022] 284 Taxman 303 (All)(HC) held that, the affidavits filed by the assessee is clear recital that the purchasers insisted for cash payment. Their identity is… (read more)

As we understand, the Ld. Assessing Officer has already proceeded to assessment as the assessee has not objected to the “reasons recorded” for reassessment. It is advisable to comply with the Notices issued under section 142(1) of the Income-tax Act, 1961, to avoid any non-compliance. A detailed explanation with supporting documents may be furnished explaining… (read more)

Section 194Q(5) of the Income-tax Act, 1961 (Act) states that the provision shall not apply to a transaction on which tax is deductible under any of the provisions of this Act. The application of section 194H of the Act is on the Commission and not the whole transaction. Therefore, it cannot be said that the… (read more)

Section 80IAB(e) of the Income-tax Act, 1961 specifies that the eligible project should be the only project on the plot of land. Therefore, if 2 projects are on the same plot of land, the assessee will not be eligible for deduction. (read more)

Section 194LA of the Income-tax Act, 1961 pertains to deduction at source on payment of compensation on acquisition of certain immovable property. However, it is clarified that the same will not be applicable to agricultural land. Therefore, no TDS will be deducted on payments to the taxpayer. (read more)

Section 234A & section 234B of the Income-tax Act is applicable to the returned income as determined under section 143(1) of the Act. Therefore the decision of the Hon’ble Patna High Court – Full Bench in the case of Smt Tejkumari v CIT 114 Taxman 404 is still good in law. (read more)

It would be imperative to peruse through the Order of revision issued under section 263 of the Income-tax Act, 1961. If the Order has directed the Ld. Assessing Officer to make a de novo assessment, then the directions of the Additional commissioner of Income-tax would be valid in law. If there are instructions pertaining to… (read more)

It would be pertinent to understand that the nomenclature i.e., “Development Agreement” cannot be the reason for deciding disallowance. As section 54F of the Income-tax Act, 1961, is a beneficial provision granting an exemption, the same would be construed strictly and onus is on the tax-payer to establish its entitlement to exemption. But once the… (read more)