Under the erstwhile Section 271(1)(c), it was held in CIT v. Suresh Chandra Mittal [2001] 251 ITR 9 (SC) that penalty for concealment cannot be levied if the taxpayer has disclosed income in a return filed under Section 148. The same principle applies u/s 270A if there is no "under-reporting" or "misreporting" in the return.… (read more)

The builder's offer of a uniform 100 sq. yard flat to all, regardless of original flat sizes (40, 55, or 72 sq. yards), appears to be unfair for owners of larger flats. If the society is forcing an unfair deal or bypassing your rights, you are entitled to file a complaint with the Registrar. The… (read more)

To the best of my knowledge, the Income Tax Department is not specifically targeting cash gift transactions between relatives exceeding a certain amount for AY 2025-26 or AY 2026-27. Such gifts are tax-exempt under Section 56(2)(x). However, notices could still be issued if: (i) Cash transactions exceed ₹2 lakh and violate Section 269ST (though relatives… (read more)

As regards the land, the landlord is liable for capital gains tax on the sale of the land. As regards the building, the tenant incurred the cost. However, whether he retains ownership of the building depends on the terms of the lease. If the tenant has ownership of the building, he will be assessed to… (read more)

As regards the precautions in the hands of the donor for Section 68, presumably, he will have filed a return in the earlier years showing the shares as an asset in the Balance Sheet. Generally, he will have to maintain proof of source of the purchase in 2000. There is no limit on amount or… (read more)

Scrutiny is not mandatory under any specific provision for FY 2024-25 based solely on ₹20 lakhs fees and ITR filing. It becomes applicable only if the Income Tax Department selects the case for scrutiny based on risk parameters or random selection. Fees dropped from ₹25 lakhs (FY 2023-24) to ₹20 lakhs (FY 2024-25). A significant… (read more)

If the physical cash balance exceeds the amount recorded in the books (here, a difference of Rs. 8 lakhs), it is considered "unexplained cash." Tax authorities may treat this as unreported income unless it can be justified with proper documentation. If the difference is due to a legitimate source (e.g., personal funds, a loan, or… (read more)

If the agricultural land is rural, no capital gains tax applies to any of the transactions, as rural agricultural land is not a capital asset under Section 2(14). The profit of ₹3 lakhs from the sale on 10/12/2024 is exempt. If the agricultural land is urban, capital gains tax applies to the sale on 10/12/2024.… (read more)

Courts have held that for assets that were not capital assets at the time of acquisition (e.g., rural agricultural land), the period of holding for capital gains purposes begins from the date they become capital assets (e.g., upon conversion). Examples include CIT v. Rama Rani Kalia (2013) 358 ITR 499 and CBDT Circular No. 4/2007.… (read more)

If a trust is not registered under Section 12A at the time of receiving donations, its income (including donations) is not exempt under Sections 11 and 12. Such income could be taxed as income from other sources under Section 56. Though the trust spent ₹7,13,960 (98.5% of ₹7,24,600) on charitable purposes, leaving ₹10,640 unspent, the… (read more)